Jyoti CNC Stock Price: Jyoti CNC stock price is up 13% from its listing price, but analysts are concerned. Should you record revenue?
The premium listing was in line with expectations, which can be attributed to the company’s market leadership and significant presence in the global CNC machine manufacturing market.
The focus of the company’s business model is on its customer base, healthy margins and proxy play in the defense sector. However, the high valuation is still a concern.
“Market optimism appears to hinge on the company’s expected profitability going forward. However, the steep P/E ratio of 324 times based on latest year’s EPS warrants closer scrutiny, especially when juxtaposed with its peer group,” said research analyst. Dhruv Mudaraddi said. , Stockbox.
Also Read: Maxposure IPO Subscriptions Cross 100 on Day 2; GMP 160% higher than issue price
The company plans to use the IPO funds to improve its balance sheet by reducing long-term debt by about 50%.
After the debut, analysts advised investors to book profits and those wishing to hold could maintain stop losses around the issue price. “Jyoti CNC’s listing debut was positive but overshadowed by concerns. Hence, we recommend investors to book profits and exit positions,” said Shivani Nyati, head of assets at Swastika Investmart.
Jyoti CNC has a strong order book of Rs 3,300 crore to be executed over the next few years. Other strengths include our diverse product portfolio and customer base, strong global support, and our ability to effectively leverage technology to capture growing market opportunities.
The company recorded a revenue and EBITDA CAGR of 27% and 75% respectively during FY21-23. From a net loss of 7 billion rupees in fiscal 21, the company recorded a surplus of 1.5 billion rupees in fiscal 23.
In FY23, the company’s revenue grew 24% to Rs 929 crore. Net profit during the same period was 1.5 billion won, recording a deficit of 4.8 billion won in the same period last year. In the six months to September 2023, it recorded revenue of $590 million and profit of Rs 330 million.
“At this point, we are advising investors who have received dividends to book profits. Further investments in the stock may be made in the near term after evaluating quarterly performance,” said Dhruv Mudaraddi, research analyst at Stoxbox.
(You can now subscribe to our subscription. ETMarkets WhatsApp Channel)
(Disclaimer: Recommendations, suggestions, views and opinions provided by experts are their own and do not represent the views of The Economic Times.)
