A long-forgotten auto stock from the stable of CK Birla Group is not only defying the ongoing selloff on Dalal Street but has also turned multibagger. The stock of Hindustan Motors, famous for the iconic Ambassador car, has rallied 125 per cent in just 3 weeks when the Sensex lost nearly 3 per cent.
Since May 25, the smallcap has been regularly hitting upper circuits to scale new 52-week-highs every day. On Monday also, the stock hit the 5 per cent upper circuit limit to trade at Rs 24.35. With a market cap of a little over Rs 500 crore, the stock’s PE has also shot up to 26x.
The sharp rally in Hindustan Motors shares came after reports that the Ambassador car, which was the king of Indian roads once upon a time, will make a comeback with a new engine and design in the form of ‘Amby’. To build the modern EV, Hindustan Motors has signed an MoU with a European company, reports said.
The report, quoting Hindustan Motors director Uttam Bose, said HM and the European car maker are likely to invest Rs 600 in the joint venture and that the new car is likely to be launched in 2024.
In the last financial year 21-22, the company had not reported any revenue from operations as against Rs 1.17 crore in FY21. The other income, however, jumped to Rs 14.58 crore against Rs 11.01 crore in FY21. The profit of the company jumped to Rs 18.65 crore against Rs 3.76 crore a year ago.
The stock, however, has no analyst rating yet.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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