Jamna Auto Industries Ltd Management Discussions

Commercial Vehicle Industry overview

Key Highlights from FY 2024-25

The Commercial Vehicles (CVs) segment experienced a slight de-growth of 1.2% in FY 2024-25 compared to the previous year. However, the last quarter of FY 2024-25 concluded on a positive note.

Although the overall truck segment witnessed a slight decline, need for freight movement has been adequately met by migration towards higher gross vehicle weight (GVW) vehicles. The expanding network of highways and expressways is playing a crucial role in reducing logistics costs and enhancing regional connectivity.

Long-term demand for commercial vehicles appears positive given the proactive government policies, favourable monsoon prospects, infrastructure spending and Vehicles Scrapping Policy. The sector will also benefit from the two consecutive rate cuts by the RBI. These measures are expected to create demand by increasing accessibility to vehicle financing.

Overall, the macroeconomic factors and global geopolitics will determine the demand in CV segment, and supply chain dynamics going forward.

Companys performance

The Company achieved consolidated revenue of Rs 2270 crore, EBITDA of Rs 306 crore and PBT of Rs 256 crore as against consolidated revenue of Rs 2427 crore, EBITDA of Rs 331 crore and PBT of Rs 283 crore in the previous FY.

Focused After Market Strategy

As part of our market diversification strategy, we are continuously focusing on increasing revenue from Aftermarket India and exports segment. We are investing significant resources and time to strengthen our aftermarket operations. The results have been encouraging. In FY2024–25, we achieved our highest-ever Aftermarket India sales across both spring and non-spring product categories.

Key highlights:

Aftermarket India sales grew by 13% year-on-year.

The share of non-spring products in Aftermarket India doubled to 6% in FY2024-25, compared to 3% in FY2023-24.

New market revenues contributed approximately 23% in FY2024-25.

Long-Term Success Enablers

Sustained growth in the aftermarket will require strengthening core enablers, including world-class Supply Chain Management (SCM), a robust channel network, and digitalization. We are actively investing efforts and resources to build these capabilities.

Supply Chain Management (SCM)

Our Yamuna Nagar plant is dedicated to aftermarket production. During the year, we have established a specialized manufacturing line designed for small-quantity production, ensuring that no customer order is lost regardless of size.

Looking ahead to FY2025-26, we are setting up technologically advanced warehouses equipped with Automated Storage and Retrieval Systems (ASRS) to boost operational efficiency and accuracy.

Strengthening the Network

Distributors, dealers, retailers, and mechanics are critical to our supply chain and demand generation.

In FY2024-25, we continued to strengthen our partner network.

We plan to grow from our current base of 300+ distributors, 20,000+ retailers, and 25,000+ mechanics.

Our engagement initiatives with partners are aimed at further expanding customer reach and enhancing brand loyalty.

Digitalization

In todays rapidly evolving technological landscape, digitalization is essential for enhancing operational efficiency and strengthening engagement with our partners.

Our digital initiatives facilitate seamless order placement, real-time access to information, and financial benefits for our channel partners, including retailers and mechanics.

Last Year, we launched several new IT initiatives to further advance our digital capabilities:

Distributor Management System – Enables distributors to manage billing directly through our platform.

ERP Integration with Banking System – Automates real-time payment postings in ERP as soon as transactions are credited in the bank.

Strengthening Export Markets

In parallel with domestic aftermarket growth, we are expanding our distributor network internationally to drive revenue diversification.

Our strategy focuses on:

Broadening the product range within existing distribution channels.

Increasing our presence in new countries by appointing additional distributors.

In FY2024-25, alongside leaf springs, we began exporting allied products to new international markets — a significant step in diversifying our global product portfolio.

Discussions are also underway with Original Equipment export customers. Given the average lead time of approximately two years from initial enquiry to final order, the outcomes of these engagements are expected to be reflected in the coming years. This reflects the long-term commitment and engagement required in the global OEM ecosystem.

To support growing international demand:

Our Hosur plant has been designated exclusively for export production while the Yamuna Nagar plant serves the domestic aftermarket.

We are currently exporting to 17 countries across the world.

Export turnover increased to Rs 47 crores in FY2024-25, up from Rs 40 crores in FY2023-24.

Technology-Driven Growth

The introduction of advanced vehicles is accelerating demand for technology-based components. As a technology-driven company, we are well-positioned to capitalize on this shift with several competitive advantages:

Parabolic springs are a key technology product, with OEMs increasingly transitioning from conventional leaf springs. In the commercial vehicle segment, parabolic springs now represent approximately 30% of total spring demand — and we hold a dominant 85% market share in this category.

To meet the growing demand, we are expanding our parabolic spring production capacity, both at the existing facilities and through new upcoming plants in Adityapur in Jamshedpur and Indore.

Our hybrid springs and BS VI-compliant springs provide a distinct technological edge aligning with evolving industry regulations and performance requirements.

Additionally, our air suspension systems, lift axles and other allied products are gaining strong traction in both domestic and export markets.

We are effectively leveraging our established aftermarket network to distribute these allied offerings.

Air springs, a critical component in lift axle systems, are produced using high-quality imported flexible rubber and fabric membranes to ensure superior durability and performance.

OEM New Business Development

Expansion of Product Range to New Customers

FY2024-25was an encouraging year, during which we successfully expanded our existing product portfolio to new customers while simultaneously enhancing the range of our offerings.

Expansion of Product Range

As part of our long-term strategy to evolve from a component supplier to a system supplier, we are broadening our product portfolio within suspension systems.

New Products Introduced:

Start Supplying Slipper Suspension to Ashok Leyland.

These strategic expansions strengthen our position as a key partner for OEMs, offering integrated system solutions rather than standalone components.

New Projects: Suspension System and Rubber

Suspension systems market is expected to grow significantly over the next five years. A critical component of a suspension system is the axle, which accounts for nearly 60% of the systems total value.

Currently, JAI manufactures suspension systems on a limited scale by importing axle. To capitalize on this growth, we plan to set up an integrated suspension system plant, including in-house axle manufacturing at Indore. This will enhance value addition, improve quality, and position JAI as a complete trailer suspension system provider.

JAI also consumes rubber components worth approximately Rs 40 crores annually. In addition to internal requirements, JAI also supplies rubber products—such as bushes, bolsters, to the aftermarket. At present, these components are sourced from third-party vendors. To strengthen value chain control, JAI plans to establish in-house production capabilities for rubber components.

Service Network

To drive growth in the trailer suspension segment, JAI is launching a dedicated, nationwide after-sales service network focused on trailer products.

This network will include

(A) Authorized Service Centers (ASC)

(B) Certified Workshops (CWS)

(C) JAI Shoppee (Experience Centre)

These initiatives will ensure comprehensive support for our customers and strengthen JAIs position as a trusted system supplier in the CV space.

Product Range and Capacity Expansion

Our product portfolio includes a wide range of offerings: leaf springs, parabolic springs, Z springs, lift axles, trailer suspensions, slipper suspensions, air suspensions, suspension allied products, stabilizer bars, and other high-consumption parts such as brake linings, clutches, water pumps, bearings, jack rods, and universal joint crosses.

The contribution from these new product lines has been steady. In FY 2023-24 and FY 2024-25, we achieved a revenue contribution of 47% and 46%, respectively, from new products.

We are continuously expanding the supply of high value-added parabolic springs to both OEMs and the aftermarket. Additionally, expansion activities at the Companys Chennai and Malanpur units have also been successfully completed.

Update on New Projects:

The upcoming Jai Suspensions Limited plant at Adityapur, Jharkhand is expected to commence commercial production in Q2 of FY 2025-26.

The upcoming Jai Automotive Components Limited plant at Indore is expected to commence U-Bolt production in Q2 of FY 2025-26.

The Leaf Spring manufacturing facility of Jai Automotive Components System at Indore is in advanced stages of completion and is expected to be ready by Q4 of FY 2025-26.

Credit Rating, Financial Strength, and Dividend

At both standalone and consolidated levels, Company maintains a strong credit profile. In April 2025, ICRA Limited reaffirmed the same credit ratings of the Company, with an improved outlook for the Long-Term Credit Rating, as detailed below:

ICRA Limited
Instruments	Rating
Long term Fund based-	[ICRA]AA-(Positive)/[ICRA]A1+;
Term Loan	Reaffirmed and Outlook revised to positive from Stable
Long term/Short term-	[ICRA]AA-(Positive);
Fund based/Non fund based working capital	Reaffirmed and Outlook revised to positive from Stable
Commercial Paper	[ICRA]A1+; Reaffirmed

CARE Ratings Limited, in February, 2025 has rated the banking facilities of the Company as follows:

CARE Ratings Limited
Facilities	Amount (Rs in Crore)	Rating
Long Term Bank Facilities	90.00	CARE AA-; Stable

These ratings the Companys strong credit fundamentals and adequate liquidity position.

In FY 2024-25, the Company achieved Return on Capital Employed (RoCE) of 27% (29% net of bill discounting). The Company has no long-term debt and continues to generate healthy free cash flows. In line with our disciplined financial strategy, all capital expenditures are being funded through internal accruals without reliance on external debt.

Dividend:

During FY2024-25, the Company paid an interim dividend of Rs1.00 per equity share.

The Board of Directors has recommended final dividend of Rs1.10 per equity share (Rs1 face value) for shareholders approval at the upcoming Annual General Meeting.

With the proposed final dividend, the total dividend payout for FY2024-25 will amount to 46.45% of PAT.

Key Financials

Following are the key financials of the Company at standalone and consolidated levels. For details members are requested to see three years financial summary:

	Standalone		Consolidated
	( Rs in crore)		(Rs in crore)
Particulars	FY 2024-25	FY 2023-24	FY 2024-25	FY 2023-24
Revenue from	2211.85	2360.95	2270.14	2426.77
Operation
EBITDA	311.96	358.01	306.38	331.29
PBT	284.33	324.28	255.75	283.26
PAT	211.13	249.94	180.32	205.41
Networth	1055.91	935.43	993.17	903.18

 

	Standalone		Consolidated
Ratios	FY 2024-25	FY 2023-24	FY 2024-25	FY 2023-24
Debtors Turnover (no. of days)	30.5	21.4	27.5	20.7
Inventory Turnover (no. of days)	52.1	49.6	54.4	51.5

 

	Standalone		Consolidated
Ratios	FY 2024-25	FY 2023-24	FY 2024-25	FY 2023-24
Interest Coverage Ratio (in times)	(16)	(48.0)	74.6	75.8
Current Ratio (in times)	1.3	1.6	1.4	1.6
Debt Equity Ratio (in times)	0.1	0.2	0.1	0.2
EBITDA Margin (in %)	14.10	15.16	13.49	13.65
PAT Margin (in %)	9.55	10.59	7.94	8.46
Return to Net Worth (in %)	20.00	26.72	18.16	22.75

ESG

The Company recognizes the importance of Environmental, Social, and Governance (ESG) factors in ensuring long-term sustainability and responsible corporate conduct and is committed to integrating ESG factors into its core operations. During the year under review the Board of Directors expanded the scope of the CSR committee to include oversight of ESG-related initiatives. CSR Committee was reconstituted as the CSR & ESG Committee to oversee and guide Companys ESG strategies, goals, and policies. For effective implementation of ESG practices, the Company has also engaged ACMA Mobility Foundation (Automotive Component Manufacturers Association). ACMAs 24-month sustainability program is currently underway at the Malanpur and Chennai Units with best practices being horizontal deployment across other units.

As part of ESG practices, the Company has adopted a comprehensive ESG Policy duly approved by the Board. The ESG policy is available at the website of the Company. The Company has finalized its ESG Key Performance Indicators (KPIs), with focus on the following sustainability and social impact areas:

Focus Area	Key Initiatives
Environment	- Emissions Reduction of CO2
	- Increased Use of Renewable Energy
	- Reduction in Fresh Water Consumption
	- Reduction in Plastic Usage
	- Waste Management:
	Waste Diversion from Landfill
	Waste Recycled
	- Tree Plantation Initiatives
Social	- Community Engagement: Measured by number of events and activities conducted
	- Occupational Health & Safety:
	Zero serious accidents in Plants
	ISO 45001 Certification for All Plants
	100% Safety Training Coverage for Permanent Workers and Employees
	- Gender Diversity: Monitored through the ratio of women employees
Governance	- Timely Compliance and appropriate disclosures
	- Zero major cybersecurity incidents

An ESG Governance Structure has also been established to monitor and drive ESG practices throughout the organization which operates across three key levels. At the top-level, the ESG Committee of the Board provides oversight and strategic direction. Below this, senior management through an ESG council comprising senior personnel supervises ESG implementation across all plants. At the plant level execution, each plant has designated ESG Champions, supported by cross-functional teams to ensure execution of ESG activities on the ground.

The Company is adhering to the mandatory Business Responsibility and Sustainability Reporting (BRSR) guidelines set forth by Securities and Exchange Board of India. BRSR of the Company is separately presented at Annexure-6 to the Directors Report. Members are requested to refer to the BRSR for an overview of our environmental, social and governance activities in FY2024-25.

RISK Management

Risk management is an inherent part of the Companys business and management has a proactive approach in terms of managing risks. As part of its long-term strategy, the Company has implemented a five-year growth plan, Lakshya 50XT, which aims to drive sustainable growth while reducing exposure to business risks. A key focus of this plan is to diversify the Companys product portfolio and geographical markets to reduce dependence on the cyclical commercial vehicle (CV) segment.

The Company has established a risk management policy with three-tier framework for the identification, assessment, control, minimization, and mitigation of risks. This policy is governed by the Risk Management Committee and is available on the Companys website.

The Risk Management Committee regularly reviews key risks and monitors the implementation of timely and effective mitigation measures. This ongoing, structured approach enables the Company to remain resilient and prepared to challenging market conditions.

Robust IT Infrastructure

Last year, the Company experienced a ransomware incident that impacted its IT systems, including certain accounting software platforms. We are pleased to report that we have fully recovered from the incident, and no price-sensitive information or critical data was deleted or compromised as a result.

To further strengthen our cybersecurity framework, we have appointed PKF Algosmic as our Cyber Controls Implementation Partner. They are actively assisting us in continuously improving our IT infrastructure and enhancing our overall cybersecurity posture.

Internal Controls

The Company has established a robust and comprehensive system of internal controls, policies, and procedures designed to ensure the accuracy, efficiency, and timeliness of accounting records and financial information, while also preventing and detecting fraud and errors.

In addition to engaging external auditors, the Company established its own Internal Audit Department last year.

To further enhance internal control procedures and compliance, we are strengthening the capabilities of our Ramco ERP system by implementing additional control features directly into system operations. This includes all locations except for two, which will be migrated in FY 2025-26. As of now, the entire spring business has been migrated to the Ramco ERP system.

To provide independent assurance on the effectiveness of the Companys internal controls, we have appointed M/s Protiviti Risk & Business Consulting as our internal auditor. The internal auditors conduct concurrent audits and reviews to assess the adequacy and effectiveness of internal controls, verify compliance with laws and internal policies and examine transactions to detect and prevent fraud and errors. They also recommend corrective actions where necessary.

The internal auditors report directly to the Audit Committee of the Board, which is responsible for:

Approving the appointment of the internal auditor.

Reviewing and approving the annual internal audit plan.

Reviewing reports submitted by the internal auditors.

Evaluating the significance of audit findings.

Assessing the adequacy of management responses.

Monitoring the status of corrective actions taken.

Human Resource

We view our employees as a valuable resource and ensure that our HR practices are aligned with our goals. We have worked hard to create a team of professionals committed to achieving our goals. We rejuvenate the competence of our workforce through training and personal development. During FY2024–25, the Companys Chennai plant was awarded the TPM Excellence Award in Japan, recognizing its commitment to operational excellence and maintenance practices. To further strengthen its capabilities, the Company has engaged JITPI, Japan Institute of TPI to provide TMP training. During the year, units held 35 training sessions on various topics covering code of conduct, prohibition on insider trading, health & safety, skill development, wellbeing of employees and workers and POSH trainings. Through these trainings and organizational policies and practices, we focus on achieving our goals through personal growth and development. We also want to improve gender diversity in our workforce, so we hired more female workers on the shop floor. During the FY 2024-25, our relations with our employees and workforce remained cordial throughout the year.