Jyoti CNC Automation Shares See 28% Upside Potential As Yes Securities Initiates Coverage — Check Target Price

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Yes Securities Report

We initiate coverage on Jyoti CNC Automation Ltd. with “Buy” rating and target price of Rs 1,090. Jyoti CNC is the third largest CNC machine supplier in India with a market share of c10%.

We couldn’t find any direct listed peer of Jyoti CNC, thus making it difficult to assign a valuation multiple. However, we value Jyoti CNC at a 35x FY28 PE ratio considering-

1. sales growth potential in 25-35% range over the next three years;

2. significant demand potential from A&D and EMS sector,

3. sustainable margins in mid-20% range,

4. cash flow generation from FY27.

Our multiple implies a target price of Rs. 1,090, indicating an upside of 28% (CMP: Rs. 850).

RISKS TO INVESTMENT THESIS

1. Slowdown in industrial growth

2. Slower than expected progress on import substitution

3. Global players may continue to dominate the market

4. Restrictions on import of large technical machines from China can cause unexpected delays.

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