Buy Jamna Auto Industries; target of Rs 135: ICICI Direct

ICICI Direct's research report on Jamna Auto Industries

Jamna Auto Industries (JAI) is a manufacturer of suspension products (leaf & parabolic) for commercial vehicles (largely M&HCV space). It was established in 1965. JAI has eight manufacturing plants in India, each in close proximity to CV OEMs, with installed capacity of ~3,00,000 metric tonnes. FY22 sales product mix: OEMs: 63%; new market: 37% • FY22 sales market mix: OEM:77%; new market (aftermarket + exports): 23%.

Outlook

We retain BUY on JAI amid cyclical recovery in its key target segment (M&HCV space), benign commodity price outlook & high return ratios matrix. Revising our forward estimates, we now value JAI at Rs 135 i.e. 25x P/E (~1x PEG) on FY24E EPS of Rs 5.5/share (earlier target price: Rs 155).

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