Shares of Jamna Auto Industries extended rally on Friday and were trading over 6 percent higher. The stock price jumped over 20 percent in two trading sessions led by buying on hopes of a recovery in Commercial Vehicle space.
NSE
Optimistic management commentary by CV major Ashok Leyland fueled a rally in shares of Jamna Auto Industries as investors hoped for a revival in the CV sector. A recovery in demand for the CV segment augurs well for Jamna Auto Industries.
The CV segment is one of the worst-hit sectors due to the prevailing slowdown, regulatory changes, emission norms, and the economic fallout due to the coronavirus pandemic-induced lockdowns.
Jamna Auto Industries is India’s top spring manufacturer and a supplier to commercial vehicles major Ashok Leyland.
The company’s plants are strategically located across CV hubs in the country and its clients include Ashok Leyland, Force Motors, ISUZU, Tata Motors, among others. It is the market leader by a mile in India and is also the third-largest leaf spring manufacturer globally which is essential for suspension of the vehicle.
Meanwhile, a positive outlook from Ashok Leyland raised hopes of recovery in the sector leading gains in Jamna Auto’s share price.
Gopal Mahadevan, Whole Time Director & Chief Financial Officer, Ashok Leyland said that the company used this quarter to drive disruptive cost efficiencies and productivity measures.
“The focus was also on maintaining liquidity, not just of the company but also our dealers and vendors. There have been tremendous learnings for us in doing business efficiently without dropping the ball on growth initiatives. We will come out of this much stronger,” Mahadevan said.
During the quarter Ashok Leyland introduced its AVTR Range of Modular Vehicles in the Heavy Commercial Vehicle segment as also a completely differentiated Intermediate Commercial Vehicle range of vehicles.
“Despite the challenging times we went ahead and launched the unique Modular Business Platform “AVTR”, which gives our customers the flexibility to choose vehicles as per their requirements. This will be a game-changer in the industry and we have already rolled out over 2000 of these vehicles till date this year and together with our LCV range we have already rolled out 10,000 BS-VI vehicles. This is indeed a very encouraging sign for the quarters to follow,” said Vipin Sondhi, MD & CEO Ashok Leyland.
Thus, expectations of a revival in CV demand proved to be positive for Jamna Auto's stock price. At 11:55 am, the shares were trading 5.24 percent higher at Rs 40.20 piece on the BSE.