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Dolat Capital Report
JBM Auto Ltd. reported in line performance in Q1 FY21.
Net revenue declined 75% YoY to Rs 1.3 billion (versus estimate Rs 1.37 billion) led by de-growth in component and tooling division (down 86%/down 37% YoY) respectively, partially compensated by flat growth in bus division.
Due to lockdown and negative operating leverage operating profit turned negative to Rs 79 million (versus estimate loss of Rs 72 million).
The management expects sharp recovery in earnings from Q2 FY21 onwards led by recovery in passenger vehicle volume and strong order book in bus division.
Current utilisation at plant is approximately 80-82% which is expected to reach 90% in festive season.
Moreover, the company is taking various cost optimisation initiative such as reduction in manpower cost (shift management) and administrative overhead which will help to protect the margin.
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