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Nov 09, 2017 11:19 AM IST | Source: Moneycontrol.com

Hold Jamna Auto Industries; target of Rs 70: CD Equisearch

CD Equisearch recommended hold rating on Jamna Auto Industries with a target price of Rs 70 in its research report dated October 30, 2017.

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CD Equisearch's research report on Jamna Auto Industries


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.


Outlook


On back of infrastructural investments, Indian M&HCV industry has only recently reflected strength. But current stock valuation barely leaves room for error for unexpected changes / shifts in industrial demand. So the stock merits a hold rating with price target of Rs 70 (previous target: Rs 55) based on 21xFY19 earnings (peg ratio: 1.5; high PEG ratio justified on recovery phase of M&CV cycle) over a period of 6-9 months.


For all recommendations report, click here


Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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