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JBMA - Fundamental Analysis: Financial Health & Valuation
Last Updated Time : 05 Nov 25, 7:43 am
Back to Fundamental ListFundamental Rating: 3.2
JBMA shows strong profit growth and industry relevance, but its high valuation, weak PEG ratio, and elevated debt levels temper its long-term attractiveness.
📊 Financial Overview
- Profit Growth: PAT rose from ₹32.1 Cr to ₹45.1 Cr QoQ, a 48.2% jump, signaling strong operational momentum.
- Return Metrics: ROCE at 14.3% and ROE at 12.1% are decent but not exceptional.
- Valuation: P/E of 107 is extremely high vs. industry average of 32.6, suggesting overvaluation.
- P/B Ratio: With a book value of ₹51.4 and current price of ₹665, P/B is ~12.9, indicating stretched valuation.
- PEG Ratio: -20.6 implies unsustainable growth expectations or distorted earnings trajectory.
- Debt Profile: Debt-to-equity ratio of 1.56 is concerning and may limit future expansion.
- Momentum: RSI at 57.1 and MACD at -1.34 suggest neutral to slightly bearish sentiment.
🏢 Business Model & Competitive Edge
- JBMA is a key player in auto components and electric vehicle manufacturing, aligned with future mobility trends.
- Strong presence in OEM supply chains and diversified product lines offer resilience.
- Positioned as a mid-cap multibagger with 726% returns over 5 years
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💡 Entry Zone Recommendation
- Current price near DMA 50 (₹663) and below DMA 200 (₹686) offers a technical entry opportunity.
- Suggested Entry Zone: ₹640–₹660 for accumulation.
- Long-term holding viable if debt is reduced and valuation moderates.
✅ Positive
- Strong quarterly profit growth (48.2%).
- Strategic alignment with EV and auto component growth.
- Historical multibagger performance with high investor interest.
⚠️ Limitation
- Extremely high P/E and P/B ratios.
- Negative PEG ratio indicates valuation distortion.
- Debt-to-equity ratio of 1.56 is above comfort levels.
📉 Company Negative News
- FII holdings declined by 0.40%, indicating reduced foreign investor confidence.
- Valuation concerns raised by analysts due to unsustainable multiples
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📈 Company Positive News
- Strong quarterly earnings beat expectations
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- Positioned as a potential multibagger in auto parts and EV space
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🏭 Industry
- Auto components industry is benefiting from EV transition and infrastructure growth.
- Industry P/E at 32.6 is far below JBMA’s, suggesting caution on valuation.
🧾 Conclusion
- JBMA is a growth-oriented auto component player with strong fundamentals but excessive valuation.
- Entry near ₹640–₹660 is reasonable for long-term investors with high risk tolerance.
- Monitor debt reduction and valuation normalization for sustained upside.
Sources
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