Multibagger Stock: Jyoti CNC Automation shares surge 147% in a year, soar 300% over IPO price. Do you own? | Stock Market News

Multibagger Stock: Jyoti CNC Automation, one of the largest manufacturers of metal-cutting computer numerical control (CNC) machines, has handsomely rewarded its shareholders since its listing, with shares maintaining a steady upward trajectory and breaking new record highs with each passing month. 

The shares, valued at ₹553 apiece in January 2024, have surged 147% to trade at the current market price of ₹1,366. impressively, the stock has skyrocketed 312.7% from its IPO price of ₹331 apiece. Jyoti CNC made its debut on Dalal Street in January last year.

This remarkable rally in share prices can be attributed to the company’s strong financial performance in recent quarters, steady growth in its order book, and its position in the highly fragmented CNC machine market, which has a limited number of leading manufacturers.

Jyoti CNC Automation is engaged in only one business of manufacturing and selling metal-cutting computer numerical control (CNC) machines. The company delivers its solutions across a diverse set of industries, including aerospace, automobiles and auto components, agriculture, die & mould, electronic manufacturing services (EMS), infrastructure, healthcare, oil and gas, power, railways, space research, and other general engineering industries.

Order book improves 26%

During the September quarter, the company secured fresh orders worth ₹12,826 million, bringing its total order book to ₹42,893 million, which is a 26% improvement as compared to the order book of ₹34,037 million at the end of the June quarter.

The aerospace segment contributed 43% to the total order book, while other segments such as EMS and auto & auto components accounted for 17% and 15%, respectively, according to the company’s Q2FY25 earnings report.

Meanwhile, the acquisition of Huron Graffenstaden SAS, a pioneer across the world in the 5-axis machining technology, has bolstered the company’s technological capabilities and established its presence on the global scale, including access and ability to cater to global customers across key industries such as aerospace, defense, and other high-end engineering applications.

Growth engines

The growing manufacturing industry is set to drive the expansion of the machine tools market, with significant demand from key sectors such as automotive, aerospace and defence, railways, capital goods, and consumer durables. Additionally, industries like general engineering, medical, and dies and moulds are also prominent consumers of machine tools.

The company generates over 40% of its revenue from the aerospace segment, with projections indicating that the aerospace market is expected to reach approximately USD 1,388 billion by 2030, growing at a CAGR of 8.2%, fueled by increased aerospace spending due to geopolitical circumstances.

In the aerospace segment, the company has several key clients including HAL, Boeing, Airbus, Safran, Tata Advanced Systems, and Rolls Royce. 

The second-largest revenue contributor for the company was the auto and auto components, which is also expected to maintain strong growth in the coming years with the rise of electric vehicles.

Recent projections indicate that the global electric vehicle (EV) market is expected to grow at a CAGR of 17.8% during 2024–2030, while India’s electric car market is forecasted to expand at an impressive CAGR of 56.0% during the same period. Globally, the EV market size is projected to reach approximately USD 623.3 billion by 2028, growing at a CAGR of 9.82%.

Approximately 17% of the company’s revenue comes from the Electronics Manufacturing Services (EMS) space, which is anticipated to grow substantially at an impressive annual rate of 34% until FY26, reaching a value of USD 54.21 billion, according to recent estimates.

Supporting this growth, iPhone exports from India reached an all-time high of USD 15 billion in FY24, as per the recent media reports, with overall electronics exports increasing nearly 24% to USD 29.12 billion in the same year. The potential demand for CNC machines in India’s EMS sector is estimated at over 100,000 units within the next five years.

India’s semiconductor industry is on track to grow at a CAGR of 19.7% from FY22-23 to FY26-27, highlighting the sector’s potential for rapid development.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.