Newly listed automation stk at 10% upper circuit; up 110% over issue price

Shares of Jyoti CNC Automation were locked in the 10 per cent upper circuit on BSE at Rs 693.70 in Friday's trade on a healthy business outlook.

The stock of the industrial products company was trading at its highest level since its market debut on January 16, 2024. With today’s rally, the market price of Jyoti CNC Automation has more-than-doubled or zoomed 110 per cent from its issue price of Rs 331 per share.

The company had a strong order book position of Rs 3,242 crore at the end of December quarter (Q3FY24).

For Q3FY24, the company reported net profit of Rs 48.04 crore against a net loss of Rs 25.08 crore in the year-ago period. Revenue from operations grew 58.2 per cent year-on-year to Rs 377.92 crore from Rs 238.84 crore in Q3FY23.

The management said that demand continues to be strong in Automobile, General Engineering, Die Mould, Infrastructure and Railway segments. The capacity and delivery related challenges continue to guide the company’s new order bookings, it added.

Jyoti CNC Automation is a leading manufacturer of metal cutting computer numerical control (CNC) machines.

Government campaigns such as ‘Make in India’, ‘Aatma Nirbhar Bharat’ and PLI schemes on various industries are generating good business for domestic manufacturers. This trend is expected to continue and the domestic production will increase in a big way in the next 3-5 years, according to analysts at Reliance Securities.

The market for global CNC machines is driven by increased embracing of automation and advanced software solutions by key industries such as automotive and heavy industries to meet their customer needs apart from lack of skilled labor at competitive costs, which is expected to grow at a CAGR of 10.3 per cent from 2023-2027.

Jyoti CNC Automation intends to capitalize on its expertise in producing CNC machining centers of up to 5-Axis and poised to take advantage of the growth in 4-6 axis machining centers globally and in India, as per analysts. 

With improved market share, growing industry demand, diversified presence, augmenting capacities at regular intervals and improving financial risk profile by repaying certain debt and a strong order book augurs well for the company, they add.