Biggest player in Sheet metal 40% market share (ROCE 16%) next is Omax (ROCE 3%)
Current 11.5x FY15 at cmp of 225 After dilution 14x FY15
JBM AUTO, a public limited company, was incorporated in 1990 mainly to manufacture tools, dies and moulds for the automobile industry, from its Faridabad facility. Subsequently in 1993, the company entered the sheet metal components manufacturing business for OEMs (original equipment manufacturers) other than Maruti Suzuki India Limited to benefit from the growing demand from the automotive sector. Further in 2006, JBM Auto started its Special Purpose Vehicle division engaged in the fabrication and assembly of bodies of heavy vehicles. JBM Auto is part of the JBM Group of companies, and the other major auto component manufacturing companies of the group are Jay Bharat Maruti Limited and Neel Metals Products Limited.
JBM AUTO operates in three segments: Sheet Metal Division (for manufacturing sheet metal components, assemblies, sub-assemblies), Tool Room Division (for manufacturing tools, dies and moulds) and Special Purpose Vehicle (SPV) division (for development and assembly of SPV).
Thus far, Indian part makers were given the product designs by OEMs and manufactured the parts based on specifications given to them. Now JBM is building competencies in chassis and suspension, designing complete cabs for CVs, new exhaust systems and other customer solutions.
JBM has also kicked off partial production of complete cabs for the new trucks from VE Commercial Vehicles(Volvo-Eicher motor JV). JBM Auto’s in-house R&D, based in Delhi NCR, works in sync with its global R&D centres in Italy and Germany-owned by JBM subsidiaries. JBM is involved in the design of all vehicle types right from concept stage including packaging and engineering and is working on projects with Volvo, Fiat, Mahindra & Mahindra, Volkswagen AG, Ashok Leyland, Tata Motors and other OEMs. It also provides engineering services to Mercedes-Benz/Daimler, Lamborghini and McLaren.
- Growing at healthy ROE and ROIC and Bus business similar margins
- Slowly moved from pure PV to 1/3rd now CV, two wheelers, farm equipment last 4 years
- 25% CAGR minimum target for next 3 years Capacity at 75% 2 shift sometimes moves to 3 shifts and thus EBITDA increases and new plant required
- PAT Margins increased from 3% to 5% this year target 6% (Q3 6% due to better utilization)
- USP of business - one shop integrated solution across industry and geography 60% same 40% customized market share of 60-70% of current customers cater 7-8 states in next few years
- Buses revenue sharing based on performance/warranty and institutional premier sellers target like premier schools, Airport
- JBM Auto products are widely used in two-wheelers, cars, tractors and trucks, white goods industries and other sectors in India and overseas. The company’s manufacturing facilities and tool rooms are strategically located in close proximity of leading automobile hubs of India at Faridabad, Greater Noida, Nashik, Chennai, Sanand and Pune for catering to diversified clients.
- JBM has also installed new facilities for manufacturing of passenger buses and other allied products at its manufacturing units situated at Ballabgarh (Faridabad) and Kosi Kalan (Mathura).
- Value based selling rather than cost based selling starting from designing to tool section to painting of products and now with R&D and testing higher value and reliability so better margins
- Out of 2000 crore revenue (1 crore bus * 2000) 40-50% this year only 200 order as of now
- Initially 500 cr debt for 4000 cr turnover was supposed to be from internal accrual and debt from JBM but now QIP possible for upto 250 cr
- lower numbers standalone as more holidays although compared to YOY it should be similar
per working day higher
- New programs Offtake only at end revenue not a/c but profit a/c as per auditor
- Tool room division high margin earnings cyclical not sure why was it one off
QIP in range of 250 cr for a 1000 cr turnover company