Shares of JBM Auto have offered bumper returns to investors in the last 10 years. The shares have risen 9962% over the decade. Accordingly, if an investor had invested Rs 10,000 in the stock 10 years ago and stayed put, the investment would have swelled to Rs nearly 10 lakh, according to an analysis by ET Markets.
In the last 3 years, the stock has surged 1192% and gave returns of 270% in the last five years.
JBM Group, a smallcap company with a market capitalisation of about Rs 11,619 crore, manufactures automotive products and sub-systems. The company offers air tank, chassis and suspension parts, cross car beam, exhaust systems, fuel tanks, heat shields among other products.
It has an EPS of 10.28 on a trailing twelve month (TTM) basis and the stock is currently trading at a PE of 95.55.
According to the latest shareholding pattern available with the exchanges, promoters own majority of the stake at 67.52%, while the rest of 32.47% lies with the public shareholders.
Among the public shareholders, mutual funds have no major stake, while foreign investors have a marginal 1.67%. Retail investors have a combined holding of 9.36% in the company.
JBM Auto has seen its sales grow manifold from just Rs 1364 crore in FY13 to Rs 3857 crore in FY23. Meanwhile, profit after tax (PAT) too surged from just Rs 57 crore to nearly Rs 124 crore in the same period.For the quarter ended March 2023, the company’s revenues fell 8% YoY, to Rs 964 crore as compared to Rs 1,055 crore in Q4FY22. PAT for the same period stood at Rs 26.81 crore.
Technical outlook – What should traders do?
Despite a strong run in the past one year, analysts see more steam left in the stock and advise investors to use any downside as buying opportunities.
“The stock has given a strong break out above Rs 850 and it can touch Rs 1,200. The 21 DEMA lies near Rs 870 and hence investors are advised to keep a stop loss of Rs 870 on the closing basis,” said Vaibhav Kaushik, research analyst, GCL Broking
“On the higher side, Rs 1000 is acting as an important psychological level, above which, we can expect a level of Rs 1100+ in the near-short term, while on the lower side, Rs 900 will act as a major support during any correction,” said Pravesh Gour, Senior Technical Analyst, Swastika Investmart.
“A favourable buy range lies between Rs 880 and 850, providing an advantageous entry point for investors. The projected target stands at 1100, showcasing substantial growth potential. To manage risk effectively, a stop-loss level of 810 can be implemented,” said Ratnesh Goyal, Sr Technical Analyst at Arihant Capital.
With data inputs from Ritesh Presswala
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)