ATLAS BATTERY LIMITED

Group Project By:

Aqsa A. Khan
Rounaq Qaiser
 Macroeconomic Overview

Disruption in business due to Covid19

Rise in inflation rate approximately 5% increase from 2019

Decreasing purchasing power

High cost of imports

GDP growth is estimated to have contracted by 1.5% in FY20

Fluctuation in Dollar rate and depreciation of Rupee

Positive influence of budget 2020
 Battery Industry Overview

Substantial growth in last decade

Capacity enhancement in industry

Increase in demand for batteries (due to electricity
shortage and purchasing of automobile)

Decrease in sales due to Covid19

Emergence of new companies

Low barriers of entry

Technology intensive industry
 Business Description


Manufacturer of battery 
Supplies to whole country

Founded by Yousaf H. 
Target market is
Shirazi in 1962 automobile industry,

Under the PSX sector of power sectors,
auto parts and households, and other
accessories industries

Manufactures batteries for 
Part of Atlas Group
automobiles, UPS/Solar
Panels, industrial
appliances
 SWOT ANALYSIS
Strength:
• Assistance & support of Atlas Group
• Recognized as quality leader
• State of the art production plant
• Well trained staff
• Joint venture with GY Yuasa
Opportunities:
• Demand of MF batteries is developing
• Growth of automotive and power sector
• Development in CPEC
• Technological improvement from support of
GYIN (Global Youth Innovation Network )
Weakness:
• High price of product
• Limited variety of product in stock
• Wastage & claims are more than international
standards
• Low manufacturing ability of manufacturers
Threat:
• Covid19 has rebounded the market
• Governmental measure on control of power crisis
• Increase in cost of imported raw material
• Influx of cheap battery import from Afghan
Transit Trade
• SRO removal on import of raw material at zero
rate
• Rise in competition due to low barriers of entry
 Porter’s Five Forces Model
→ Rivalry among the competing firm:
• Major competitors are Exide, Osaka, Daewoo and Phoenix
• Companies compete for cost, technology, and quality leadership to attract customers
• Rival at peak during the summers
• High efforts of marketing made to snatch customers of rival

→ Threat of new entrant:

• Low barriers of entry allowed many companies to enter
• New entrants sustain the competition by better technology and unconstrained finance

→ Availability of substitutes:
• All the competitors providing similar type of batteries
• No substitute for batteries however better technology damages demand
→ Bargaining power of Suppliers:
• The foreign suppliers of raw material has increased their cost
• Few but enough suppliers to switch
• Suppliers vary for different raw materials thus lower risk of unionization

→ Bargaining power of Customers:

• The support from Atlas Group has reduced the bargaining power of customers as major customer is
Atlas Honda Ltd
• The quality preference by customers reduces their bargaining power
Ratio Analysis of AGS
Activity / Turnover Ratios
• The asset turnover ratio slightly increased from 1.4 times in 2019 to 1.6 times in 2020.
• The inventory turnover witnessed a upward trend from 5.1 times in 2019 to 5.6 times in
2020.
• Debtor turnover increased to 14 from 9 times in 2020.
• The creditor turnover days have decreased to 35 days compared to 39 days in 2019.
• This translated into an overall operating level cycle of positive 57 days as compared to
73 days in last year. It means money is tied up for 57 days.
Liquidity Ratios
• The current ratio of 2.2 times slightly increased over last year of 1.6.
• Quick ratio was recorded at 0.9 same as of 2019.
• The interest coverage ratio is 0.6 in 2020.
• The liquidity ratio improved over the previous years.
Profitability Ratios
• Gross profit as a percentage of revenue stands at 7% as compared to 2.1%. Increase is mainly due to
cost control measures.
• ROE improved and is -6.6% in 2020 compared to -11.2% in 2019.
• Profit margin stood at -1.1% in 2020 and -3.3% in 2019.

Investment / Market Ratios

• The Company’s earnings (loss) per share was recorded at Rs. 13.43 per share as compared to Rs. 24.3
per share in 2019.
• P/E ratio further decreased to -12.5 times in 2020 compared to -3.9 times.
Technical Analysis
• Downward trend in 2018 & 2019
• Upward trend from 2020
• On 21 July 2021, Doji Star Bearish appeared. It indicated bearish reversal. During an
uptrend, the market builds strength on a long white candlestick and gaps up on the
second candlestick. However, the second candlestick trades within a small range and
closes at or near its open. This scenario generally shows erosion of confidence in the
current trend.
• On 17 Aug 2021, Dragon Fly Doji formed. During a downtrend, there is a massive sell off
after the candle starts. However, the candle closes at or near its high and at the same
level as the open. This signifies a weakening of the previous bearish sentiment. The longer
the lower shadow, the smaller the upper shadow, and the smaller the real body, the more
significant the pattern is. White real body is more bullish than black body.
• As of 27 Aug 2021, Belt hold Bearish is observed. During an uptrend, a black body occurs
in an upside gap with an open that is also the high for the candle. This may cause many
positions to be sold, perpetuating a bearish reversal. The longer the height of the belt-
hold candlestick the more significant the pattern is.
Comparison with Exide Pakistan
EXIDE Pakistan Financial Ratios:
• Strong sale in Exide than AGS
• Exide occupied the cyclical pattern
• Greater market share than AGS
• More upward trend in Exide in 2021 than AGS
• Price Earning Ratio is 13.5% compared to industry’s 11.68%
FUTURE OUTLOOK OF ATLAS
BATTERY
The industrial outlook looks promising which indicates that Atlas being among the
market leader would also do well in future.
The giant governmental projects for solar and wind plants and expansion of
automotive industry indicates increased future demand of batteries which could be
a chance for growth for Atlas.
The company has gained trust of the customers and still is a first choice of
customers. The company also declares in its annual report of 2020 that its capital
structure is adequate for foreseeable future.
The company sales were hit hard in Covid19, thus future will be impacted by
Covid19 affects for a longer time.
Forecast Trend line of Atlas Battery Earning
Viewpoint being an “Investor”
The company is facing declining sales since 2018 plus the EPS have been negative from
2 years. Also, compared to Exide, AGS had underperformed. The forecast shows that
ATBA shares are not a good investment for making money as there will be a negative
trend in the future and the earning growth. Decrease in sales of 4.7%, loss after tax of
Rs. 327099000, negative EPS of -13.43% and negative Price earning ratio of -12.5%
indicate me to not invest in it.
However, as the automotive and power sector has optimistic future, thus for a long-
term investment, Atlas Battery could be considered for investment.
 Here We End up this presentation by
Thanking to our teacher for giving this
opportunity.