RATING

RECOMMENDATION

Sell

  • ROFR Required
  • Available in Depository:

  • NSDL

  • CDSL

  • Available for Investment:

  • Primary

  • Secondary

RATING

RECOMMENDATION

Sell

Business Type

Traditional Business

RATING

RECOMMENDATION

Sell

Business Type

Traditional Business

ISIN

INE493B01017

Face Value

₹10.00

Total Share

79,16,167

Total Income

₹3,035.26 L

Profit After Tax

-₹245.68 L

EPS

-₹3.10

P/E

-9.61

P/B

1.11

Market Capitalisation

₹23.59 Cr

Enterprise Value

₹50.21 Cr

Book Value

₹26.79

Earnings Yield

-10.40 %

Sector

Industrials

Sub-sector

Auto Ancillaries

Category

Listed

Cashflow - Operations

₹272.73 L

Cashflow - Financing

-₹74.55 L

GG Automotive Growth

Compounded Sales Growth

  • -46.41%

    1 Year

  • 6.89%

    5 Year

  • -0.01%

    8 Year

Pro Only

Compounded Profit Growth

  • NA

    1 Year

  • NA

    8 Year

Pro Only

Return On Equity

  • -11.59%

    2021

  • 16.45%

    2018

  • 4.68%

    2014

Pro Only

About GG Automotive

  • G.G. Automotive Gears Ltd. is a leading manufacturer of traction gears and pinions, based out of Dewas, Madhya Pradesh in India. The company is primarily involved in manufacturing of traction gears and pinions for zonal and metro railways in India. It offers railway gears and shafts, forged components and machined blanks, industrial gears and gearboxes, and mining and earth-moving equipment spares. 
  • G.G. Automotive Gears Ltd. is a self-sufficient organisation capable of developing and manufacturing locomotive and industrial application gears & pinions, gearboxes, and forged automotive components.
  • The company has the capability of manufacturing helical and spur gears ranging from 50 mm die to 1600 dia up to 30 module, hardened and ground to DIN class 3/4 accuracies.
  • G.G Automotive Gears Ltd. expertise in the field of gear manufacturing has led them to diversify into the manufacturing of forgings through this integrated and newly installed unit. Backed by a near total product service capability, the company offers an ‘end-to-end’ solution right from product conceptualisation to testing.
  • G.G. Automotive Gears Ltd. was established in 1974, the company undertakes to manufacture of traction gears as a strategic shift from its traditional business of automotive gears.
  • Mr. Kennedy Gajra is the chairman and managing director of the company. 

  • GG Automotive IPO Details

Currently, the company's stocks are traded on Bombay Stock Exchange (BSE)

  • GG Automotive Subsidiaries

The company has no joint venture/subsidiaries or any associate company. 

  • GG Automotive Revenue Segmentation

  • Job Work
  • Other Income
  • Sales of manufacturing of traction gears and pinions
  • GG Automotive Product & Services

The company has following products in their portfolio - 

  • Spur
  • Helical
  • Double Helical/Herringbone
  • Internal rings
  • Bevel/Spiral bevel
  • Spur/Helical shafts
  • Reduction gear boxes
  • Forged components/blank
  • Worm gears
  • GG Automotive Assets

The company's assets as on 31st, March 2021.

ParticularsAmount in Rs. Lakhs
Leasehold land0.05

Building

130.94
Plant and machinery2893.25
Computers 5.49
Office equipments8.00
Vehicles 104.97
Furniture and fixtures4.93
Software0.96
  • GG Automotive Industry Overview

Industry Statistics

  • Traction gears/pinions constitute vital part of the power transmission system of locomotives and call for sophisticated techniques in manufacture with special material, equipment. GG Automative Gears generates most of its revenue from traction gears. Increased investment in the railway sector and a range of supportive government subsidies and regulations are factors driving the growth of the electric traction motor market size. Furthermore, increasing focus on high-speed rail, followed by the expanding metro rail networks across cities, are expected to increase the electric traction motor market size. 
  • The automotive gears market has been categorized into spur, helical, rack and pinion, and worm gear types. The market demand for spur gears is anticipated to grow at a significant rate in the coming years, as spur gears are easy to manufacture and can be used for a range of applications in the automotive industry.
  • The rapidly growing electric vehicle industry is expected to hinder the growth of the automotive gears market to some extent in the coming years. At present, the penetration of electric vehicles is low, constituting only a fraction of the total vehicle sales. But with governments across the world supporting zero-emission vehicles through financial incentives and favourable policies, the market growth is likely to get restrained. 
  • In 2020, India was the sixth-largest automobile producer worldwide, after China, the US, Japan, Germany, and South Korea. The auto components industry is expected to become the third largest in the world by 2025

Future Prospects

  • India is emerging as a global hub for auto component sourcing. 
  • India has a competitive advantage in auto components categories such as shafts, bearings, and fasteners due to large number of players.
  • Both domestic and export markets are almost similar in terms of potential share by different product types. Engine and Exhaust components along with body & structural parts are expected to make up nearly 50% of the potential domestic sales as well as export in 2020.
  • Transmission, steering parts. electronics and electrical equipment are likely to be the other key products.
  • The Indian auto components industry is expected to grow to US$ 200 billion by FY26. This growth will be backed by strong export demand which is expected to rise at an annual rate of 23.9% to reach US$ 80 billion by 2026.
  • By 2025, 4 million of EVs could be sold each year and 10 million by 2030, which will restraint the market for growing at a desired pace
  • Auto component exports are expected to grow at 23.9% annually to reach US$ 80 billion by 2026.

Government Initiatives

  • Government policies like Make in India, Automotive Mission Plan, and National Automotive Testing and R&D Infrastructure Project (NATRIP) have also had a positive impact on the market.
  • In November 2020, the Union Cabinet approved PLI scheme in automobile and auto components with an approved financial outlay over a five-year period of Rs. 57,042 crore (US$ 8.1 billion). In September 2021, the Indian government issued notification regarding a PLI scheme for automobile and auto components worth Rs. 25,938 crore (US$ 3.49 billion). This scheme is expected to bring investments of >Rs. 42,500 (US$ 5.74 billion) by 2026.
  • In March 2021, the government announced to offer fresh incentives to companies making electric vehicles (EVs) as part of a broad auto sector scheme. The scheme is expected to attract US$ 14 billion of investment in the next five years.
  • Government has come out with Automotive Mission Plan (AMP) 2016-26 which will help the automotive industry to grow and will benefit Indian economy in the following ways: - Contribution of auto industry in the country’s GDP will rise to over 12%. Around 65 million incremental number of direct and indirect jobs will be created. End of life policy will be implemented for old vehicles.

GG Automotive Awards & Achievements

GG Automotive Gears has bagged the ‘Most Promising SME’ award at the Rail Analysis’ Rail & Metro Awards held in New Delhi in 2020.

GG Automotive Strengths

  • The company has been constantly growing over its technological adaptation, which can be reflected over improved models in their gears and products, with increasing production capacity over the span of the company. The company has upgraded its Enterprise Resource Planning (ERP) software, keeping in line with this goal
  • The company is always looking for new ways to reduce cycle times and costs per component by investing in better technology, whether it's machines, consumables like tooling, or even human resources. 
  • The company is a leading manufacturer of traction gears and pinions. Along with that, the company has diversified products to cater to several other industries.
  • Additionally, GGAG’s foray into diversified markets such as earth moving equipment, mining, steel and industrial applications which provides insulation from negative business cycle effects as a result of the pandemic

GG Automotive Shortcomings

  • The company was not able to manage its resources during the time of COVID-19. When we look at revenue per unit of expense in FY21, we see that it was significantly lower than the previous year's averages.
  • In FY21, the company did not adapt to any foreign technology to increase efficiencies and economies of scale, nor did it spend any money on research and development, which is crucial in a modern industry like this.
  • The company is debt ridden and the total debt of the company has increased by 16% in FY21 and over the last 5 years, the debt of the company has increased by 33% year-on-year (y-o-y).

GG Automotive Opportunities

    • The company strong brand value and market presence in the Indian Railways, along with lucrative opportunities opening in the global railway market is expected to be fruitful for the business in coming years.
    • The company aims to maintain dominant presence in the Indian Railways and explore newer markets globally with key areas being East Asia & the America.
    • Participation in online and offline expos and exhibitions, might increase customer reach.
    • The company has numerous projects undertaken under the R&D wing of the company that should reach fruition soon and complement their pursuit of growth.
    • To satisfy the increased demand and add a new product line to the product range, the company has invested Rs. 11 crore in a project. The project is expected to be finished in March of 2022.
    • Anticipation of a growing consumer class enhanced ease of doing business, expanding infrastructure—such favourable factors could propel the Indian automobile industry forward. Adjacent industries like aerospace, defence and agricultural machinery are evolving into a promising new market for Indian auto component manufacturers.

    GG Automotive Threats

    • The automotive market is likely to see a downfall as electric vehicles have fewer mechanical parts as compared to conventional gasoline-based vehicles. As a result, the volume of gears used in automobiles is likely to be reduced. Also, due to advancements in motor drive technology (such as in-wheel motors), the automotive gear industry might suffer a decline in its growth.
    GG Automotive Rating

    • RECOMMENDATION

      Sell

    • GG Automotive Detail Info

    Industry Statistics

    PUBLIC LIMITED

    Registered In

    India

    last Updated

    29/03/2021

    Listing Date

    12/11/2021

    Registered Date

    15/02/1974

    Planify Ticker

    GG

    Reg Office: 2-A, I.S. Gajra Industrial Area-1, A.B. Road, Dewas Dewas MP 455001 (India)

    Visit Website

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