Multibagger stock: 1,200% return in 5 years! Monarch Networth Capital initiates coverage on Pricol with 'Buy' rating

Shares of Pricol Ltd have delivered around 1,200 per cent return in the last 5 years. The multibagger stock is also up over 190 per cent in the last 2 years. It has recovered over 90 per cent from its 52-week low of Rs 211.25 and ended 0.61 per cent higher at Rs 405.80 on Friday.

Monarch Networth Capital has initiated its coverage on Pricol with a 'Buy' rating and a target price of Rs 465. Pricol, with a towering market share for cluster instruments in multiple sub-segments of the auto industry, is at a transformational stage after an extended period of uncertainty created by several endogenous and exogenous factors, it said.

It said that the company should grow faster than the industry on the back of a premiumization trend - clusters moving from mechanical to digital, underlying 2W demand rebounding after a lull, ACFMS (Actuation Control & Fluid Management Systems) segment facing tailwinds in exports and the introduction of new products.

"Integrated solutions such as advanced telematics and e-cockpit are likely to enhance the content per vehicle in the DIS (Driver Information System) segment. Additionally, efforts on electric coolant pumps, electric oil pumps, disc brakes and BMS (Battery Management Systems) aim to enhance Pricol's offerings in the EV segment, expecting a notable uptick in revenue contribution from EV products," said Monarch.

It further added that a potential acquisition in the margin-accretive industrial instrumentation space would help Pricol to partially de-risk the automotive cyclicity. It also expects margin expansion, a net cash balance sheet and very strong growth to come together to elevate return ratios and make a case for re-rating.

About the company

Pricol Limited is one of India's leading dashboard manufacturers headquartered in Coimbatore, South India. The company carries out its business and operations in driver information & connected vehicle solutions and actuation, control and fluid management systems catering to leading automotive OEMs in two / three-wheeler, passenger vehicles, commercial vehicles, farm equipment and offroad vehicles.

The company has 8 manufacturing facilities across Coimbatore, Manesar, Pantnagar, Pune, Satara and Sri city in India, 1 manufacturing plant in Jakarta, Indonesia with 3 international offices in Tokyo, Singapore and Dubai.

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