Stock Investment Tips: Investors have got bumper returns in the last 10 years in the shares of small cap company JBM Auto. If only 10 thousand rupees had been invested in this share 10 years ago, then today its value would have increased to 10 lakh rupees. This stock has proved to be a multibagger and has turned long term investors into millionaires. JBM Auto shares have gained 9962 per cent in the last one decade. If we look at the performance of the last three years, then this stock has maintained its color and has given a return of 1192 percent. Whereas within the last five years, the price of this share has increased by 627 percent.
Operation of JBM Auto
JBM Group is a Small Cap company with a market capitalization of approximately 11,619 Crores. The company is involved in the manufacturing of automotive products and subsystems. The company manufactures products including air tanks, chassis and suspension parts, cross car beams, exhaust systems, fuel tanks, heat shields. The stock has an EPS of 10.28 on trailing 12 months basis and currently trading at a PE of 95.55.
As per the latest shareholding pattern on the stock exchange, its promoters hold 67.52 per cent stake in the company while the remaining 32.47 per cent is held by public shareholders. Mutual funds do not have a significant stake in this share among public shareholders, while foreign investors have a stake of 1.67 per cent. Retail investors hold a combined 9.36 per cent stake in the company.
Increase Profits and Sales
The sale of JBM Auto was only Rs 1364 crore in FY 2013 which has increased to Rs 3857 crore in FY 2023. While its net profit after tax has increased from Rs 57 crore to Rs 124 crore. The company’s revenue fell 8 per cent year-on-year to Rs 964 crore in the quarter ended March 2033, from Rs 1,055 crore in the fourth quarter of FY22. The profit after tax during the same period stood at Rs 26.81 crore.
What is target price?
The stock has given a breakout above 850 levels and there are chances of touching 1200 levels. Vaibhav Kaushik, Research Analyst, CGL Broking said that the 21 DEMA for this stock is near 870 and on a close basis, investors are advised to keep a stoploss of 870. Pravesh Gaur, Senior Technical Analyst, Swastik Investments said that 1000 level will prove to be an important psychological level for the stock. If this stock goes above this then it can go beyond 1100. When there is a correction in this stock, Rs 900 can act as an important support.
Ratnesh Goyal, Senior Technical Analyst, Arihant Capital said that a suitable buy range for JBM Auto is in the range of Rs 880 to Rs 850. This will give suitable entry points to the investors. The estimated target price for the stock is Rs. 1100 which indicates significant growth potential. A stoploss of Rs 810 can be applied to manage the risk effectively.