Jamna Auto Industries

Stock Opportunities Not-so-Hidden Gems
132

Today they have come out with Investor Presentation launchng 5 Yr plan called Lakshya 50XT

They aim to achieve this by FY 26.

I believe their Lakshya 33 is superseded by this.new Plan.
They have scheduled Investor meet with analysts. More clarity may be forthcoming in that.

ec29fed0-f0ac-43a0-b54f-c547c8cc37c6.pdf (bseindia.com)

1 Like
133

ROCE of 50% in a cyclical industry seems quite bold. Lets see how they explain the roadmap on the investor call.

134

Have been holding this for more than 7 years and it’s been one roller-coaster ride! Saw it go from 20 to 100 back to 20 and now to 90. Though a market leader in its field, the management’s strategic vision and ethics could always be questioned.

Even though they have been the primary suppliers of suspension systems to almost all the CV OEMs in India, they could never meaningfully export these products. The OEMs they sell to in India manufacture the same/similar CVs (either directly or through JVs) in other parts of the world as well. Yet to not have any meaningful exports of the same products till now is puzzling.

In their previous vision doc, they were targeting 33% revenue from new markets but never got close to that number. This time they have increased the new market revenue target to 50%, 10% coming from exports and the rest through replacement market. Export target for next 5 years should be achievable considering they already have a relationship with major CV OEMs but they have not been able to take out meaningful share from the replacement market in the last 5 years, not sure what they will do differently in the next 5. Also ROCE of 50 % for an auto ancillary! :heart_eyes:
If JAL achieves even 75% of what they have set their eyes on for the next 5 years, i will be a very happy investor

Disc: 18% of my PF. Invested from lower level

6 Likes
135

what He (CFO of jamna auto) means by “products which are not in public domain” in this video (time stamp:- 04:20)

137

Attended the AGM today, was hoping for some clarity on their new 5 year strategy but the event was a disappointment. Could barely hear the speaker because of tech glitches at their end. I was hoping they would take questions but that didn’t happen either.

Only thing i could gather from the event is their Q4 Capacity Utilisation was a little over 50%. Q4 2021 OPM (as per Screener) is 15%, so we can expect operating leverage to play out when demand picks up.
There was also a comment around revenue potential from current block-Current block has a potential to generate revenues around 3000-3500 Cr

I might have misheard/misunderstood some of their comments as the line wasn’t very clear. Requesting others to share their takeaways from the AGM

P.S.- Does anyone have access to the latest Analyst Call transcript? I had requested the CS for the same but received no response

Disc- Invested from lower levels

2 Likes
138

Quite unprofessional approach in conducting VC AGM. They wasted exact 30 minutes to resolve simple audio glitch, a college pass out trainee would be more serious when asked to present some important information. One old panelist(not sure a board member or not) was eating and chatting personal stuffs without muting his audio video. Overall disappointing experience attending any AGM.

Coming to AGM points, Presenter was just reading answer of 8 question from shareholders given to him. Overall this was entire AGM. Few I noted down and mentioning here.

  1. Capacity utilization for last year was 35%, improved in Q4 which is slightly above 50%
  2. Future rev projection - 3000-3500 crore, depending upon demand
  3. progress of air suspension capex - implemented for trucks(for other segment I missed out to note)
  4. CAGR volume growth - Company will not provide that
  5. 5 year forward capex plan - will be planned out depending upon demand, after spending dividend and tax cash will be utilized for capex, no Debt.
  6. Max project will be brownfield projects.
  7. CV is highly cyclical and company directly linked with CV industry, but CV industry trend looks positive(only answer from Mr Jauhar)
  8. New market capture and new product launch(they already launched 4/5 new products) is company target, Mr Jauhar stressed in to stay as a low leverage debt free company in future
5 Likes
139

Thanks @S_Banerjee . This was my first VC AGM experience and I was quite appalled by their conduct. Even leaving aside the tech issue, there didn’t seem to be an intent to have a proper AGM,they were doing it just for the records. The CS brushed aside questions in the chatbox saying they will be answered privately. Quite sure that’s not going to happen since the chats on Webex go away once the meeting has ended.

The management doesn’t conduct Concalls nor do they reply to individual shareholder queries on mail. AGM is the only platform for retail investors to know the management and get their queries answered. This AGM experience really makes me question Management’s professionalism

1 Like
140

Declared Rs. 0.50 per share Dividend.

image
image1387×660 219 KB

141

Continuous improvement in business numbers,though OCF a bit weak due to increased trade receivables and inventories.
Declared 1 Rs dividend this qtr

Screenshot_20220521-180144~2
Screenshot_20220521-180144~21200×637 82.7 KB

Screenshot_20220521-180057~2
Screenshot_20220521-180057~21200×590 424 KB

2 Likes
142
143

FY 2021-22 Annual Report for Jamna Auto is lot more descriptive as compared to previous Annual Reports. Also, pleased to see very specific details around Lakshya 50XT:

Lakshya #1: 50% revenue from New Products by 2026: Actual is 37% till FY22

  • Parabolic share in the overall spring market is increasing. There has been a steady increase over the last 6 to 7 years, but it has further accelerated with the introduction of BS6 vehicles.
  • JAI has planned to increase parabolic capacity in the existing spring plants covering all the regions of the country. The new manufacturing lines at our Yamuna Nagar plant have already been commissioned, and parts are under production. Expansion in other plants will be completed by FY23.
  • A new parabolic plant will be built in Adityapur, close to Jamshedpur OEMs. We expect the commercial production to commence by June 2024. This capacity enhancement will not only help us to secure a majority share of the OEM market, but will also increase our parabolic sales in the aftermarket.
  • Mahindra & Mahindra Agriculture Implement Division has accorded us a contract to supply rotavator blades. The components are under development at Yamuna Nagar plant and supplies are expected to begin by January 2023
  • The commissioning of a new factory under wholly owned subsidiary i.e. Jai Automotive Components Limited in Derabassi, Punjab to manufacture fabricated parts is in progress. The
    commercial production is expected to start by July 2023.
  • The construction of a new factory in Indore to manufacture U bolts, Hanger Shackles, and Spring Pins has started. Commercial production is expected to begin by January 2024 expanding the product range and content per vehicle in the CV industry.
  • The first phase of investment in machining set up in Uttarakhand has been completed, and production will begin by January 2023. This will increase our product range and content
    per vehicle in the CV industry.
  • Launched new products in the After Market India such as clutches, bearings, and brake linings.

Lakshya #2: 50% Revenue from new Markets by FY26: Actual is 23% till FY’22

  • This year we have got 23% of the revenue from aftermarket and exports.
  • We continue to build a strong foundation in the aftermarket by selling directly to retail, establishing an efficient supply chain and widening our network to cover every nook and corner of India. Retail model will help us to eliminate inefficiencies in the whole value chain, which will help us to make products cheaper to the end customer.
  • Allied products sales in after market has started to pick up. This year our allied products sale was 4% of the total after market sales.The brand is now fully recognized in the after market domain.
  • This year, JAI has launched high consumption parts like clutches, bearings, and brake linings, which have huge potential in the aftermarket. We plan to sell this by leveraging our existing aftermarket network.
  • We are opening “JAI Shoppe” in Transport Nagar’s major trucking centre to showcase and enhance our product branding to get closer to the fleet owners for direct selling. The pilot Shoppe in Delhi will be inaugurated by December 2022.
  • We had our first success in increasing after-market export tonnage in the European region. e will continue to focus on after market exports.

Lakshya #3: 50% ROCE by FY26: Actual is 26%

  • We have achieved 26% ROCE (33% Net of Bill Discounting) against target of 50% to be achieved by FY 26.

Lakshya #4: 50% Divident pay-out:

  • total dividend payout of INR 1.50 per shares for FY 2021-22 and amounts to 42.5% of Profit after Tax.

Misc:

  • “ICRA Limited (“ICRA”) has reviewed the credit rating of the Company and at present, the Company’s long term credit rating is [ICRA]AA- (pronounced ICRA double A minus) and short term rating as [ICRA] A1+ (pronounced ICRA A one plus). The credit rating assigned to Commercial Paper (CP) reaffirmed at [ICRA] A1+ (pronounced as ICRA A one plus).”
  • Our strategic collaboration with Ramco Systems presents us with new digital competencies and thus digitises all of our after-market services, such as management reviews, data analysis, performance management, among others.
  • Our certification from IATF 16949 (highest quality management system standards for the automotive sector) further attest to our quality centric approach
  • CV market witnessed a broad-based recovery, recording 29% growth in FY 2021-22 compared to FY 2020-21.

Disc: Invested from lower levels. Transactions in last 60 days.

10 Likes
144

On June 20, 2023, there was a bulk deal in Jamna Auto Industries Ltd. (JAMNAAUTO) shares on the NSE. A total of 5,905,682 shares were traded at an average price of Rs 96.15. The seller in this deal was SMALLCAP WORLD FUND INC, while the buyer was not disclosed.

The total value of the deal was Rs 561.46 crore. This is the largest bulk deal in JAMNAAUTO shares in the past 1 year.

On same day they bought HDFC Asset Management company. So reason for this bulk deal is to raise fund for this investment.

145

Company is out of favor by investor …however… hope it will give good return due to recovery in commercial vehicles sales, after sales and new product lines.

Dec 2021 - EPS 3.11 and now EPS 4.75 (50% rise) but stock price remain same at Dec 2021 level !

Buy when others are ignoring, provided company is keep continuing doing good on bottom line, operation leverage and reasonable debt …and cost effective operation
Disc - Invested and keep adding

1 Like
146

CV growth is visible…going forward it will be better