JBMA - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 2.9
| Stock Code | JBMA | Market Cap | 13,132 Cr. | Current Price | 554 ₹ | High / Low | 790 ₹ |
| Stock P/E | 81.0 | Book Value | 51.4 ₹ | Dividend Yield | 0.15 % | ROCE | 14.3 % |
| ROE | 12.1 % | Face Value | 1.00 ₹ | DMA 50 | 597 ₹ | DMA 200 | 646 ₹ |
| Chg in FII Hold | 0.02 % | Chg in DII Hold | 0.01 % | PAT Qtr | 45.6 Cr. | PAT Prev Qtr | 45.1 Cr. |
| RSI | 41.1 | MACD | -15.7 | Volume | 7,53,548 | Avg Vol 1Wk | 7,03,404 |
| Low price | 489 ₹ | High price | 790 ₹ | PEG Ratio | -15.6 | Debt to equity | 1.56 |
| 52w Index | 21.7 % | Qtr Profit Var | 50.1 % | EPS | 6.60 ₹ | Industry PE | 28.0 |
📊 Financials: JBMA shows moderate fundamentals with ROCE at 14.3% and ROE at 12.1%, reflecting average capital efficiency. Debt-to-equity ratio of 1.56 indicates high leverage, which raises financial risk. Quarterly PAT improved slightly from 45.1 Cr. to 45.6 Cr., but overall earnings remain modest relative to market cap. EPS of 6.60 ₹ is low, limiting shareholder value creation. Cash flows may be constrained due to debt servicing requirements.
💹 Valuation: Current P/E of 81.0 is extremely high compared to the industry average of 28.0, suggesting significant overvaluation. P/B ratio is ~10.8 (Current Price / Book Value), which is steep. PEG ratio of -15.6 highlights weak or negative growth prospects relative to valuation. Intrinsic value appears much lower than CMP, offering little margin of safety.
🏢 Business Model & Competitive Advantage: JBMA operates in the auto ancillary sector, supplying critical components to OEMs. Its competitive strengths lie in scale, established client relationships, and sectoral demand. However, high debt, low return ratios, and stretched valuations reduce its competitive edge compared to peers with stronger balance sheets.
🎯 Entry Zone Recommendation: Current price of 554 ₹ is below DMA 200 (646 ₹), reflecting weakness. A more attractive entry zone would be closer to 480–500 ₹ (near 52-week low of 489 ₹), offering better risk-reward. Long-term investors should be cautious and accumulate only on significant corrections, given high valuations and leverage.
Positive
- Quarterly PAT growth of 50.1% shows operational improvement.
- Strong trading volumes (7.5 lakh) indicate liquidity.
- Minor increase in FII (0.02%) and DII (0.01%) holdings.
- Established presence in auto ancillary sector with OEM partnerships.
Limitation
- Extremely high P/E of 81.0 compared to industry average (28.0).
- High debt-to-equity ratio of 1.56 increases financial risk.
- Low EPS of 6.60 ₹ limits shareholder returns.
- Weak technical indicators (RSI 41.1, MACD -15.7) show bearish sentiment.
Company Negative News
- High leverage raises concerns about debt servicing capacity.
- Valuation multiples significantly above industry norms.
Company Positive News
- Quarterly profit growth indicates operational resilience.
- Stable institutional holdings with slight positive inflows.
- Strong demand outlook from auto sector supports long-term relevance.
Industry
- Auto ancillary industry P/E at 28.0 reflects moderate valuations.
- Sector growth driven by rising automobile demand and EV adoption.
- Global supply chain recovery supports long-term expansion.
Conclusion
⚖️ JBMA is fundamentally weak with high debt, low return ratios, and stretched valuations. While short-term profit growth is visible, the stock trades at unsustainable multiples. Investors should avoid fresh entry at current levels and consider accumulation only near 480–500 ₹ for better margin of safety. Long-term holding carries risk unless debt is reduced and earnings improve significantly.
I can also map out technical support/resistance levels to complement this fundamental view if you'd like a clearer entry-exit strategy.