JBM AUTO “Manufacturers of Superior Products for Automobile Industry”

JBM Auto founded in 1986 is a dynamic organization providing value-added products, services and innovative solutions to its customers. It is engaged in the business of manufacturing of sheet metal components, welded assemblies, exhaust systems, fuel fillers (fuel pipe), and chassis and suspension parts, components for automobiles. The company also provides engineering & design services and is also present in renewable energy and education sectors. It has three main segments viz, Sheet Metal Division, Tool Room Division and buses. The company is primarily a tier-1 supplier to OEM in the automotive industry

JBM Auto is one of the Multibagger stocks, identified by Dynamic Levels Research based on technical and fundamental research.

JBM Auto share price has touched the 52 week high value of Rs. 234.20 on 10-Dec-2015 and its 52 week low value is seen at Rs. 103.10 on 12 -Feb -2016, and is currently trading at Rs. 220.

Share Holding

The promoters holding in the company stood at 61.97% while Institutions and Non-Institutions hold 3.04% and 34.99% respectively.

Financial Analysis Quarterly Results

During the quarter ended 30th June 2016, the total income from operations of JBM Auto reported a growth of 22.22 % on the Q-o-Q basis and stood at Rs. 175.58 crore against Rs. 143.65 crore in the quarter ended 31st March 2016.

The operating profit of JBM Auto for the quarter ended 30th June 2016 stood at Rs. 10.46 crore against Rs. 8.13 crore in the quarter ended 31st March 2016, growing by 28.65%.

PAT increased by 101% and stood at Rs. 13.61 crore for the quarter ended 30th June 2016 against Rs. 6.77 crore in the quarter ended 31st March 2016.

EPS grew by 100% and stood at Rs. 3.23 for Q1FY17 against Rs. 1.61 for Q4FY16

Annual Result Analysis:

The net sales of JBM Auto for FY16 stood at Rs. 1379.49 crore compared to Rs. 1382.80 crore in FY15, marginal de-growth of 0.23%

The operating profit stood at Rs. 131.19 crore in FY16 against Rs.151.18 crore in FY15, de-growth of 13%

PAT stood at Rs. 62.94 crore in FY16 against Rs. 92.64 crore in FY15. PAT for the year was down by 32%

EPS also came down by 32% and stood at Rs. 12.39 for FY16 against Rs. 18.25 for FY15

Investment Rationale

• JBM Auto supplies its products to esteemed clients like Ashok Leyland, Bajaj Auto, Fiat, Ford, Maruti, Volkswagen to name a few.
• The company launched its bus division during 2015 at Delhi Auto Expo for intra-city travel called "CITYLIFE."
• JBM Auto has inaugurated a new plant at Sanand, Gujarat for catering to FORD models with an outlay of Rs 2000 Mn which will serve approx 2.5 lakh vehicles per annum.
• Higher Budget Allocation on Road and Highways Development will benefit the automobile sector and JBM Auto will be a beneficiary.
• Bharat Stage IV emission norms which are expected to be effective from April 2017 will help in the business growth of JBM Auto.
• The company has plans to roll out low floor buses meant for city travel which will help in boosting the revenue of JBM Auto
• The company has launched electric bus variants called ECOLIFE during auto expo 2016
• JBM Auto is a strategic partner for Maruti Suzuki and supplies many high quality parts for its various brands

Investment Opinion

At CMP Rs. 220 JBM Auto share price is trading at a P/E of 16.76 and JBM Auto has a market cap of Rs. 897.50 crore, we recommend a buy on the stock with a price target of Rs. 260 for a short term outlook.

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