Jamna Auto hits record high; rallies 17% in one week on healthy outlook

The volumes of M&HCV's/ truck's, the key end-user segment for the Jamna Auto Group, grew by nearly 49% in FY2022

Shares of Jamna Auto hit record high of Rs 129.70 as they rallied 6 per cent on the BSE in Friday's intra-day trade amid heavy volumes, in an otherwise a weak market, on healthy outlook.

At 09:33 AM, the stock was 5 per cent higher at Rs 128.70 on the BSE as compared to 0.54 per cent decline in the S&P BSE Sensex. A combined around 2.1 million equity shares have already changed hands on the NSE and BSE in the first 20 minutes of trade. On an average, a combined sub 2 million shares traded on the counter during the past two weeks. In the past one week, the stock of auto ancillary company has surged 17 per cent as against 1 per cent gain in the Sensex.

Jamna Auto Industries manufactures conventional leaf springs, parabolic leaf springs, air suspensions and lift axles, predominantly for commercial vehicles (CVs). With a consolidated annual manufacturing capacity of 3,00,000 MT, the company remains India's largest and the world's third largest CV spring manufacturer.

The volumes of medium and heavy commercial vehicle's (M&HCV's/ truck's), the key end-user segment for the Jamna Auto Group, grew by nearly 49 per cent in FY2022. The Group is expected to see similar growth, going forward, in line with the industry trend, ICRA said in recent rating rationale.

"The ratings continue to favourably factor in the Group's leadership position in the domestic leaf and parabolic spring market as well as its edge over its peers, aided by scale, competitive pricing and strategic proximity to its customers across its manufacturing locations in India. This has helped the Group to maintain a dominant share of business with most CV Original Equipment Manufacturers (OEMs) with its market share ranging within 65-70 per cent," the rating agency said.

Meanwhile, ICICI Securities has initiated coverage 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 intent to diversify its product as well as client mix, we expect 29.6 per cent net sales CAGR for Jamna Auto over FY22-24E. This, coupled with its ability to maintain ~14 per cent margin trajectory amid increasing share of new markets (aftermarket + exports), PAT is seen growing at a CAGR of 40.6 per cent over FY22-24E to Rs 278 crore by FY24E," the brokerage firm said in a stock update.