Jai bharat maruti

Jai bharat maruti latest pick by chokka sir
Garners ~90% of revenue from Maruti Suzuki

JBML manufactures sheet metal components, axles, Body in white, exhaust systems and chassis & suspension parts

among others. The company derives ~90% of revenue from Maruti Suzuki. It supplies for all the models to

Maruti & total requirement of the parts that are manufactured by JBML for Maruti are met by JBML only.

The company will also be supplying for Maruti's new LCV, Carry. Going forward, with Maruti’s focus of

penetrating into segments like mid-sized Sedans, UVs & LCVs, the volume of materials being supplied by

JBML will increase, thereby aiding higher volume growth for JBML;

Maruti’s volumes between FY2015-FY2017 are expected to grow on back of decent launch pipeline,

expanding audience base (focus on UVs, Mid-size sedan & LCVs) & its ability to launch technologically

advanced product at affordable price points. In the long term, Maruti aims to increase the model count to 25

from the current 14 to bump up its annual sales to 3 million per annum;

Robust growth outlook for Maruti Suzuki ensures similar growth story for JBML as its fortune is entirely

dependent on Maruti. JBML's revenue growth will be led by higher volume growth for Maruti whereas

profitability and return ratios are likely to bump up on the back of higher utilization. At the current market price of

Rs.142 the stock trades at an attractive PE of 7.0x its FY2016E EPS of Rs.20.3 and at 6.1x its FY2017E EPS of

Rs.23.3. Hence, we initiate a BUY on the stock with a target price of Rs.230/ with a time horizon of about 2

years as we believe that the benefits from the increase in its capacity and thereby expansion in its PE

multiple would take anywhere from 1 to 2 years.

 

Thanks. Looks good. You have link for pdf copy?