Force Motors shares fall over 2% after June auto sales disappoint

Force Motors stock slips in trade: Shares of automobile company Force Motors fell as much as 2.29 per cent to hit an intraday low of Rs 8,975.85 per share. 

The fall in the share price came on the back of weak June sales numbers. Force Motors’ total sales slipped 2.9 per cent to 2,553 units, as opposed to 2,628 units in the same month last year (June, 2023).

The company saw its biggest fall in the export sales of Small Commercial Vehicles (SCV), Light Commercial Vehicles (LCV) and Utility Vehicles (UV), which dropped a whopping 80 per cent to 88 units, as opposed to 440 units in the same month last year.

 

However, Small Commercial Vehicles (SCV), Light Commercial Vehicles (LCV) and Utility Vehicles (UV) sales, domestically, surged 12.7 per cent to 2,465 units in June 2024, as compared to 2,188 units in June 2023.

Force Motors Ltd is an Indian multinational automotive manufacturer headquartered in Pune, has a rich history dating back to its establishment in 1958 as Bajaj Tempo Motors. 

Originally a joint venture between Bajaj Trading Ltd and Germany's Tempo, the company specialised in manufacturing auto-components. In 2005, it rebranded to Force Motors Ltd.

Known for iconic brands like Gurkha, Matador, Minidor, and Traveller, Force Motors has forged partnerships with global giants such as Rolls Royce, BMW, Daimler, ZF, Bosch, VW, Traton, and MAN for manufacturing auto-components. It holds the distinction of being India’s largest van maker and operates with complete vertical integration, producing its own components across its entire product range.

Force Motors boasts a widespread dealer network throughout India and exports its vehicles to various international markets including Africa, Latin America, SAARC and ASEAN countries, Gulf nations, and Germany.

Financial performance 

Force Motors’ reported a 4.3 per cent year-on-year (Y-o-Y) decrease in net profit to Rs 140.3 crore for the fourth quarter ending March 31, 2024 (Q4FY24, as opposed to a net profit of Rs 146.6 crore in the same quarter a year ago (Q4FY23).

Revenue from operations for the quarter surged 35 per cent to Rs 2,011.2 crore from Rs 1,490.3 crore in the corresponding period of the previous fiscal year. 

At the operating front, earnings before interest, tax, depreciation, and amortisation (Ebitda) rose sharply to Rs 278.7 crore, compared to Rs 120.8 crore in the same quarter last year. 

The Ebitda margin also improved to 13.9 per cent from 8.1 per cent in the previous year.

The board of directors has proposed a dividend of Rs 20 per equity share of Rs 10 each for FY24.

The market capitalisation of Force Motors is Rs 11,908.42 crore, according to Bombay Stock Exchange (BSE).

At 10:13 AM, shares of the company were trading 0.54 per cent lower at Rs 9,137.20 per share. In comparison, BSE Sensex was trading 0.65 per cent higher at 79,956.52 levels.