Jamna Auto Q4 Review – Ideal Play On CV Upcycle: Nirmal Bang

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Jamna Auto Industries Ltd.’s results beat our estimates. The company’s Q4 FY22 revenue stood at Rs 6,259 million, up 40.7%/29.2% QoQ/YoY, largely ahead of industry growth of ~30% QoQ and beat our estimate of Rs 5,124 million mainly because of higher realisation and a favorable mix.

Raw material cost inflation continued to hurt, resulting in the gross margin declining by ~310 bps QoQ to 31.8%, indicating the lag in raw material cost passthrough.

Jamna Auto reported Ebitda margin of 13.9% (up 30 bps versus our estimate), up ~50 bps QoQ, largely driven by operating leverage.

Reported Ebitda at Rs 869 million increased by 45.5% QoQ and was 25% ahead of our estimate, mainly due to higher-than-expected revenue.

Jamna Auto continues to maintain a dominant market share in the original equipment manufacturers segment (68% in FY22).

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