Buy Divgi Torqtransfer Systems; target of Rs 1300: Prabhudas Lilladher

Prabhudas Lilladher is bullish on Divgi Torqtransfer Systems has recommended buy rating on the stock with a target price of Rs 1300 in its research report dated December 14, 2023.

Broker Research

December 15, 2023 / 11:44 IST

Buy

26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on Divgi Torqtransfer Systems

The company is expected to benefit from industry trends given 1) its largest non-OEM supplier positioning of Transfer Cases (TC) to 4WD passenger vehicles in India, 2) first mover advantage led by sharp ramp-up in EV transmission business backed by strong order book from India’s leading electric PV OEM and addition of new customers and 3) recovery in exports business aided by entry in new geographies, products and new orders. We estimate Revenue/Adj. PAT CAGR of 35%/30% over FY23- 26E and expect margins to moderate at 25.2% in FY26E (27.5% in FY23) given higher mix of EVs and component revenues & decline in Transfer Case mix. The stock is trading at a P/E of 37x/27x on FY25/26E EPS. Initiate ‘Buy’.

Outlook

We initiate coverage on Divgi TorqTransfer (DIVGIITTS) with ‘BUY’ rating and TP of Rs 1,300 based on Mar-26 EPS at 35x PE. DIVGIITTS is a niche ICE component player with firm in-roads into the fast growing EV segment, we expect its revenues to increase 2.5x in the next 3 years, while still reporting industry leading margins.

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