The Indian auto components industry contributes 7.5% to GDP and employs 32 million people. Turnover reached $74.1 billion in FY 2023-24, up from $69.7 billion. With exports making up 25% of production, the sector is expected to grow to $200 billion by 2026, positioning India as a global sourcing hub.
With a market capitalization of Rs 5,841.78 crore, the shares of Pricol Ltd were trading at Rs 479.45 per share, increasing around 0.09 percent as compared to the previous closing price of Rs 479.00 apiece.
Brokerage Recommendations:-
Emkay Global Financial Services, one of the well-known brokerages in India, gave a ‘Buy’ call on the auto stock with a target price of Rs 600, indicating a potential upside of 25 percent from Thursday’s price of Rs 479.45 per share.
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Target Rational:-
As per the brokerage report, Pricol expects a 29% EPS CAGR from FY24-27, driven by premiumization and increased demand for digital clusters. It also anticipates a significant revenue boost through new clients like Honda 2Ws, supported by recent order wins over 18-24 months.
Additionally, new products, such as disc brakes, currently in testing, could generate ₹3 billion in revenue by FY26. Margins are projected to rise to 13.5-14% due to an improved product mix and operating leverage, while strategic acquisitions expand market opportunities.
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Financial analysis:-
Examining the company’s financial performance, revenue grew 15 percent from Rs 537 crore in Q1FY24 to Rs 620 crore in Q1FY25, and during the same period of time, net profit grew 44 percent from Rs 32 crore to Rs 46 crore.
Market leader position:-
The company commands an 80% market share in digital clusters for electric two-wheelers and maintains a 70% market share in commercial vehicles and 90% in off-highway vehicles. Share.
Future Planning:-
Pricol Limited is actively developing modular disc brake and BMS ( Battery Management Systems ) solutions primarily targeted at the electric two-wheeler and EV markets. They aim to commence manufacturing in Q4 of FY 25, with revenues increasing from FY 26 onwards as more EV variants are offered.
The business also plans to provide new driver information systems and instrument clusters for forthcoming two-wheeler, passenger car, and commercial vehicle models from key OEMs.(Original Equipment Manufacturers).
Pricol is working on coolant pumps, oil pumps for battery cooling, and battery telematics solutions for electric vehicles. Some of these items were previously released with clients such as Tata Motors and Ashok Leyland in Q3.
Company Profile:-
Pricol Limited conducts business and operations in driver information systems and connected vehicle solutions, as well as actuation, control, and fluid management systems for automotive original equipment manufacturers (OEMs) of two/three-wheelers and passenger vehicles.
Written by:- Abhishek Singh
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