42% upside seen in this auto-ancillary stock; brokerage initiates coverage with 'Long' call
For valuation, Equirus said, "Valuing the core business at 15x Dec'28E EPS (Vs Sector Average of 25x P/E) and adding Rs 303/share of net cash and investments yields a Dec'27 TP of Rs 1,340."
- Sep 15, 2026,
- Updated Sep 15, 2026 3:27 PM IST
Equirus Securities has initiated coverage on Sharda Motor Industries Ltd with a 'Long' rating on the auto-ancillary firm. The domestic brokerage said, "The company is one of India's leading automotive emission-control systems manufacturers, with an estimated ~30 per cent value share in domestic PV and LCV exhaust systems. Its established exhaust franchise provides the earnings and cash-generation base for diversification into powertrain-agnostic adjacencies."
However, the brokerage noted, "The current valuations discount a substantial terminal risk to Sharda Motor's emission control franchise, implying ~57 per cent domestic PV BEV penetration by FY40E (vs our ~33 per cent base case). Overall PV growth and the fiscal burden of preferential EV taxation support a more gradual transition."
Growth drivers
Equirus said, "In this backdrop, secured light-weighting and export orders support diversification, while the Donghee TLA adds higher-value suspension components. We project light-weighting/ export revenue at Rs 13bn/Rs 3.5bn by FY31E, anticipating further nominations."
The brokerage expects these initiatives to support earnings growth over the coming years.
"We expect these drivers to translate into a 12 per cent/15 per cent/15 per cent revenue/EBITDA/ PAT CAGR over FY26-FY29E," Equirus said.
Target price
For valuation, Equirus said, "Valuing the core business at 15x Dec'28E EPS (Vs Sector Average of 25x P/E) and adding Rs 303/share of net cash and investments yields a Dec'27 TP of Rs 1,340."
The brokerage added, "Valuations exaggerate the core emissions risk while overlooking growth from light-weighting, exports, acquisitions and emerging potential inorganic opportunities."
Equirus's December 2027 target price of Rs 1,340 implies an upside potential of around 42 per cent from its assessed price of Rs 944.
Equirus Securities has initiated coverage on Sharda Motor Industries Ltd with a 'Long' rating on the auto-ancillary firm. The domestic brokerage said, "The company is one of India's leading automotive emission-control systems manufacturers, with an estimated ~30 per cent value share in domestic PV and LCV exhaust systems. Its established exhaust franchise provides the earnings and cash-generation base for diversification into powertrain-agnostic adjacencies."
However, the brokerage noted, "The current valuations discount a substantial terminal risk to Sharda Motor's emission control franchise, implying ~57 per cent domestic PV BEV penetration by FY40E (vs our ~33 per cent base case). Overall PV growth and the fiscal burden of preferential EV taxation support a more gradual transition."
Growth drivers
Equirus said, "In this backdrop, secured light-weighting and export orders support diversification, while the Donghee TLA adds higher-value suspension components. We project light-weighting/ export revenue at Rs 13bn/Rs 3.5bn by FY31E, anticipating further nominations."
The brokerage expects these initiatives to support earnings growth over the coming years.
"We expect these drivers to translate into a 12 per cent/15 per cent/15 per cent revenue/EBITDA/ PAT CAGR over FY26-FY29E," Equirus said.
Target price
For valuation, Equirus said, "Valuing the core business at 15x Dec'28E EPS (Vs Sector Average of 25x P/E) and adding Rs 303/share of net cash and investments yields a Dec'27 TP of Rs 1,340."
The brokerage added, "Valuations exaggerate the core emissions risk while overlooking growth from light-weighting, exports, acquisitions and emerging potential inorganic opportunities."
Equirus's December 2027 target price of Rs 1,340 implies an upside potential of around 42 per cent from its assessed price of Rs 944.