Emkay Global Financial's research report on Shriram Pistons & Rings
SPRL delivered a healthy ~11% YoY consolidated revenue growth, outpacing the underlying industry’s low-single digit production growth by ~3%, though EBITDA margin at ~20.1% was ~68bps lower than our estimates (dragged by higher other expenses). Strong double digit 2W industry growth and increasing traction in the aftermarket segment provided a cushioning against the backdrop of a wider demand weakness in PVs/CVs/3Ws. Management remains optimistic about medium-term prospects of the auto industry, supported by a recovery in exports, as restocking gains pace and synergies from the TGPEL/Takahata acquisition (refer to: TGPEL acquisition: Strategic fit with strong financials) enhance cross-selling opportunities. With the Coimbatore plant set to double EMFi’s capacity, strong presence across powertrains, and a broader push toward non-auto applications, SPRL is strategically positioned for sustained outperformance.
Outlook
We have incorporated TGPEL’s financials into our FY26/27E, leading to a ~3% EPS accretion; we maintain our positive stance on SPRL and retain BUY with an unchanged TP of Rs2,950 at 20x Dec-26E PER.
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