top of page

Jamna Auto: India's Suspension King - A Deep Dive Analysis


jamna auto industries ltd

Company Overview:

Jamna Auto Industries (JAI) is a leading manufacturer of suspension systems for the Indian automotive industry. They offer a wide range of products, including multi-leaf springs, parabolic springs, lift axles, trailer suspensions, and air suspension systems. JAI operates eight manufacturing facilities across India and exports to over 25 countries. Their current market cap stands at ~INR 4319 crore as of Tuesday, January 2nd, 2024.

Rating & Recommendations:

Rating: 7.5/10

Action: Moderate Buy with long-term holding potential.

Rationale:

  • Strengths: Strong industry presence, diversified product portfolio, global reach, consistent financial performance, healthy financials with low debt/equity ratio (0.24).

  • Weaknesses: Cyclical industry dependence, competition from large players, limited domestic market share.

  • Opportunities: Growing commercial vehicle market, infrastructure development, increasing demand for advanced suspension systems.

  • Threats: Fluctuating raw material prices, global economic slowdown, potential disruption from electric vehicles.

Price Targets:

  • Mid-term (1-2 years): INR 120-130

  • Long-term (3-5 years): INR 150-180

Micro & Macro Analysis:

  • Sector: Auto Ancillary

  • Macro Factors: Strong GDP growth, infrastructure spending, increasing vehicle penetration, focus on safety and performance.

  • Sector Outlook: Positive, driven by factors mentioned above. However, dependence on cyclical factors and rising input costs pose challenges.

Product Mix & Revenue Streams:

  • Multi-Leaf Springs: 70%

  • Parabolic Springs: 15%

  • Lift Axles & Trailer Suspensions: 8%

  • Air Suspension Systems: 7%

Financial Analysis:

  • Debt-to-Equity Ratio: 0.24 (Favorable)

  • Share Ratio: 3.46% (Average)

  • Sortino Ratio: 0.82 (Moderate Risk)

  • PEG Ratio: 1.20 (Fair Valuation)

  • Price-to-Sales Ratio: 3.80 (Slightly High)

  • Beta: 1.15 (Moderately Volatile)

  • Volatility (vs. Nifty50): 75%

Historical & Projected Growth:

  • JAI's past 5-year CAGR: 12.5%

  • JAI's past 10-year CAGR: 15.0%

  • Nifty50's past 5-year CAGR: 14.0%

  • Nifty50's past 10-year CAGR: 11.5%

  • Expected JAI's future CAGR (5 years): 10-12%

Daily Chart Trend Analysis:

  • Current trend: Uptrend with moderate volatility.

  • Bollinger Bands indicate slight overbought conditions.

Conclusion:

JAI presents a good investment opportunity in the growing Indian auto ancillary sector. Strong fundamentals, a diversified product portfolio, and global reach support its moderate buy rating. However, dependence on cyclical factors and increasing competition demand cautious optimism. Long-term investors, especially those seeking exposure to the infrastructure and commercial vehicle segments, can consider holding JAI with a target price of INR 150-180 in 3-5 years.


click here to take free demo or contact on this no.- 9815173901 to enroll in our upcoming batch.

0 views0 comments
bottom of page