Stock of this auto ancillary company has zoomed 241% in six weeks

Shares of Automotive Stampings & Assemblies (ASAL) hit a record high of Rs 260.15 and were locked in the 5 per cent upper circuit on the BSE in Monday's trade. The company recently announced that it has decided to establish a new plant in Pune.

The stock of the auto ancillary company was frozen at the upper circuit for 14th straight trading day, and has surged 95 per cent during the period. In the past six weeks, it zoomed 241 per cent from level of Rs 76.25, on October 25, 2021. In comparison, the S&P BSE Sensex was down 6 per cent during the same period. Further, in the past three months, the market price of ASAL skyrocketed 363 per cent, as against 1.6 per cent decline in the benchmark index.

"We hereby inform you that the company has decided to establish a new plant at Survey No. 679/2/2, Alandi Road, Kuruli, Chakan, Taluka : Khed, District, Pune - 410 501," ASAL said in exchange filing.

Currently, ASAL is trading under the T group on the BSE. In the T2T segment, each trade has to result in delivery and no intra-day netting of positions is allowed. Till 01:05 pm; a combined 361,802 shares were changed hands and there were pending buy orders for 15,698 shares on the NSE and BSE.

For the first half (April-September) of the financial year 2021-22 (FY22), the company's standalone net loss declined to Rs 8.13 crore from Rs 25.68 crore in H1FY21. Revenue from operations grew 160 per cent year on year to Rs 242 crore from Rs 93 crore during same period of last fiscal.

The net worth of the ASAL as at September 2021 was negative. These indicate that material uncertainty exists that may cast significant doubt of the company’s ability to continue as a going concern and, therefore, that the company may be unable to release its assets and discharge its liabilities in the normal course of business.

"However, with continued efforts, the company expects to address the material uncertainty in future. According, the above unaudited financial results have been prepared on going concern basis which contemplates realisation of assets and settlement of liabilities in the normal course of business," ASAL said in notes to the financial results.

On October 6, 2021, CRISIL Ratings had upgraded its rating on the long-term bank facilities of ASAL to 'CRISIL BBB/Stable' from 'CRISIL BBB-/Stable' and has reaffirmed its 'CRISIL A3' rating on the short-term bank facility.

The upgrade reflects expected improvement in the financial risk profile in the near term, supported by cash inflow from sale of land parcels in Chakan, Maharashtra, and Halol, Gujarat, for total consideration of Rs 113 crore; and better cash flow from operations. The company will use the proceeds from the land sale for debt reduction. The upgrade also factors in expected sustenance of operating performance, supported by healthy growth in revenue and profitability owing to recovery in end user demand, receipt of new orders and cost rationalisation initiatives, the rating agency said in rationale. CLICK HERE FOR MORE DETAILS

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