Business Today

When the Going Gets Tough...

Jullundur Motor Agency has managed to grow at a decent pace despite a slowdown in the commercial vehicle market.
twitter-logo Dipak Mondal        Print Edition: October 11, 2015
Jullundur Motor Agency (Delhi) Ltd MD Deepak Arora
Deepak Arora: Betting on service quality. Photo: Shekhar Ghosh

BEST SME - TRADING

TOTAL INCOME Rs 251 Crore - 500 Crore

For Jullundur Motor Agency (Delhi) Ltd, a Rs 386-crore auto spare parts trading company, the past four-five years have been a grind. The reason is negative or flat growth in two auto segments, heavy commercial vehicles (HCVs) and tractors, which account for 50 per cent of its revenue. Tough competition added to the woes.

Despite the challenges, the 88-year-old company has expanded revenue by 10.5 per cent a year, on an average, for the past three years, helped by its diverse portfolio and pan-India reach. Its turnover grew from Rs 326 crore in 2011/12 to Rs 375 crore in 2013/14. Net profit saw a minor drop -from Rs 14.8 in 2011/12 to Rs 13.8 crore in 2014/15.


KEY FACTS

  • It distributes spare parts of 38 manufacturers in India, such as TVS Group and Rane Group
  • It has 80 branches and seven regional offices

FULL COVERGAE:India's best SMEs 2015

In 2014/15, revenue grew just 3 per cent. In its annual report, it cites the reason as "no improvement in mining activities". This is because around 40 per cent of revenue come from HCVs used in mining and other infrastructure activities. "While sales have fallen in HCV and tractor segments, we have grown in multi-utility, sport utility and passenger car segments," says Managing Director Deepak Arora.

But the company has had a healthy return on equity of 13.5 per for the past three years. It has also managed to keep its finances in order despite slow revenue and profit growth. It had a debt of Rs 7 crore in 2013/14. In 2014/15, it finally became debt-free.

The company, started in 1927, has 80 branches and seven regional offices. It distributes 15,000 parts across 38 product lines. "We have our own warehouses. The customer does not have to come to us. We send our sales agents to retailers for taking orders," says L.K. Nagpal, General Manager (Purchase). The company has over 300 sales persons. While the company's service-focused model is a plus, it also has transparent pricing policies that give it credibility.

The company distributes spare parts of 38 manufacturers. Some of the bigger partners are the TVS group, Rane group, Amalgamation group and Anand group, among others.

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