AUTOLINE INDUSTRIES

Forging top-tier auto parts for OEMs

Floated in 1995 as a partnership firm, Pune-headquartered Autoline Industries has by now emerged as a medium-sized engineering and auto ancillary entity engaged in the manufacture of sheet metal components, sub-assemblies and foot control modules, parking brakes, hinges, cab stays and cab fits, exhaust systems, tubular structures, and fabrics for large OEMs in the automobile industry, with a presence in both domestic and international markets.

The company has more than 10 state-of-the-art manufacturing facilities, backed by in-house design and engineering services and a commercial toolroom. It caters to almost all global OEMs, supplying over 3,000 products getting assembled in different passenger cars and commercial vehicles.

For over a decade, the company was in bad shape on the financial front. During the last 13 years, sales turnover nosedived from Rs 805 crore in fiscal 2013 to Rs 206 crore in fiscal 2021, with operating profit slumping from Rs 76 crore to Rs 9 crore and the profit at net level plunging from Rs 39 crore into the red with a loss of Rs 42 crore. But after 2021, the company started staging a turnaround. In fiscal 2022, the sales turnover amounted to Rs 568 crore, going up to Rs 660 crore in fiscal 2025, with operating profit shooting up to Rs 46 crore in fiscal 2022 and further to Rs 68 crore in fiscal 2025. In similar fashion, the net profit in 2022 amounted to Rs 8 crore and moved up to Rs 18 crore in fiscal 2025.

SMART MOVES

This smart turnaround is attributed to the increased operational efficiency, improvement in productivity and significant cost-saving measures. What is more, prospects for the company going ahead are expected to expand further. Consider:

• Thanks to rising incomes, growing aspirations and easy availability of bank finance for vehicles, the demand for automobiles is on the rise. In order take advantage of the rising demand for vehicles, OEMs are excited to procure top-tier auto components to cater to the burgeoning demand for sophisticated and distinct vehicles. This in turn has further propelled the growth momentum of Autoline.

TATA TIES

• Tata Motors, a major client of Autoline, has expanded its operations at Sanand in Gujarat. In order to cater to its valued client, the company has set up a greenfield plant at Sanand at a cost of around Rs 50 crore. As the plant has already gone on stream, the company is eligible for government subsidies as per the Gujarat government's industrial promotion policy. The new plant has the capacity to produce 2.40 lakh auto components per annum. This plant will enable Autoline to push up its topline as well as bottomline from the current year. Again, it has just completed a capacity expansion and operational efficiency improvement programme at its Pune plant. Financing this expansion will be done through the issue of debentures and warrants.
• The company has finalised a plan to divest its investment in Autoline Industrial Parks Ltd, which will lead to a substantial influx of funds totalling Rs 95 crore over the next two years. This strategic move will not only fortify its financial position but also effectively address the requirements for working capital enhancement and debt reduction.
• The company has embarked on an exercise to deepen its relationship with major OEMs such as Tata Motors and Mahindra, and attract new clients, forging partnerships with emerging new players like MG and reaching out to other OEMs, including Suzuki. This strategy to expand the client list aims to create a more balanced revenue mix and reduce reliance on a limited set of vendors.
• Autoline's growth strategy is further bolstered by favourable industry trends such as the GST reduction on vehicles from 28% to 18%, and RBI repo rate cuts are expected to boost demand in the automotive sector.

NEXT PHASE

• As Autoline gears up for its next phase of growth, it appears wellpositioned to capitalise on the evolving automotive landscape. With its focus on operational efficiency, strategic expansions and commitment to innovation, Autoline is aiming to solidify its position as a key player in the Indian auto component industry.
• With a view to expanding its growth horizons, the company has em barked upon a significant diversification strategy with three major announcements. It has entered the electric vehicle segment through its subsidiary while simultaneously commissioning a solar power project to reduce operational costs. The company has also entered the railways and locomotive business for around 40 products, including sliding doors, stainless steel endwalls, water tanks, flat bogey frames, and side wall assemblies. Autoline has already launched two electric two-wheeler models, Oxstar A1 and Z2. Simultaneously, it has commissioned a 6.50 MW solar power facility that will supply power to its manufacturing units and generate annual savings of Rs 4-5 crore in electricity costs. With all these developments, the management expects the sales turnover to cross the Rs 1,000 crore mark by 2027. The share price is quoted around Rs 74. Discerning investors can add this stock in their portfolios with a long-term perspective.

PERFORMANCE INDICATORS (Rs. in crore)

AVT NATURAL PRODUCTS

Adding value to nature's goodness

AVT Natural Products, a part of the AV Thomas group – a well-known industry house of south India — is a leading manufacturer of plant-based extracts and natural-ingredient solutions for the food, beverage, animal nutrition and nutraceutical industries. The AV Thomas group is an established, well-diversified, family-owned group of companies with interests in plantations, spices, natural ingredients, consumer products, leather goods and medical devices. The group’s passion for new initiatives, commitment to quality and emphasis on sustainable business practices have enabled it to create world-class businesses and emerge as a leader in its chosen areas.

AVT Natural Products is engaged in five primary businesses: 1) Marigold extracts for eye care, food colouring and poultry pigmentation. 2) Spice oleoresins and oils for food colouring and flavouring. 3) Value-added teas — decaffeinated teas and instant teas. 4) Animal health & nutrition products. 5) Rosemary extract. The company has three wholly-owned subsidiaries, namely AVT Natural Europe Ltd, (which has a subsidiary, AVT National North America Inc), AVT Natural SA De Cv, Mexico and AVT Natural FZCO.

Despite facing headwinds in recent years, the company has fared well on the financial front. During the last 12 and a half years, its sales turnover has more than doubled from Rs 290 crore in fiscal 2014 to Rs 622 crore in the 18-month period ended sept 2025, with operating profit inching up from Rs 74 crore to Rs 85 crore and the profit at net level improving from Rs 42 crore to Rs 61 crore. What is more, prospects for the company are much better going ahead. Consider:

• From its inception in 1986, when the company started with the cultivation of marigold, it has emerged by now among the top players in this segment. Starting with marigold cultivation on 200 acres of land, the cultivation area has been expanded to over 20,000 acres, producing around 100,000 tonnes of flowers. Interestingly, the management has decided that marigold will remain a key business segment, contributing to both the top-and bottomline. Sustaining growth with a focus on efficiency is key, with low marigold prices and renewed market competition from China. The company will continue to strengthen its agricultural growing base while focusing on process and cost improvements. It will invest continuously to increase capacity to cater to growth in this segment, while also improving its compliance practices. New hybrids will be rolled out in a phased manner to ensure sustainable growth in flower volumes.
• AVT is one of the very rare suppliers that is vertically integrated - from ‘seed to feed or fork’, including seed selection, breeding, and cultivation for some species of plants. It has state-of-the-art in-house extraction technology for the isolation and standardization of high-quality oils, oleoresins and extracts. The company has one of the finest systems and processes in place, having traceability from the farmer to the finished product, adhering to stringent quality checks throughout the processes, and enabling it to cater to both food-grade (human consumption) and feed-grade (animal consumption) oleoresin markets. Its dedicated R&D and extraction facilities have the capabilities to offer customised solutions to clients. In its continued bid to diversify away from marigold and develop new ingredients, AVT in FY21 started processing rosemary. Similar to food-grade marigold oleoresins, the company has signed a strategic supply agreement with Kemin Industries for rosemary extract. Rosemary is widely used in the food & beverage industry as a preservative due to its antioxidant and antimicrobial activities. Several studies demonstrate that the antioxidant capacity of rosemary extract is more effective than that of other conventional antioxidants used in the food industry. Kemin, which currently sources part of its requirement of rosemary from China, will increasingly source from AVT going ahead, with the latter becoming the exclusive supplier in future, as was the case for food-grade marigold oleoresins. This assures a robust volume growth for the near term.
• With a view to further diversifying its product range, the company ventured into the value-added speciality tea business. Its products included decaffeinated tea and instant tea. In fact, it was the first company to venture into the decaffeinated tea space. This value-added tea segment continues to be a major growth area for AVT. The company is now investing in new capacity to service its growing list of customers, with the aim of doubling the business in the next 2 to 3 years. It is exporting its specialised teas to several developed countries, particularly in Europe, where demand for decaffeinated tea is high. Little wonder that today AVT is the largest player in this tea segment with a 50 per cent global marketshare. The company leveraged its success in decaffeinated tea to venture into instant tea. Thanks to its strong technical knowhow and remarkable product development capabilities, the company has emerged as a preferred supplier to prominent customers like Unilever, Nestle, Tata Consumer and Coca-Cola. Today, in the case of instant tea, while China is a strong competitor in green tea, AVT is the biggest player in black tea.
• The company’s foray into animal nutrition can be a potential gamechanger for AVT. While it was already catering to the animal nutrition market indirectly through the supply of feedgrade oleoresins, its penchant to move up the value chain through strong research and technical capabilities helped it come out with end-to-end solutions where it can partner with clients. Demand for the company’s products and solutions is on the rise globally. Recently, it signed an exclusive agreement in Canada with TOUIN Nutrition, a global leader in innovative feed specialities. Demand from other countries has also started growing. With the growing demand for its products and its rising stature, the company management has envisioned transformation of AVT from a mere solvent extractor to an ingredient solutions provider, backed by higher investment in R&D. The company’s share price is quoted around Rs. 63. Long term prospects for the company are quite encouraging. Investors with long-term perspective can invest in this scrip.

PERFORMANCE INDICATORS (Rs. in crore)