Jtekt India Ltd (JTEKTINDIA) – 2

<< JTEKTINDIA Financial

JTEKT India Limited’s financial condition is moderate but faces challenges with recent profit declines; the company has made strategic investments, won new export orders, and maintains a positive long-term outlook, though valuations are currently high and recent news signals short-term caution among analysts.^[1]^[2]^[3]^[4]^[5]^[6]^[7]

Financial Condition

Revenue: Q1 FY25 stood at ₹651.40 crore, growing sequentially from previous quarters; FY25 TTM revenue estimated at nearly ₹2,400 crore.^[4]^[1]
Net Profit: Q1 FY25 net profit was ₹24.65 crore, with FY25 TTM PAT of ₹75.3 crore, showing year-on-year profit contraction.^[1]^[4]
Operating Margins: 7.7% (FY25 TTM, down from over 9% in FY24).^[4]
Debt and Liquidity: Low leverage (debt/equity < 0.8), strong interest coverage (17.9x in FY25), and healthy cash accruals indicate a stable financial risk profile.^[3]^[4]
Recent Trends: Profits have fallen by over 30% in the past year, despite higher revenues, pointing to margin pressures.^[7]^[3]

Orders and Operating Outlook

New Orders & Plants: Recently commenced production of new Constant Velocity Joint (CVJ) lines and set up a new facility in Dharuhera; has received significant export orders, including for JTEKT Brazil and ongoing US exports.^[2]^[8]
Capacity & Export Growth: Initiatives could double export share in the sales mix from around 2% to 4–6% in the medium term.^[2]
End Markets: Major supplier for Maruti Suzuki and Toyota; growth prospects are closely tied to Indian OEM performance.^[2]
Future Growth: Management expects industry-wide auto market growth of 3–5% annually; no detailed internal target disclosed but medium-term investments are expected to drive faster topline growth.^[9]^[2]

Buy/Sell Recommendations

Current Valuation: Overvalued on both P/E (~62–65x) and P/B (5.2x), well above sector and historical averages.^[5]^[7]
Fundamental View: Some analysts rate the stock as “overvalued” and suggest it is not a good buying opportunity at current levels; recommend avoiding fresh buys unless valuations become reasonable.^[5]^[7]
Technical Trend: Despite a recent rally, the stock saw a sharp correction mid-September, likely due to profit booking and concerns about earnings.^[3]^[7]
Institutional Holdings: Institutional investors (including FIIs) have marginally increased their stakes recently, signaling some confidence in fundamentals despite short-term pressure.^[3]

Latest News Affecting Outlook

Company Clarification: Exchanges have sought clarification on recent sharp price volatility (September 2025), which could be linked to speculative activity or sector rotation.^[10]
Fundraiser: Board recently approved a rights issue to raise ₹250 crore for expansion and working capital, supporting future growth.^[6]
Export Orders: New export orders from Brazil and US, with more opportunities under assessment if initial contracts are successful.^[2]
Industry Developments: Ongoing investments in the auto parts sector and new capacities align with expectations of stable growth in the Indian auto market through 2030.^[11]
Insider View: Management remains optimistic about margins and topline improvements with new products and operational efficiencies.^[9]^[2]

Conclusion

JTEKT India is fundamentally stable but currently trading at high valuations with recent dips in profitability. The near-term may be volatile, but a strong outlook on exports, capacity additions, and Indian OEM partnerships could bolster long-term growth if margin improvement materializes. Cautious accumulation may be warranted after significant corrections, but aggressive buying is not advised at present valuations.^[7]^[4]^[5]^[9]^[3]^[2]

JTEKT India Limited (NSE: JTEKTINDIA) is a listed automotive components manufacturer headquartered in Gurugram, India. The stock is actively traded on NSE and falls in the auto ancillaries/automotive aftermarket industry segment.

Latest Share Price & Financial Metrics

Current Price: ₹170.00 (as of 15 September 2025, mid-market).
Market Cap: Approx. ₹4,715 Cr – ₹4,619 Cr (varies by source, latest estimate).
52-Week High/Low: ₹188.50 / ₹103.76.
P/E Ratio (TTM): 61–65 (well above sector average ~42–49).
EPS (TTM): ₹2.57–2.74.
P/B Ratio: 4.05–5.24.
Dividend Yield: ~0.41%.
Day’s Range: ₹165.8–₹171.6.
Volume (Recent): 2.82 lakh (median traded volume is 12+ lakh).

Business Operations and Outlook

Products: Steering systems, bearings, machine tools for Indian and export markets.
Industry Rank: Smallcap; “high risk” (volatility ~3x Nifty), moderate recent financial growth, high profitability, and moderate red flags.
Recent Trend: The stock has been in a strong uptrend since August 2025, but is currently trading at valuations above both its sector and historical averages (P/E, P/B high).

Key Observations

FII holdings have increased in recent quarters.
Company does not offer an attractive dividend for yield-oriented investors.
Stock is considered overpriced but not currently in an “overbought” technical zone; RSI is 66.9 as of 14 Sept 2025.
Financials show moderate growth and high profitability, but performance in price and returns has been relatively low compared to competitors.

Summary Table

Metric	Value
Current Price	₹170.00
Market Cap	₹4,619–4,715 Cr
52-Week High / Low	₹188.50 / ₹103.76
P/E Ratio (TTM)	61–65
EPS (TTM)	₹2.57–2.74
P/B Ratio	4.05–5.24
Dividend Yield	~0.41%
Sector	Auto Parts / Consumer Discretionary
Headquarters	Gurugram, India
Founded	1984

JTEKT India Limited is a prominent mid-cap player in the Indian auto components sector, currently trading at a significant premium to sector averages in terms of valuation. The company reports healthy profitability and moderate growth, with recent increases in FII holdings but offers limited dividend returns.