Why is JBM Auto falling/rising?

Jul 04 2025 08:56 PM IST
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As of 04-Jul, JBM Auto Ltd's stock price is 647.35, down 0.14%, with significant underperformance compared to its sector and broader market. Despite healthy long-term growth prospects, challenges such as high debt levels and declining investor participation contribute to its negative performance.
As of 04-Jul, JBM Auto Ltd's stock price is currently at 647.35, reflecting a decrease of 0.9 points or 0.14%. The stock has underperformed its sector by 0.81% today, with a delivery volume that has fallen by 42.54% compared to the 5-day average, indicating declining investor participation. Over the past week, the stock has shown a modest increase of 0.75%, but it has significantly underperformed over the longer term, with a 1-month decline of 9.46% and a year-to-date drop of 15.60%. The company has healthy long-term growth prospects, with net sales and operating profit growing at annual rates of 24.58% and 27.17%, respectively. However, it faces challenges such as a high Debt to EBITDA ratio of 3.86 times, which indicates a low ability to service its debt, and a poor debtor turnover ratio of 5.43 times, contributing to its negative performance.

In the broader market context, while the Sensex has gained 3.01% over the past month and 6.77% year-to-date, JBM Auto's performance has been starkly negative, with a 1-year return of -39.73% compared to the market's positive return of 4.23%. This significant underperformance suggests that investor sentiment towards JBM Auto is weak, potentially influenced by its high debt levels and low mutual fund holdings, which stand at only 0.22%. The stock's valuation appears expensive with a PEG ratio of 5.9, despite trading at a discount compared to its peers. Overall, the combination of declining investor participation, high debt levels, and poor short-term performance relative to the benchmark indicates a challenging environment for JBM Auto Ltd.
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