HDFC Securities is bullish on JBM Auto has recommended buy rating on the stock with a target price of Rs 560 in its research report dated 07 Aug 2018.
HDFC Securities' research report on JBM Auto
JBMA recorded strong PAT growth(+26% YoY, +40% including amalgamation effect) led by jump in JVs (JBM MA Automotive ltd) profit driven by new business of Jeep compass(Fiat) and Yaris (Toyota). Consolidated Revenue (Standalone+JBMAS) rose 11% to Rs. 4.2bn led by strong growth in tool room division (+225%YoY) marginally offset by muted growth in sheet metal component division (+5% YoY).
We reckon 35% PAT CAGR over FY18-FY20E; fuelled by improving operating leverage, richer product mix and acquisition of new clients. We value stock at Rs. 560 (18x FY20E EPS) and maintain BUY.
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