Shares of auto ancillary firms are experiencing a strong bull in the current year so far, which is mostly being backed by declining raw material costs, robust order wins from OEMs, and the strong performance in the recent March quarter. Brokerages are also continuing to have a favourable outlook on the sector.
One notable performer in the auto ancillary space is JBM Auto, whose shares have experienced a remarkable surge, delivering an outstanding 86% return year-to-date. The stock has consistently maintained an upward trajectory over the past nine months, including the current month, resulting in a multibagger return of 157%.
The scrip surged by 7.63% during intraday trade on Tuesday, reaching a new all-time high of ₹992. This impressive performance underscores the favorable outlook for the auto ancillary space and the positive sentiment surrounding JBM Auto.
Looking at the long-term performance, JBM Auto stood out as a strong performer, generating stellar returns over the past five years. During this period, the stock has appreciated from ₹135 per share to its current market price of ₹983, representing a remarkable gain of 628%.
In addition, over the last decade, it has delivered an astounding return of 22,760%. For instance, an investment of ₹1 lakh made ten years ago would now be valued at ₹2 crore, 22 lakhs.
JBM Auto is engaged in the automotive business that manufactures and sells sheet metal components, tools, dies and moulds, and buses, including the sale of spare parts, accessories, and maintenance contract of buses.
Earlier in January, JBM Auto launched its first self-designed and self-manufactured electric luxury coach called 'Galaxy' at the Auto Expo 2023 and also showcased its new series of e-buses including city buses as well as school buses.
In terms of financials, the company reported a consolidated net profit of ₹28 crore for the March-ending quarter, as compared to a net profit of ₹86 crore in the year-ago quarter, ending FY23 with a total net profit of ₹125 crore, a drop of 19.87% over FY22's net profit of ₹156 crore.
The revenue from operations fell to ₹1,010 crore, a drop of 5.7% YoY from ₹1,072 crore in Q4FY22. This was due to slower ramp up in bus division as few clients postponed delivery schedule to Q1/Q2 FY24, according to analysts.
The revenue from its bus division showed a significant quarter-on-quarter (QoQ) growth of 121%, reaching ₹222 crore. On the other hand, the tool room division remained flat at ₹82.8 crore, However, the component division experienced a decline of 8% QoQ, resulting in a revenue of ₹709 crore.
Following the Q4 performance, brokerage firm Dolat Capital remained positive on JBM Auto. The brokerage highlighted the company's success in securing new business in the component segment, the promising revenue potential in the high-margin tooling business (with a margin of +25%), and the expected economies of scale in the bus division.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.
