Affordable Robotic & Automation: The Microcap Robotics Company Turning Into a Profit Powerhouse

When you hear the word "robot" or "robotics," what’s the first thing that comes to mind?

For many, it’s the iconic movie Robot starring Rajinikanth. One important takeaway from it was the potential impact of robots on human lives. The movie depicted a future in which robots could replace humans, and given the rapid advancements in robotics and AI, it's hard to deny that this fiction could one day be our reality.

For those who recognize the potential robotics holds, we’ve identified a promising microcap robotics company to highlight today.

We are talking about none other than Affordable Robotic & Automation (ARA).

ARA: A Rising Star in Robotics

Affordable Robotic & Automation (ARA) has made significant strides as a leading provider of turnkey automation solutions for industrial automation. As the first robotics company to be listed on the Bombay Stock Exchange (BSE), ARA offers a range of cutting-edge solutions, including welding line automation using robotics and related design services, material handling automation services, and automated car parking systems.

ARA's services span three verticals:

One-Stop Parking Solutions

From automated car parking systems to advanced material handling solutions, ARA's innovations are reshaping urban infrastructure, making it more efficient and user-friendly.

Warehouse Automation

Specializing in robotic welding solutions and proprietary software development, ARA provides state-of-the-art automation for warehouses, ensuring reduced labor costs and increased operational efficiency.

Proprietary Software Development

ARA's proprietary software, such as I-ware, facilitates navigation using QR codes, manages warehouses efficiently, and controls robots with precision. This software is a game-changer for businesses looking to stay ahead in the competitive landscape.

Prestigious Clientele

ARA boasts an impressive list of clients, including industry giants like Mahindra & Mahindra, Maruti Suzuki, Honda, TVS, Piaggio, Volvo, and Eicher for automation services. For car-parking solutions, the clientele includes renowned names like Lodha, Shreepati Group, Parinee, Marvel, VTP Realty, Dhuleva Group, and Swastik Group.

Impressive Track Record

Over the past decade, ARA has sold more than 5,000 robots and installed over 10,000 car parking systems, serving customers in India, China, and other parts of Asia. This impressive track record underscores the company's commitment to quality and innovation.

Innovations and Subsidiaries

ARA's proprietary software includes I-ware, which offers navigation using QR codes, warehouse management, and robot control. Its subsidiary ARAPL RaaS, launched in 2021, specializes in warehouse automation and autonomous robots for efficient movement of materials. The subsidiary is also developing a mobile robotic multilevel car parking system using automated guided vehicles.

New Ventures

Recently, ARA entered the machine-shop automation sector, introducing two three-axis automated solutions designed for powertrain robots. The company expects to generate approximately ₹400 million in revenue from this new business line by FY25, highlighting its commitment to innovation and growth.

Affordable Robotics’s FY24 Results

On 31 May, Affordable Robotics's stock shot up 11%. As market participants, we are accustomed to seeing small fluctuations in share prices, often triggered by some news or a transaction by an institutional investor. However, an 11% jump is not an everyday occurrence and should pique the curiosity of a rational investor.

In fact, the significant jump was driven by the company’s extraordinary growth. In FY24, the company saw a 43% year-on-year increase in revenue, primarily fueled by 59% year-on-year growth in automation-segment revenue. This substantial revenue jump, paired with a smaller rise in operating expenses, resulted in a staggering 95% year-on-year jump in operating profit. Accordingly, profit before tax grew by 113% and profit after tax 197%.

What to Expect

The company's stock price has been consolidating over the past six months. Its underperformance over this period could be due to the losses it incurred in the first half of FY24. However, on 31 May, the stock hit a six-month high due to the significant increase in profitability. With an order book of around ₹820 million, the company looks set to maintain its momentum on profitability.

Since the start of 2024, the stock has risen 23%, with 12.9% of this coming after the company announced its FY24 results. Affordable Robotics hit a 52-week high of ₹851 on 28 August 2023, and a 52-week low of ₹324 on 31 May 2023. It currently trades at a price-to-earnings ratio of 110 and a price-to-book ratio of more than 6.

Conclusion

Affordable Robotic & Automation is not just a microcap robotics company; it is a profit machine poised to capitalize on the growing demand for automation solutions across various industries. With a strong order book, innovative solutions, and a burgeoning subsidiary, ARA is a company to watch in the robotics and automation space. Keep an eye on this rising star as it continues to redefine the future of automation.

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By analyzing and investing in game-changing companies like ARA, investors can stay ahead of trends and capitalize on the rapidly evolving robotics sector. For more insights and opportunities, make sure to follow our updates and stay informed on the latest market movements.

Disclaimer:

The information presented in this article has been compiled from multiple sources across the internet. It is intended for informational purposes only and should not be construed as investment advice. Any investment decisions should be made in consultation with a reputable financial advisor. The author and publisher of this article are not liable for any losses incurred by investors or traders as a result of the information provided.