🟡 1. At a Glance
Omax Autos started life as your average auto ancillaries maker, supplying tubular and sheet metal components to Tata Motors. Fast forward to 2024–25, and the company has reinvented itself as a key vendor for Indian Railways. With profits bouncing back and debt falling, the optics are nice. But behind the scenes? Heavy contingent liabilities, promoter stake falling, and suspiciously high “Other Income” powering net profits. So… is it value or value trap?
🎬 2. Introduction with Hook
From Truck Parts to Train Dreams.
Omax Autos has come a long way from supplying Tata trucks to making components for Indian Railways’ LHB coaches.
But this turnaround isn’t just about diversification — it’s a full pivot.
And investors love a comeback story… until they see the footnotes.
Earnings boosted by ₹42 Cr “Other Income”?
Contingent liabilities worth ₹167 Cr?
Promoters selling stake like hot samosas? Hmm. Let’s unpack.
🏭 3. Business Model – WTF Do They Even Do?
Old Omax (pre-2020):
- Supplier to Tata Motors (CV segment)
- Auto components: tubular, sheet metal, machined parts
New Omax (post-2020):
- Indian Railways: coaches, wagons, freight parts
- Doubled railway manufacturing capacity
- Entered defence infra fabrication
- Approved vendor for Metro projects
Factory Footprint:
- 5 plants across India
- ISO/IRIS-certified facilities catering to large institutional buyers
This ain’t your local lathe shop anymore — they’re gunning for Bharat Rail Infra 2.0.
📊 4. Financials Overview – Profit, Margins, ROE, Growth
| Metric | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|
| Revenue | ₹222 Cr | ₹301 Cr | ₹355 Cr | ₹369 Cr |
| Operating Profit | ₹-17 Cr | ₹16 Cr | ₹25 Cr | ₹32 Cr |
| OPM % | -8% | 5% | 7% | 9% |
| Net Profit | ₹23 Cr | ₹-24 Cr | ₹12 Cr | ₹22 Cr |
| EPS | ₹10.97 | ₹-11.38 | ₹5.45 | ₹10.08 |
| ROE | 10.9% | -11.3% | 5.4% | 10.1% |
✅ Profit comeback
✅ Margins improving
❌ FY25 net profit includes ₹42.5 Cr Other Income = massive distortion
❌ True operating PAT < ₹5 Cr in some quarters
💸 5. Valuation – Is It Cheap, Meh, or Crack?
| Metric | Value |
|---|---|
| CMP | ₹86.1 |
| Book Value | ₹147 |
| P/B | 0.58x |
| P/E (TTM) | 17.5x |
| Dividend Yld | 2.32% |
| FV Range | ₹90–₹120 |
Why ₹90–₹120?
- Assigning core P/E of 15–18x to sustainable earnings (₹6–₹7 EPS)
- Add ₹30–₹35 “asset” value from undervalued Book
- But apply discount for contingent risks
So yeah, cheap-ish — but not without “terms & conditions apply”.
🧨 6. What’s Cooking – News, Triggers, Drama
- Massive capex push from Indian Railways
- Entry into defence fabrication = long gestation but high margin
- FY25: Resignation of Company Secretary (May 2025) = governance flag?
- Promoter stake falling consistently
- Credit ratings: mixed bag from Infomerics & Fitch (2023–24)
What to watch:
→ New railway orders
→ Margin consistency
→ Whether Other Income disappears next year like your friend after borrowing money 😅
🧾 7. Balance Sheet – How Much Debt, How Many Dreams?
| Metric | FY20 | FY23 | FY25 |
|---|---|---|---|
| Borrowings | ₹231 Cr | ₹119 Cr | ₹77 Cr |
| Reserves | ₹250 Cr | ₹265 Cr | ₹294 Cr |
| Fixed Assets | ₹145 Cr | ₹313 Cr | ₹271 Cr |
| Contingent Liab. | — | — | ₹167 Cr 🧨 |
✅ Debt reduction = major positive
❌ But contingent liabilities > entire market cap 🤯
🛑 Asset base steady — no new major capex plans
💵 8. Cash Flow – Sab Number Game Hai
| Year | CFO | CFI | CFF | Net Flow |
|---|---|---|---|---|
| FY23 | ₹35 Cr | ₹-9 Cr | ₹-34 Cr | ₹-8 Cr |
| FY25 | ₹34 Cr | ₹-13 Cr | ₹-45 Cr | ₹-23 Cr |
Omax’s cash flow is healthy on paper but not explosive.
No crazy expansion. Just business-as-usual.
📉 9. Ratios – Sexy or Stressy?
| Ratio | Value |
|---|---|
| ROCE | 9.3% |
| ROE | 3.4% |
| Interest Coverage | 1.4x |
| Debt/Equity | 0.26x |
| Debtor Days | 4 |
| Inventory Days | 14 |
| Working Cap Days | 7 |
✅ Working capital ultra lean
✅ Low debt
❌ ROE still below cost of capital
❌ Interest cost still burdensome vs. core EBIT
🧾 10. P&L Breakdown – Show Me the Money
Quarterly Trend (Recent):
| Quarter | Sales | Op Profit | Net Profit | Other Income |
|---|---|---|---|---|
| Mar ’24 | ₹114 Cr | ₹10.7 Cr | ₹0.49 Cr | ₹4.8 Cr |
| Dec ’24 | ₹92 Cr | ₹7.7 Cr | ₹2.87 Cr | ₹5.3 Cr |
| Sep ’24 | ₹78 Cr | ₹7.1 Cr | ₹15.5 Cr | ₹24.7 Cr |
🧨 One-time windfalls make results noisy.
Without these, PAT would be much smaller.
🧩 11. Peer Comparison – Who Else in the Game?
| Company | P/E | ROCE | ROE | P/B | CMP |
|---|---|---|---|---|---|
| Uno Minda | 67x | 18.8% | 17.6% | 11x | ₹1,098 |
| Schaeffler India | 62x | 25.7% | 19.1% | 11.7x | ₹4,037 |
| Bharat Forge | 62x | 13.1% | 12.3% | 6.8x | ₹1,311 |
| Omax Autos | 17.5x | 9.3% | 3.4% | 0.58x | ₹86 |
Translation:
– Others run at 300 km/hr, Omax is jogging with a backpack of liabilities 😬
– Cheap yes, but you’re paying for potential, not performance
📊 12. Miscellaneous – Shareholding, Promoters
| Category | Jun ’22 | Mar ’25 |
|---|---|---|
| Promoters | 57.3% | 53.3% ↓ |
| Public | 42.7% | 46.7% ↑ |
| FII + DII | ~0% | ~0% |
Red Flag: 4% promoter holding dilution in 3 years
No Institutions, No analysts = small cap under the radar
🧠 13. EduInvesting Verdict™
Omax Autos is a fascinating mid-life crisis story:
→ From trucks to trains.
→ From losses to profits.
→ From debt-ridden to stable.
But… this is still a cautionary tale:
– Contingent liabilities are massive
– Other income is inflating profits
– Core business needs a full year of clean, margin-led growth
🎯 Fair Value Range: ₹90 – ₹120
✅ Cheap vs. book
✅ Railway exposure = kicker
❌ Must treat PAT like paneer in a restaurant — ask if it’s real
✍️ Written by Prashant | 📅 July 3, 2025
Tags: Omax Autos, railway stocks, auto components, Indian Railways vendor, deep value stock, contingent liabilities, turnaround business, EduInvesting
