Axis Direct has initiated coverage on Pricol with a 'Buy' rating, setting a target price of Rs 935. This target implies a potential upside of approximately 21% from the current market price. The brokerage's valuation is based on Pricol's premium product portfolio and anticipated growth in digital instrument clusters and plastics business.
Pricol's growth is expected to be driven by the increasing adoption of digital and TFT instrument clusters, expansion in the plastics business, and new orders from global automobile manufacturers. Axis Direct has valued Pricol at 24 times its estimated FY29 earnings per share of Rs 39. The brokerage forecasts compound annual growth rates of 19% in revenue, 21% in EBITDA, and 24% in profit after tax between FY26 and FY29.
Pricol's revenue is projected to rise from Rs 3,964 crore in FY26 to Rs 6,679 crore in FY29, with EBITDA increasing from Rs 469 crore to Rs 825 crore. The company's net profit is expected to grow from Rs 251 crore to Rs 475 crore over the same period. The EBITDA margin is anticipated to improve to around 12.4% by FY29, supported by a better product mix and scale efficiencies.
“Pricol’s growth would be supported by rising adoption of digital and TFT instrument clusters, expansion of its plastics business, higher content in electric vehicles and new orders from global automobile manufacturers.”
Axis Direct
A proposed demerger of Pricol's Driver Information and Connected Vehicle Solutions business is expected to unlock shareholder value. The division, contributing Rs 2,425 crore or about 61% of Pricol's consolidated FY26 revenue, will be transferred to Pricol Autotech. Shareholders will receive one Pricol Autotech share for each Pricol share held.
Pricol's expansion into the precision-plastics segment through its Rs 215-crore acquisition of Sundaram Auto Components' injection-moulding business is expected to double its turnover capacity to Rs 2,000 crore by FY28. The company holds a 30–35% share of India's two-wheeler instrument-cluster market and a significant share in commercial-vehicle segments.
Background
Pricol has been actively expanding its market presence and product offerings, particularly in the digital and precision-plastics segments. The company's strategic initiatives, including acquisitions and proposed business demergers, are aimed at enhancing shareholder value and capitalizing on emerging market trends.
As Pricol moves forward with its demerger and expansion plans, investors should watch for regulatory approvals and the impact of increased digital cluster adoption on its financial performance.
