Dolat Capital is bullish on JBM Auto has recommended buy rating on the stock with a target price of Rs 390 in its research report dated May 31, 2019.
Dolat Capital's research report on JBM Auto
JBM Auto (JBMA)’s results were better than estimates in 4QFY19 (revenue +8%, PAT+13% YoY), despite challenging environment in the PV segment, due to a strong revival in the bus business and a robust growth in the tooling business. We are positive on the stock based on 1) new order wins in the sheet metal business, from M&M, Tata Motors, and VECV; 2) encouraging revenue potential in the tooling business (high margin +30%), given rising localization and outsourcing of tooling requirements by large global OEMs (cost-benefit of 25% in India); and 3) increasing economies of scale in the bus business, which should aid profitability in the future. We forecast a 23% EPS CAGR over FY19-21E. The stock is currently available at 10/8x for FY20/21E.
We recommend Buy rating on the stock, with a TP ` 390 (15x 21E EPS).
For all recommendations report, click here
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