Omax Autos hits upper circuit on capacity expansion

The Board of Directors of Omax Autos approved the proposal for diversification and expansion of existing capacity for manufacturing products and equipment supplied to the Indian Railways. The meeting was held on June 7, 2018.

The company’s existing capacity consists of converting 4,800 tons p.a. of steel into various parts and equipment used by the railways. The utilisation level of this existing capacity is in the range of 90-100 per cent.

Over the next 2-3 years, company has proposed to double up its existing capacity. The expansion would be carried out in phases. The capex for the said expansion would be around Rs. 100-120 crores, which will be funded through internal accruals and external borrowings. It will be also funded through realization from disposal of existing surplus assets.

Through this expansion, the company will be able to utilize its resources more effectively and generate additional revenue streams.

Omax Autos Limited operates in the automotive components and parts segment for the two-wheeler and four-wheeler industry. For the quarter ending March 2018, its revenue was up by ~31 percent on YoY basis. Also, it generated net profit of Rs. 13.17 crores as against net loss of Rs. 0.32 crores in the March quarter of FY17.

On Thursday, the stock had closed at Rs. 146.60 per share. On Friday, it opened at Rs. 153.90 hitting the upper circuit of 5 per cent.