Reviews
In this edition, we have reviewed Jamna Auto Industries Ltd. and PVR Ltd. We suggest our reader-investors to HOLD in Jamna Auto Industries Ltd. and PVR Ltd.
We had previously recommended Jamna Auto Industries in Volume 35, Issue 2, dated December 23, 2019 to January 5, 2020, in the ‘Low Scrip’ section. The stock was then trading at Rs40.40 and was recommended based on the company’s leadership in leaf and parabolic springs and its aim to be a complete suspension system provider. Jamna Auto Industries is engaged in providing automotive suspension solutions for commercial vehicles.
On the quarterly consolidated front, the company reported net sales of Rs228.59 crore in Q3FY20, down by 52.99 per cent from Rs486.29 crore reported in Q3FY19. Operating profit fell by 62.03 per cent and was recorded at Rs25.61 crore in Q3FY20 as compared to Rs67.45 crore in Q3FY19. The company reported a net profit of Rs10.08 crore in Q3FY20, down by 64.72 per cent from Rs28.55 crore in Q3FY19.
Looking at the annual trends, the company reported net sales of Rs2,134.81 crore in FY19 as compared to Rs1,757.32 crore in FY18, recording a gain of 21.48 per cent. Operating profit expanded by 16.69 per cent to Rs287.67 crore in FY19 as compared to Rs246.53 crore in FY18. Net profit reported for FY19 was Rs137.45 crore, up by 9.69 per cent from Rs125.31 crore in FY18. The NBFCs crisis along with the switch from BS IV to BS VI emission norms and the national lockdown has stung automotive component makers, dealers and buyers. However, the company still has good long-term growth prospects and should see a positive performance post the crisis in the automotive industry. Thus, we recommend HOLD.
We had previously recommended PVR Ltd. in Volume 35, Issue 2, dated December 23, 2019 to January 5, 2020 in the ‘Choice Scrip’ section. The stock was then trading at Rs1,822.35. PVR Ltd. is the largest and the most premium film exhibition company in India. It has nearly 800 screens and is further expanding aggressively with about 42 screens. The stock was recommended based on the company being a leading multiplex chain in India, PVR’s good expansion plans and strong revenue growth.
On the consolidated financial front, the company posted net sales of Rs915.74 crore for Q3FY20, an increase by 8.61 per cent from Rs843.11 crore in Q3FY19. The PBDT was Rs193.33 crore, expanding by 37.41 per cent in Q3FY20 fromRs140.70 crore posted in Q3FY19. The company gained a net profit ofRs36.41 crore in Q3FY20, decreasing by 34.24 per cent fromRs55.37 crore, gained in Q3FY19.
On the annual front, the net sales came in at Rs3,085.56 crore in FY19, up by 32.19 per cent from Rs2,334.11 crore in FY18. The PBDT in FY19 increased by 40.87 per cent to Rs491.46 crore from Rs348.88 crore in FY18. Its net profit in FY19 was Rs190.52 crore, down by 52.72 per cent from Rs124.75 crore posted in FY18.
The current lockdown situations has forced multiplexes to remain shut. This has resulted into delay and cacellation of movie screenings. Additionally majorityof the traffic has shifted to online digital platforms. But, despite the impact on the multiplex sector due to the virus pandemic, pent-up demand for leisure activities will create substantial growth in time to come. Hence, we recommend HOLD.