Jamna Auto Industries Ltd. share price target

Proxy to the MHCV cycle, Jamna to participate in the up move MHCV cycle has turned positive since Q2 FY18 and has grown at 19% for Q4 FY18, which has driven sales for Jamna. Also the higher tonnage industry has grown at 26%, higher than the overall MHCV industry. Jamna having a 72% OEM market share and being a significant vendor...

Jamna Auto Industries (JAI) is the market leader in domestic leaf spring market with a share of ~65%. During Q4FY18, JAI observed an impressive 56% yoy growth in topline.

We value the stock at Rs 107 (20xFY20E) and recommend a BUY. Jamna Auto (JAMNA) posted strong numbers for 4Q. Revenue came at Rs 5.96bn (+56% YoY), driven by robust demand for high tonnage trucks along with increased volume in Lift Axle and Parabolic Spring. EBIDTA jumped 50% YoY to Rs 894mn with improved margin at 15% (+192bps QoQ) benefited from richer product mix and higher oplev. APAT stood at Rs 467mn (+34% YoY).

Jamna Auto Industries (JAI) observed an impressive 55% yoy growth in topline during Q3FY18. For 9 month period (i.e. Apr Dec 2017) JAI's topline has grown by ~24% yoy. Healthy recovery i.e....

Maintain BUY with TP of Rs90 (based on 20xFY20E) Jamna Auto(JMNA) posted strong numbers for 3Q. Revenue stood at Rs 4.7bn (+55% YoY), led by traction in higher tonnage vehicles along with increased volume in Lift Axle and Parabolic Spring. EBIDTA came in at Rs615mn (+47% YoY) and EBIDTA margin stood at 13%(-65bps YoY, below estimate), impacted by lower replacement/sales ratio and product development expenditure. APAT stood at Rs317mn (+50% YoY).

Jamna Auto reported robust revenue growth in Q3FY18 led by strong demand for commercial vehicles (volumes up 28% yoy). Net revenue and Net profit increased by 54.9% and 50.1% yoy respectively. We expect demand for Commercial vehicles to remain healthy in FY19E, given bright outlook for the Indian economy and rising infrastructure spending.

Given superior return ratios, ROE (~30%) and phenomenal growth, JMNA will continue to trade at a premium vs its historical multiple (15x). We increase FY18/19E EPS by 2/5%, and increase TP to Rs 81 (based on 20xSept-19) vs Rs 70 earlier Jamna Autos (JMNA) 2Q revenue stood at Rs 3.8bn (+41% YoY), led by traction in higher tonnage vehicles. EBIDTA came in at Rs 503mn (+27% YoY, 9% above estimates), and EBIDTA margin at 13% (-144bps YoY, below estimates, dragged down by lower replacement sales). APAT stood at Rs 295mn (+36% YoY).

Jamna Auto Industries (JAI) observed an impressive 41% yoy growth in topline during Q2FY18. The significance of this growth becomes larger following sharp slump of 19% witnessed in topline in Q1FY18.

Jamna Auto reported better than estimated Q2FY18 result led by strong growth in CV volumes, after slowdown seen in Q1FY18 due to change in emission norms. Total income and Net profit increased by 40.8% and 36.1% respectively on yoy basis. We expect demand for MHCVs to remain healthy in H2FY18, given bright outlook for the Indian economy and rising infrastructure spending.

Partly reflecting the tepidness in Indian CV industry in Q1(9.1%), particularly in M&HCV; segment (-31.8%), primarily CV industry reliant Jamna Auto posted 18.5% drop in income from operations, one of the weakest showings in several quarters. Poor revenue booking also stoked operating profits, which nosedived by 47% y-o-y. OPMs as a consequence declined to the lowest in eight quarters at 11.2% compared to 17.3% in the same quarter a year ago. Raw material to sales ratio rose 150 bps to 60.8% from 59.3% in the year ago period....