Brokerage sees 30% upside potential in this smallcap auto ancillary stock; details here
The brokerage's report noted that the company is well-positioned to benefit from multiple tailwinds, including the upcoming TREM-V and BS-VII emission norms, which are expected to significantly expand its addressable market.
- Oct 7, 2025,
- Updated Oct 7, 2025 10:21 AM IST
Ashika Institutional Research has initiated coverage on Sharda Motor Industries Ltd, assigning a 'Buy' rating with a target price of Rs 1,410. The brokerage described Sharda Motor as a "hidden-value, high-quality auto-ancillary" player with strong leadership in emission systems for passenger and light commercial vehicles and growing prospects in light-weighting and exports.
The report noted that Sharda Motor is well-positioned to benefit from multiple tailwinds, including the upcoming TREM-V and BS-VII emission norms, which are expected to significantly expand its addressable market.
The TREM-V regulation alone could unlock a tractor exhaust market worth about Rs 800 crore, boosting the company's emission-related revenues at a projected 11 per cent CAGR between FY25 and FY28.
The company's control-arm business, which achieved a 41 per cent CAGR over FY21–25, is projected to grow 21 per cent annually in the next three years, supported by new orders and cross-selling opportunities.
Ashika expects revenue, EBITDA, and PAT to grow at 12 per cent, 18 per cent and 16 per cent CAGRs, respectively, over FY25–28.
The brokerage added that higher-value product contributions, a decline in catalyst usage and improving operating leverage are likely to drive margin expansion, with EBITDA margins expected to rise from 14 per cent in FY25 to 16% in FY28.
At 14x FY27E earnings, Ashika considers the stock attractively valued given its structural growth prospects and improving profitability. The brokerage suggests an upside potential of nearly 30 per cent from its calculated price of Rs 1,086.
Banco Products, established in 1961, has consistently expanded its footprint, product scope and manufacturing capacities. As of June 2025, promoters held a 64.31 per cent stake in the smallcap auto antically firm.
Meanwhile, shares of Banco Products were trading 1.05 per cent higher at Rs 1,102.05 in Tuesday's trade. At this value, the counter has corrected 40.58 per cent on a year-to-date (YTD) basis.
Ashika Institutional Research has initiated coverage on Sharda Motor Industries Ltd, assigning a 'Buy' rating with a target price of Rs 1,410. The brokerage described Sharda Motor as a "hidden-value, high-quality auto-ancillary" player with strong leadership in emission systems for passenger and light commercial vehicles and growing prospects in light-weighting and exports.
The report noted that Sharda Motor is well-positioned to benefit from multiple tailwinds, including the upcoming TREM-V and BS-VII emission norms, which are expected to significantly expand its addressable market.
The TREM-V regulation alone could unlock a tractor exhaust market worth about Rs 800 crore, boosting the company's emission-related revenues at a projected 11 per cent CAGR between FY25 and FY28.
The company's control-arm business, which achieved a 41 per cent CAGR over FY21–25, is projected to grow 21 per cent annually in the next three years, supported by new orders and cross-selling opportunities.
Ashika expects revenue, EBITDA, and PAT to grow at 12 per cent, 18 per cent and 16 per cent CAGRs, respectively, over FY25–28.
The brokerage added that higher-value product contributions, a decline in catalyst usage and improving operating leverage are likely to drive margin expansion, with EBITDA margins expected to rise from 14 per cent in FY25 to 16% in FY28.
At 14x FY27E earnings, Ashika considers the stock attractively valued given its structural growth prospects and improving profitability. The brokerage suggests an upside potential of nearly 30 per cent from its calculated price of Rs 1,086.
Banco Products, established in 1961, has consistently expanded its footprint, product scope and manufacturing capacities. As of June 2025, promoters held a 64.31 per cent stake in the smallcap auto antically firm.
Meanwhile, shares of Banco Products were trading 1.05 per cent higher at Rs 1,102.05 in Tuesday's trade. At this value, the counter has corrected 40.58 per cent on a year-to-date (YTD) basis.