Jyoti CNC share price debuts at 11.78% premium; Should Buy, Sell or Hold?
Jyoti CNC Automation share price made a strong debut on Tuesday, listing with gains of 11.78% higher than the issue price of ₹331 on the NSE. It further rose to ₹426.40 levels during the morning trades.
On BSE, Jyoti CNC Automation share price was listed at ₹372 apiece, up 12.39% than the issue price.
Prashanth Tapse, Senior VP Research & Research Analyst, Mehta Equities Ltd said that “Considering bullish sentiments in the markets touching fresh life time high along with overwhelming response received from all sets of investors on the last day of subscription, Jyoti CNC signals decent listing gain of 15% on its issue price”.
The listing premium as per Tapse is justified on the back of strong order book from aerospace and defence given healthy visibility on topline as well as bottom line and growing demand in the CNC machine industry. Tapse also likes the primary objective of the IPO which is for reducing the debt helping the company to come out of interest burdens leading to improve the bottom lines in coming years.
Considering all the factors, Tapse recommends allotted investors to HOLD for Long term. For non allottees one can wait and watch for any dips post listing to accumulate and look to hold for a long term like 3-5 years’ time horizon. said Tapse.
The analysts had been expecting strong gains for Jyoti CNC. Analysts at Anand Rathi shares had also recommend a “Subscribe for Long term” rating to the IPO. they had said that company is using majority of its IPO proceeds to repay its debt which is going to reduce interest cost and hence it will have positive impact of profitability going forward. Apart from that there is revenue visibility for company due to its order book size and company operates under niche segment and majority of the revenue is from aerospace and defense industry which is high growth sector.
Vikas Singhania, CEO of TradeSmart had said that Jyoti CNC Automation, with a robust customer base exceeding 3,500 in India and Asia, stands out for its diverse product range and customised solutions. In H1 of FY24, ending on September 30, 2023, the company reported a net profit of ₹3.35 crore. on a total income of ₹510.53 crore. Management attributes setbacks in FY21 and FY22 to the pandemic and industry trends. Financial challenges, including past losses and a negative return on equity, have clouded the company’s otherwise appealing profile.
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Vikas had added that “With a fast-paced trajectory, strategic partnerships, technology upgrades, and a promising pipeline of contracts, Jyoti CNC Automation is poised for growth.”
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions
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Published: 16 Jan 2024, 11:38 AM IST