Buy Shriram Pistons & Rings; target of Rs 2450: Emkay

Emkay's research report on Shriram Pistons & Rings

SPRL’s Q4 results were healthy, with consol. revenue/EBITDA/PAT growth of 22%/31%/27% YoY. SPRL’s 18% rev. growth was 2x the underlying auto industry’s. Mgmt guides for sustained outperformance in FY25 too, led by deeper market/client penetration & sustained growth in after-market, exports. SPRL continues to strengthen its already dominant positioning in core products, with value-additive growth in newer technologies like CNG, hydrogen, etc. This is backed by its tech leadership and R&D efforts, even as i) strong export tailwinds from global OEMs are extending visibility for the IC engine (‘last man standing’); ii) accelerated foray into EV-specific and engine-agnostic parts (via M&As included) drives diversification and offers growth triggers.

Outlook

We retain our FY25/26 estimates and BUY rating; TP stays at Rs2,450 at 18x FY26E PER.