Recommendation from Automobile & Ancillaries Sector

This section gives a recommendation of a stock having stock price below Rs 150 with sound fundamentals and expected to give handsome returns over a one-year time horizon.[EasyDNNnews:PaidContentStart]

Jamna Auto Industries Ltd : SUSPENSION MARKET LEADER WITH A DIVERSIFICATION EDGE

HERE IS WHY
✓ Dominant Suspension MarketShare
✓ Diversifying Beyond Leaf Springs
✓ Strong Balance Sheet Strength

I ndia’s Medium and Heavy Commercial Vehicle (M&HCV) industry, after contracting 3 per cent in FY25, is poised for revival with single-digit growth expected in FY26. The turnaround, which began in July, gathered momentum in August, aided by higher government spending and a pickup in infrastructure activity. These factors are boosting fleet demand and improving industry sentiment.

The rebound is reflected in OEM sales: Tata Motors, Ashok Leyland, and Eicher Motors posted M&HCV volume growth of 8.9 per cent, 2.6 per cent, and 9.5 per cent respectively in August 2025. For CY2025, production volumes are projected to touch a record ~5,50,000 units, up from 5,02,400 in 2024, with heavy-duty lorries leading growth.

In this backdrop, Jamna Auto Industries Ltd (JAIL), incorporated in 1965, stands out as India’s largest suspension manufacturer for CVs. With an estimated 62–65 per cent share of the domestic leaf spring market, Jamna has entrenched OEM relationships across Tata Motors, Ashok Leyland, VE Commercial Vehicles, and Daimler India. Its dominance extends to the aftermarket through the “JAI” brand, where it continues to expand distribution.

Jamna’s portfolio includes conventional and parabolic leaf springs, lift axles, trailer suspensions, stabiliser bars, and U-bolts. Parabolic springs are a key growth driver, contributing 38.5 per cent of revenue in H1FY25 versus 20 per cent in FY21.

Under its “Lakshya 50XT” vision, management aims to lift new product contribution to 50 per cent of revenue by FY27, with stabiliser bars and U-bolts supporting growth. The company has also diversified into agricultural equipment. This expansion not only broadens revenue streams but also leverages Jamna’s engineering expertise into a high-growth sector.

Aftermarket and exports are scaling rapidly, supported by a dedicated Yamuna Nagar plant and an upgraded Hosur unit. Jamna supplies over 15 countries and plans to expand into 40 more, backed by European distribution pacts and orders from UD Trucks (Volvo subsidiary).

Jamna operates 10 plants near OEM hubs for cost efficiency and timely supply. New Adityapur and Indore facilities, with ₹380–390 crore capex funded internally, will boost highmargin capacity and cut logistics costs. A debt-light balance sheet (0.14x D/E, 70.3x interest cover) highlights financial strength.

Jamna Auto closed FY25 with revenue of ₹2,270 crore, operating profit of ₹303 crore (13 per cent margin), and net profit of ₹180 crore, reflecting steady performance despite cost pressures. In Q1FY26, total income stood at ₹575.34 crore, up 3 per cent YoY but down 10.2 per cent QoQ. Net profit slipped 16.5 per cent QoQ to ₹45.74 crore.

Valuations are reasonable, with the stock trading at 23.7x P/E versus the industry average of 26.6x. Strong return ratios (ROE 19 per cent, ROCE 23.6 per cent), promoter holding of 49.9 per cent, and a 0.93 per cent dividend yield provide additional comfort.

With CV suspension leadership, rising high-margin products, agri diversification, and strong aftermarket and export push, Jamna Auto is well placed to benefit from the CV upcycle. Diversification hedges cyclicality, and with growth visibility, margin levers, and reasonable valuations, we recommend a Buy.

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