Buy Pricol; target of Rs 600: Emkay Global Financial

Emkay Global Financial's research report on Pricol

Pricol offers strong multi-year earnings growth visibility (29% FY24-27E EPS CAGR) with attractive valuation relative to other 2W ancillaries amid: i) sustained premiumization trend on shift toward digital clusters; ii) ramp up in newer clients such as Honda 2Ws over the next 18-24 months (backed by order wins); iii) new products currently under the testing/validation stage potentially moving into revenue from FY26 (eg guides for ~Rs3bn from disc brakes in 3 years); iv) improving mix and operating leverage-led margin uptick to ~13.5- 14%; and v) strategic inorganic acquisitions expanding the addressable market size.

Outlook

We continue to like Pricol as a structural premiumization play that is also transforming into a multi-product company. Our estimates and TP are largely unchanged; we retain BUY with TP of Rs600/share at 27.5x Jun-26E PER.

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