Jamna Auto Industries

FY 2021-22 Annual Report for Jamna Auto is lot more descriptive as compared to previous Annual Reports. Also, pleased to see very specific details around Lakshya 50XT:

Lakshya #1: 50% revenue from New Products by 2026: Actual is 37% till FY22

• Parabolic share in the overall spring market is increasing. There has been a steady increase over the last 6 to 7 years, but it has further accelerated with the introduction of BS6 vehicles.
• JAI has planned to increase parabolic capacity in the existing spring plants covering all the regions of the country. The new manufacturing lines at our Yamuna Nagar plant have already been commissioned, and parts are under production. Expansion in other plants will be completed by FY23.
• A new parabolic plant will be built in Adityapur, close to Jamshedpur OEMs. We expect the commercial production to commence by June 2024. This capacity enhancement will not only help us to secure a majority share of the OEM market, but will also increase our parabolic sales in the aftermarket.
• Mahindra & Mahindra Agriculture Implement Division has accorded us a contract to supply rotavator blades. The components are under development at Yamuna Nagar plant and supplies are expected to begin by January 2023
• The commissioning of a new factory under wholly owned subsidiary i.e. Jai Automotive Components Limited in Derabassi, Punjab to manufacture fabricated parts is in progress. The
  commercial production is expected to start by July 2023.
• The construction of a new factory in Indore to manufacture U bolts, Hanger Shackles, and Spring Pins has started. Commercial production is expected to begin by January 2024 expanding the product range and content per vehicle in the CV industry.
• The first phase of investment in machining set up in Uttarakhand has been completed, and production will begin by January 2023. This will increase our product range and content
  per vehicle in the CV industry.
• Launched new products in the After Market India such as clutches, bearings, and brake linings.

Lakshya #2: 50% Revenue from new Markets by FY26: Actual is 23% till FY’22

• This year we have got 23% of the revenue from aftermarket and exports.
• We continue to build a strong foundation in the aftermarket by selling directly to retail, establishing an efficient supply chain and widening our network to cover every nook and corner of India. Retail model will help us to eliminate inefficiencies in the whole value chain, which will help us to make products cheaper to the end customer.
• Allied products sales in after market has started to pick up. This year our allied products sale was 4% of the total after market sales.The brand is now fully recognized in the after market domain.
• This year, JAI has launched high consumption parts like clutches, bearings, and brake linings, which have huge potential in the aftermarket. We plan to sell this by leveraging our existing aftermarket network.
• We are opening “JAI Shoppe” in Transport Nagar’s major trucking centre to showcase and enhance our product branding to get closer to the fleet owners for direct selling. The pilot Shoppe in Delhi will be inaugurated by December 2022.
• We had our first success in increasing after-market export tonnage in the European region. e will continue to focus on after market exports.

Lakshya #3: 50% ROCE by FY26: Actual is 26%

• We have achieved 26% ROCE (33% Net of Bill Discounting) against target of 50% to be achieved by FY 26.

Lakshya #4: 50% Divident pay-out:

• total dividend payout of INR 1.50 per shares for FY 2021-22 and amounts to 42.5% of Profit after Tax.

Misc:

• “ICRA Limited (“ICRA”) has reviewed the credit rating of the Company and at present, the Company’s long term credit rating is [ICRA]AA- (pronounced ICRA double A minus) and short term rating as [ICRA] A1+ (pronounced ICRA A one plus). The credit rating assigned to Commercial Paper (CP) reaffirmed at [ICRA] A1+ (pronounced as ICRA A one plus).”
• Our strategic collaboration with Ramco Systems presents us with new digital competencies and thus digitises all of our after-market services, such as management reviews, data analysis, performance management, among others.
• Our certification from IATF 16949 (highest quality management system standards for the automotive sector) further attest to our quality centric approach
• CV market witnessed a broad-based recovery, recording 29% growth in FY 2021-22 compared to FY 2020-21.

Disc: Invested from lower levels. Transactions in last 60 days.