ICICI Securities's research report on ASK Automotive
ASK Automotive’s (ASK) EBITDA margin remained steady QoQ at 10.5%, as a slight inflation in input cost was balanced by a marginal improvement in operating leverage. Ahead, we see EBITDAM scaling up to ~12–13% in FY25–26E driven by higher mix of exports, superior operating leverage with the Karoli (Rajasthan) plant already ramping up since Q1 and the incremental benefit of incentives from the Karoli plant.
Outlook
We expect ASK to deliver ~22% revenue CAGR (exwheel assembly) over FY24–26E driven by a CAGR of ~11% in the braking system business and ~27% in the aluminium light-weighting business amid expectation of ~8% domestic 2W market CAGR. Retain BUY and TP of INR 405, implying 24x FY26E earnings. We build in a combined capex of INR 5.5bn for FY25–26E, including ASK’s Karnataka plant capex.
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