Jamna Auto reaches a record level; grows 17% in one week on healthy outlook
Shares of Jamna Auto hit a record high of 129.70 rupees as they rose 6% on BSE in intraday trading on Friday amid heavy volumes, in an otherwise weak market, with outlook healthy.
At 9:33 a.m., the stock was 5% higher at Rs 128.70 on the BSE, compared to a drop of 0.54% on the S&P BSE Sensex. Around 2.1 million shares combined have already changed hands on the NSE and BSE in the first 20 minutes of trading. On average, less than 2 million shares combined have traded over the counter in the past two weeks. In the past week, the stock of the automotive auxiliary company jumped 17% against a 1% gain in the Sensex.
Jamna Auto Industries manufactures conventional leaf springs, parabolic leaf springs, air suspensions and lift axles primarily for commercial vehicles (CVs). With a consolidated annual manufacturing capacity of 3,00,000 MT, the company remains the largest CV spring manufacturer in India and the third largest in the world.
Volumes of medium and heavy commercial vehicles (M&HCV/trucks), the main end-user segment for Jamna Auto Group, increased by nearly 49% in fiscal 2022. The group is expected to experience similar growth, going forward, in line with the industry trend, ICRA said in a recent rating rationale.
“The ratings continue to reflect favorably the group’s leading position in the domestic leaf and parabolic spring market as well as its advantage over its peers, aided by scale, competitive pricing and strategic proximity to its customers. across its manufacturing sites in India.This has helped the group maintain a dominant share of business with most CV original equipment manufacturers (OEMs) with a market share of between 65-70% said the rating agency.
Meanwhile, ICICI Securities initiated a hedge on Jamna Auto with a “buy” rating on the stock with a target price of Rs 155 per share. “With macro tailwinds in place and Jamna Auto’s intention to diversify its products as well as its customer base, we expect a net sales CAGR of 29.6% for Jamna Auto in fiscal year 22-24E. This, coupled with its ability to maintain a margin trajectory of around 14% amid an increasing share of new markets (secondary market + exports), PAT is expected to grow at a CAGR of 40.6% over FY22-24E at Rs 278 crore per FY24E,” the brokerage firm said in a stock update.