Jay Bharat Maruti: Q1 PAT rises 32.7%

Jay Bharat Maruti Q1FY2019 Results

Jay Bharat Maruti Ltd.’s Q1FY19 net sales grew 16.4% YoY to ₹505.9 crores and EBITDA grew 47% YoY to ₹42.5 crores. EBIDTA margin expanded by 174.9 bps YoY to 8.4%. PAT for the company grew by 32.7% YoY to ₹13.4 crores. PAT margin expanded by 32.6 bps YoY to 2.7%.

JayBharatMaruti

What’s good about the company?

  • Jay Bharat Maruti Limited (JBML), in collaboration with Maruti Suzuki India Limited (MSIL), has advanced production lines to develop and manufacture key auto components and assemblies such as BIW parts, exhaust systems, fuel fillers (fuel pipe), suspension parts for passenger cars.
  • The company maintains a short working capital cycle of 10 days.
  • Over the last three years, ROE generated through operations has been in the range of 17-20%.

Challenges faced by the company

  • Indian car manufacturers are being increasingly challenged by modularization and the fact that different user groups prefer vehicles matching their specific needs creates the challenge of managing diverse product lines. Thus, increased product complexity becomes apparent, which also disallows the reusing of certain components in different models.
  • The rising environmental concerns will lead to faster Electronic Vehicles adoption, leading to a disruption in Jay Bharat Maruti’s business of exhaust systems and fuel fillers.
  • 33% of India’s fossil fuel consumption is being used for transportation and rising fuel prices in India can be a deterrent for the rising vehicles’ sales

How does it fare against peers?

JayBharatMarutiROCEPEG

As compared to its immediate peers Jay Bharat Maruti Ltd. has a ROCE of 17.5% and a PEG ratio of 0.76.

Jay Bharat Maruti Ltd. (CMP: Rs. 446.9, Market Cap: Rs. 967.5 Crores, FY2020 P/E: 12.8)

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