Force Motors Hits 5% Upper Circuit After Net Profit In Q2 Grows 395%

Force Motors, the Abhay Firodia group’s flagship company, witnessed strong investor interest, reaching the 5 per cent upper circuit at Rs 4,053 per share on November 10. This surge followed the company’s impressive performance in the July-September quarter (Q2FY24).

For the July-September quarter of FY24, the company reported a net profit of Rs 94 crore, which displays a strong improvement from a net profit of Rs 19 crore reported in the same period of last year, which is an increase of 395 per cent YoY.

The consolidated revenue from operations grew by 42.40 per cent YoY to Rs 1,800 crore in Q2 FY24. The company witnessed an improvement in its operating profit, reaching Rs 221 crore in Q2 from Rs 98 crore in Q2 FY23, while the EBITDA margin expanded by 400 basis points YoY to 12 per cent.

Force Motors is a fully vertically integrated automobile company with expertise in the design, development, and manufacture of the full spectrum of automotive components, aggregates, and vehicles.

Its range of products includes light commercial vehicles (LCVs), multi-utility vehicles (MUVs), small commercial vehicles (SCVs), sports utility vehicles (SUVs), and agricultural tractors.

According to SIAM data, Force Motors market share grew to 4.3 per cent in Q2FY24 as compared to 3.3 per cent in the year-ago period. It increased its presence across key geographies like Tamil Nadu, Maharashtra, Uttar Pradesh, Rajasthan, West Bengal, and Gujarat.

In the September-ended quarter, foreign institutional investors (FIIs) have increased their stake to 4.9 per cent from 4.1 per cent in the year-ago period.

Institutional investors, too, have upped their stake to 6.5 per cent in September 2023 from 5.5 per cent in June 2023.

However, mutual funds have trimmed their stake to 0.9 per cent in the September-ended quarter from 1.09 per cent in the year-ago period.

Currently, the stock of Force Motor is trading at 18 times (x) price-to-earnings (PE) ratio, lower than its sector PE ratio of 33.7x, suggested data.