Hello Sir,

Hope you are doing well.

Listed space has some good auto ancillary companies dealing in Axle shafts.

Axle shafts are load-bearing components used in vehicles for transfer of rotational force from transmission system to wheels attached to axles.


GNA Axles is a leading supplier of Rear-axle shafts to 4W Auto OEMs.

The company got listed in Sep'16 and has been reporting very good set of numbers since then. What's also interesting is that promoters have been increasing stake gradually.

To understand the company better, we have shared notes from the AR 22 and Jul'22 CARE credit report of the company:


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GNA Axles - Notes from AR 22 and Jul'22 CARE credit report

General Points

  • Jalandhar based, incorporated in 1993
  • GNA group set up in 1946 for manufacturing of auto components for  commercial vehicles, tractors and off-highway equipment
  • GNA was promoted by Late Mr. Rachhpall Singh and his brother Mr. Gursaran Singh, the latter being the current managing director of the company
  • The company is engaged in the business of manufacturing and supplying axle shafts and spindles (ranging from 2 kg to 150 kg) to original equipment manufacturers (OEMs) and Tier-1 suppliers
  • GNA has its manufacturing facilities located in Hoshiarpur, Punjab with an installed capacity of around 6 million pieces per annum, as on March 31, 2022


  • Apart from catering to the domestic customers, GNA also exports its products to USA, Brazil, Sweden, Mexico, Italy, Spain, etc., with exports constituting around 60% of its TOI in FY22 (around 56% in FY21)
  • The company supplies its products to varied segments of the automotive industry, including commercial vehicles (CV or the on-highway segment), tractors, farm equipment and earth moving equipment (all three being part of the off-road segment)
  • GNA faces customer concentration with its top-5 and top-10 customers accounting for around 70% and around 82% of its total gross sales in FY22

Marketing and Distribution

  • The company is a tier-1 vendor for its supplies in domestic off-road segment while in the export markets, it supplies axles and spindles to larger and more established tier-1 vendors
  • GNA markets its products through the common group marketing network that caters a whole range of products including axles, gears and shafts under one roof

Raw material

  • The operations of the company are raw material intensive in nature with the raw material cost constituting around 59% of the gross sales in FY22
  • With global steel prices highly volatile in nature, the margins of GNA are exposed to raw material fluctuation risk

Working capital

  • The company maintains inventory of around 2 to 2.5 months with large product range (axle shafts and spindles ranging from 2 kg to 150 kg)
  • The average debtor days usually remain elongated as the company has major dependence on export customers for sales having credit period of close to 4-5 months

CAPEX plan

  • The company doesn’t have any major capex plans barring routine capex in the range of Rs 20 crore to Rs 25 crore which shall be funded through the internal accruals




Disclaimer: This is not a recommendation to buy/sell GNA Axles. The securities quoted are for illustration only and are not recommendatory.

Best Regards,

Ekansh Mittal
Research Analyst
Web: https://www.katalystwealth.com/

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