Jamna Auto is the second largest player globally and market leader in India for leaf springs used in commercial vehicles. It has a 73 percent market share. It is a key vendor to large original equipment manufacturers like Ashok Leyland, Tata Motors, M&M and Daimler.
The structural shift towards higher tonnage vehicles should trigger demand for its high margin parabolic springs. Superior return on equity, deleveraged balance sheet and minimum capex plans makes it a proxy to play the infrastructure theme in India.
We have a buy on Jamna Auto with a target of Rs 105 per share.
Disclaimer: The author is Head of Research at LKP Securities. The views and investment tips expressed by investment experts 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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