The shares of an Auto Ancillaries company, specializing in manufacturing and selling engine components, including valves, pistons, and piston rings, jumped upto 2 percent following the acquisition of 100 percent stake in Karna Intertech.
Price action
With a market capitalization of Rs. 8,149.88 crores on Monday, the shares of Shriram Pistons & Rings Ltd jumped upto 1.55 percent making a high of Rs. 1888.85 per share compared to its previous closing price of Rs. 1860.10 per share.
What Happened
Shriram Pistons & Rings Ltd, engaged in manufacturing and selling engine components, including valves, pistons, and piston rings, has entered into a Share Purchase Agreement to acquire 100 percent equity stake in Karna Intertech Private Limited (Karna).
Karna, a manufacturer of high-precision die-casting moulds, is a key supplier of gravity die casting moulds to SPRL for producing piston castings. This acquisition will help SPRL leverage synergies and support the future needs of its plants.
The transaction, which involves a cash consideration of Rs. 50 million, is expected to close by April 15, 2025. Karna, founded in 1981, is based in Bahadurgarh, Haryana, and reported a revenue of Rs. 49.98 million in FY 2023-24.
About the company
The Company is the largest manufacturer of Pistons, Pins, Rings, and Engine Valves in India with two Manufacturing units in Ghaziabad, Uttar Pradesh, Pathredi (Rajasthan), Pithampur (Madhya Pradesh).
They have an exceptional lineage of the Shriram Group, one of the most reputed Industrial houses. Driven by advanced technology, the Company can provide end-to-end solutions, which include Design, development, validation, and manufacturing of products for its customers at its Tech Centre with highly talented designers.
Recent Acquisitions and Diversification
The company has acquired a 100 percent stake in TGPEL Precision Engineering Limited, strengthening its capabilities in precision plastic injection molds and components. This acquisition complements the previous purchase of SPR Takahata, which also specializes in precision-molded parts for the automotive industry.
The company also aims to diversify its business model by expanding into non-automotive sectors, including electrical, consumer goods, and medical applications.
Financials
The company’s total revenue rose by 11.4 percent from Rs. 784.99 crore to Rs. 875.13 crore in Q3FY24-25. Meanwhile, Net profit rose from Rs. 107.36 crore to Rs. 119.91 crore during the same period.
Written by Sridhar J
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