Atul Auto to double capacity

Buoyed by significant growth in its topline and bottomline for the first half year ended September 30, 2010, Rajkot-based Atul Auto Ltd, one of the key players in three wheeler manufacturing industry, is planning to expand its manufacturing capacity for three-wheelers.

Atul Auto plans to invest around Rs30 crore for enhancing its production capacity. "Demand for our three-wheelers is increasing in the country. To cater to this demand, we plan to double our capacity by December 2011," Atul Auto Director Vijay Kedia said here today. Earlier, the Rajkot-based three-wheeler manufacturer, listed on BSE, had decided to set up a new plant in south India. But now, aims to expand capacity at its existing site in Gujarat.

The company posted a 188 per cent rise in its net profit for first half of fiscal 2010-11 at Rs 5.02 crore, up from Rs1.74 for the corresponding period last year. For the second quarter, the company posted net profit of Rs 2.92 crore as against Rs1.64 crore for the corresponding period last year, a rise of 78 per cent. "Earlier, this expansion was planned at a different site in a different state. But finally we decided to expand at our present site (in Gujarat) in order to save on huge investment into land. Funds for this expansion will come very comfortably from internal accruals and a rights issue, which is due to come in December this year," Kedia said. The company plans to enhance its dealership network to 120 from the present 100 by March 2011.

Last year, Atul Auto clocked a turnover of Rs 120 crore. This fiscal, it is targeting a turnover of around Rs 175 crore. The three-wheeler maker had also evinced an interest in acquiring a "not-less-than 51 per cent stake" in Scooters India, a public sector undertaking in which the government is mulling a divestment.

Meanwhile, commenting on the upward growth trend, Kedia, said, "Atul Auto has achieved Rs 5.02 crore PAT in the first half of this fiscal year. Though there is a pressure on cost but we assume higher production in second half should compensate that." Atul Auto Ltd, which manufactures and markets 16 models in the domestic market, is largest in Gujarat and one among the five top three wheeler manufacturing company in the country.