This auto stock has surged 160% in 3 months; zoomed 630% in 1 year

The stock price of Force Motors surpassed its previous high of Rs 9261.80, touched on April 8, 2024

Shares of Force Motors hit a new high of Rs 9,246, surging 14 per cent on the BSE in Friday’s intraday trade, amid expectation of strong earnings.

The stock surpassed its previous high of Rs 9,261.80 touched on April 8, 2024. In past three months, the stock price of the automobile company has more than doubled, gaining 160 per cent during the period. Besides, in the past one year, it has zoomed 630 per cent.

The board of directors of Force Motors is scheduled to meet on April 26, 2024 to consider and approve the financial results of the company for the quarter and year ended as on March 31, 2024; and to consider and recommend dividend, if any.

For the first nine months of financial year 2023-24 (9MFY24), Force Motors had reported a net profit of Rs 264.97 crore on the back of a strong operational performance. The company had posted a net profit of Rs 2.89 crore in 9MFY23. Revenue from operations grew 40.8 per cent to Rs 4,981 crore from Rs 3,538 crore.

Force Motors is engaged in the manufacturing of light commercial vehicles (LCV), small commercial vehicles (SCV), utility vehicles (UV), agricultural tractors and high technology automotive aggregates. The primary brands in LCVs and Multiutility vehicles include Traveller, Urbania, T3 Buses, Trax, Citiline and Gurkha, while the brands in tractors are Balwan, Orchard, Abhiman and Sanman.

The component businesses of the company for supply of engines, both to Mercedes-Benz and BMW have improved on robust demand volumes. These high-end vehicles, in the top bracket of the passenger car market are seeing good demand due to stability and improving spending ability in the market. The dedicated plants for these products are functioning well.

The performance of Force Motors is expected to further improve with new product launches (face-lift versions of Urbania, Citiline and Gurkha) and improving traction in the exports market, while better utilisation of capacity will enable operating margins of 12-13 per cent over the medium-term, analysts said.

Demand for LCV and MUVs catered to by FML has bounced back strongly with opening up of schools, corporate offices and pick up in travel, they added.

Meanwhile, last month, the board of Force Motors decided to close the line of business of the company, consisting of manufacturing and dealing in agricultural tractors and connected activity from March 31, 2024.

The closure of business is part of the company's product rationalisation programme under which it will focus on its core segments such as shared mobility transportation, last mile mobility and the creation of special vehicles for civil and defence applications, the company added.