At 10.56 am, the scrip was trading 4.5% higher at Rs 354 over its previous day’s closing price of Rs 338.5 apiece.
“A new multi-year bull cycle has started in the auto industry. The slowdown that we saw earlier has now more or less ended. In the case of three-wheelers, the earlier peak is yet to be reached. I think we are going to cover lost ground in 2023-24. We will also see the same trend in other segments. The worst phase is over and we are seeing a new sunrise,” Kedia told ETMarkets.
When asked about his favourite auto stock, he spoke about Rajkot-based Atul Auto which has announced a foray into the electric vehicles (EV) space with the unveiling of cargo and passenger variants of electric three-wheelers at the Auto Expo.
At present, 20% of the three-wheeler market in India is cargo and the remaining is used for passenger vehicles. “Now we are going to see a reversal of this trend and that too on a higher base. The cargo volume is going to explode in India because three-wheelers give last-mile connectivity. Due to the dominance of e-commerce players, the demand is going to increase. It is cost-effective also,” Kedia said.
Within EVs, which is regarded as a sunrise sector in India, Kedia said three-wheelers would be the first one to see mass-scale adoption. “Three-wheeler cargo can rise 40-50% year-on-year (YoY) in India. In fact, I see it as a global trend in the years to come,” he said.
Atul Auto’s September quarter shareholding pattern data shows that Kedia’s firm owns a 1.47% stake in the smallcap stock that has rallied over 106% in the last 6 months.“The company is in the right place at the right time and with the right products. The trend has just started. I am confident that Atul Auto has made India’s Tesla in three-wheelers,” said the investor, who is also a director in the company.
As per Trendlyne data, the highest target price for the stock goes up to Rs 320, while the average target price estimate is Rs 280, which shows a downside of 21% from the current market prices.
The consensus recommendation from 3 analysts for Atul Auto is a strong buy.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
