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Stock of this auto ancillary company has zoomed over 60% so far in June

Shares of Jay Bharat Maruti hit a fresh 52-week high of Rs 269.25, as they rallied 4% on the BSE in Tuesday's intra-day trade in an otherwise a weak market.

Sensex, Nifty, stock brokers

SI Reporter Mumbai

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Shares of Jay Bharat Maruti (JBML) hit a fresh 52-week high of Rs 269.25, as they rallied 4 per cent on the BSE in Tuesday’s intra-day trade in an otherwise weak market. In past three days, the stock has rallied 16 per cent. In comparison, the S&P BSE Sensex was down 0.50 per cent at 62,865 at 10:25 AM.

Thus far in the month of June, the stock of auto components & equipments company has zoomed 62 per cent, as compared to less than 1 per cent rise in the S&P BSE Sensex.

JBML is a joint venture (JV) between JBM Group and Maruti Suzuki India (MSIL). The company is engaged in the manufacturing of key auto systems such as chassis & suspension systems, exhaust systems, welded assemblies, tools & dies, etc. for India’s largest car maker, MSIL.

JBM Group has a diversified portfolio in the field of automotive, buses & electric vehicles, EV charging Infra, engineering & design services and renewables, with an infrastructure of 60 manufacturing plants and 5 engineering & design centers in over 37 countries.

With respect to increase in volume JBML clarified that the company is not aware of any information that led to the movement in the volume/price of the shares of the company.

Last month, JBML had announced that the company will invest Rs 300-350 crore approximately in 2 new manufacturing plants in Haryana and Gujarat in a phased manner.

It will be setting up 2 new manufacturing plants to cater to the requirements of its key customer Maruti Suzuki in both the regions. These plants will be commissioned at Kharkhoda, Sonipat in Haryana and SMG Suppliers’ Park in Gujarat.

The new plant at Kharkhoda, Sonipat in Haryana will provide capacity enhancement so as to meet the requirements of Maruti Suzuki’s new manufacturing plant at IMT Kharkhoda, which is expected to be commissioned by FY2025. JBML will also be setting up an assembly facility in the new Gujarat facility for supplying auto assemblies, the company said.

Meanwhile, the rating agency ICRA expects the credit profile of JBML to remain stable with steady growth in revenues and earnings, backed by its well-established position as one of the key suppliers of sheet metal components to MSIL, the market leader in the domestic passenger vehicle (PV) segment.

Over the years, JBML has emerged as a key supplier of sheet metal-based body-in-white (BIW) components, rear axle assemblies and fuel necks to the original equipment manufacturer (OEM) for almost its entire model range.

Despite high competition among sheet metal component manufacturers, JBML benefits from its cost-competitive manufacturing capabilities, steady investments in setting up capacities as well as its extensive track record and favourable ownership structure, with MSIL holding a 29.3 per cent stake as a JV partner in the company, ICRA said in rationale.

Nevertheless, the margin is expected to improve gradually, going forward, aided by the company’s cost-control measures and benefits of operating leverage. Going forward, JBML’s performance is expected to largely remain linked to that of its key customer, MSIL, the rating agency said.

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First Published: Jun 20 2023 | 10:58 AM IST

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