Buy Jyoti CNC Automation; target of Rs 1275: Anand Rathi

Moneycontrol • 1 day ago

Original source

Key Investment Pillars

  • Temporary export licence issues: Huron's revenue was impacted due to delayed receipt of export licenses, but the management has started receiving licenses, and the situation is expected to normalise over the next couple of quarters.
  • Strong order inflows: The company received orders worth Rs8.09bn in Q2FY27, taking the order book to Rs50.82bn, providing visibility for the next 18-20 months.
  • Increasing machine deliveries: The company dispatched 1,911 machines in Q2FY27, and with the new capacity ramping up, machine deliveries are expected to improve further.
  • Margin expansion: The company expects EBITDA margin to improve to 26.5% in FY28e, driven by operating leverage and higher revenue from Huron.

Thesis Validation Checklist

  • Export licence issuance: Investors should watch for the receipt of export licenses by Huron, which will be a key indicator of the company's ability to execute on its revenue guidance.
  • Order inflows and order book: A continued strong order inflow and a healthy order book will be essential to the company's revenue growth.
  • Machine delivery and capacity utilisation: An increase in machine deliveries and improvement in capacity utilisation will be critical to the company's margin expansion.
  • EBITDA margin: Investors should monitor the company's EBITDA margin, which is expected to improve to 26.5% in FY28e, driven by operating leverage and higher revenue from Huron.