Ways2Capital Reviews : Jamna Auto Signs Technology Transfer Agreement With UK Based Tinsley Bridge

India’s largest manufacturer of tapered leaf and parabolic springs, Jamna Auto Industries Limited (JAI) has entered into a technology transfer and technical assistance agreement with Tinsley Bridge Limited (TBL), UK. The agreement is for transfer of TBL’s Extralite Spring Technology and Special Steel Technology to JAI. This will enable JAI to manufacture high stress, lighter springs with increased life for commercial vehicles. The company, as of now, has not specified any financial details related to the agreement.

JAI has capacity of 2,40,000 tonnes of springs/annum. Shift in preference towards high tonnage trucks will favor parabolic springs (higher realizations, margins). Continued Government spending on infrastructure, free freight movement across states, overloading norms are biggest triggers for CVs. Revenue growth triggers for JAI over the medium term are CV demand recovery, new market expansion (exports, after markets) and product portfolio expansion. Margin triggers are greater revenue contribution from after markets, exports and parabolic leaf springs (~20% higher realization vs. conventional springs). The company has expanded presence in after-market segment with market share of 15% currently. This market is 1.5x the OEM market and will see preference shift towards organized players post GST implementation. JAI has 73% market share among Indian OEMs in spring manufacturing. It operates through nine plants (seven states).

Jamna Auto Industries Ltd ended at Rs93.35 down by Rs2.2 or 2.3% from its previous closing of Rs95.55 on the BSE. The scrip opened at Rs95 and touched a high and low of Rs95 and Rs92.90 respectively. A total of 12,11,723 (NSE+BSE) shares were traded on the counter. The current market cap of the company is Rs3,719.66cr.

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About Bhoomi Desai