Shares of this auto ancillary stock under the ‘small-cap’ category jumped 4 percent in Thursday’s trading session after the company’s Board approved capacity expansion by 100 percent for its Constant Velocity Joints (CVJ) segment. In the past year, the company’s stock has risen nearly 40 percent.
With a market capitalization of Rs 3,843.37 crores, the stocks of JTEKT India Limited started their trading session on Thursday at Rs 148 and currently trade at Rs 151.20, gaining approximately 4 percent compared to the previous close of Rs 145.75 apiece. The company’s stock is inching towards its 52-week high mark registered at Rs 182.15.
Such bullish stock price movements are observed today after the company, through a regulatory filing with the Bombay Stock Exchange (BSE), intimated about stellar capacity expansion plans for its Constant Velocity Joints (CVJ) segment.
The company has an existing capacity of approximately 0.40 million and expects 100 percent additional capacity by July 2025. The addition will be funded by a mix of the company’s accruals as well as borrowings. The capacity expansion will help the company to cater to the demand of fast-growing Indian Original Equipment Manufacturers (OEMs).
During the recent financial quarters, the company’s prime business indicators, viz, operating revenues as well as after-tax profits, faced a marginal dip on a standalone basis with the former decreasing from Rs 592 crores during Q2FY24 to Rs 552 crores during Q3FY24, and the latter, keeping the timeframe the same, shifting down from Rs 29 crores to Rs 23 crores.
In addition, the company’s return ratios have shown positive movements with the return on equity (RoE) increasing from 5.46 percent during FY21-22 to 11.80 percent during FY22-23 and the return on capital employed (RoCE) from 8.49 percent to 15.39 percent.
JTEKT India Limited is primarily engaged in the business of manufacturing steering systems for the utility vehicles and passenger car markets in India. The company’s product portfolio includes steering, bearing, and other machine tools. It exports the products to the American, European, and Japanese markets.
Written by Amit Madnani
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