Why JBM Auto’s stock has zoomed three times in three months

Automotive company JBM Auto Ltd’s shares jumped to a new record high on Tuesday after touching the 5% upper circuit, stretching the gains to more than 200% in a little over three months and more than 400% within a year.

Shares of JBM Auto were locked at the 5% upper circuit of Rs 1,565.20 while benchmark indices were about 0.2% higher. The shares gained for the fourth consecutive day and have already risen 39% in 2022.

The company now commands a market capitalization of Rs 7,403 crore, or almost $1 billion.

A look at the share price movement over the past 52 weeks shows that JBM Auto has zoomed five times during the period, from a one-year low of Rs 303.90 apiece on the BSE, stock-exchange data show.

A closer analysis shows that while the stock had gained nearly 70% in the first nine months of 2021, it began surging even further from October. Since then, the stock has more than tripled from Rs 500-levels.

In comparison, benchmark indices touched record highs in mid-October and then fell around 10% by December, before bouncing back in the new year.

Overall, JBM Auto’s 415% gain has far outpaced the Sensex’s 23% rise over the past year.

So, what is fuelling this spectacular rise in JBM Auto’s stock?

JBM Auto's EV push

A key reason for the rapid gain is the profit-making company’s focus on the fast-growing electric vehicle segment.

JBM Auto is the bus manufacturing division of JBM Group. The company provides complete e-mobility ecosystem right from electric vehicles, charging and power infrastructure to maintenance and support.

It launched its ECOLIFE range of 100% electric buses in February 2020. The electric buses are now already operating in various states such as Karnataka, Gujarat, Delhi-NCR region, Maharashtra, and Andaman and Nicobar. In fact, the recent flag-off of the ECOLIFE electric buses in Karnataka marks the first-ever rollout of electric buses in the state.

On Monday, JBM Auto said it had acquired a 51% stake in JBM Green Energy Systems Pvt. Ltd and JBM EV Industries Pvt. Ltd through its subsidiary JBM Electric Vehicles Pvt. Ltd. JBM Green Energy makes lithium-ion battery packs for electric vehicles while JBM EV Industries makes key aggregates and auto systems for electric vehicles.

“This stake acquisition is a true testimony to the fact that JBM Auto is committed towards its mission of commissioning the end-to-end e-mobility ecosystem completely localised in India,” said Nishant Arya, Vice Chairman and MD at JBM Auto.

The company, Arya said, has developed synergies between its various businesses in critical e-mobility domains such as electric buses, battery technology, charging infrastructure and other aggregates.

“We already have more than 25 local vendors for different EV products across India… We have already deployed our e-mobility platform solution in various states of India that has been tailored to provide optimum cost of ownership to the customer,” Arya added.

JBM Auto registered a 23% year-on-year increase in net profit to Rs 25.19 crore in the quarter ended Sept. 30, 2021 while pre-tax profit climbed 34% to Rs 42.14 crore. Sales jumped 46% from a year earlier to Rs 752.72 crore.