Axis Direct Initiates Coverage of Pricol with Buy Rating and Rs 935 Target Price
Key Takeaways
- •Axis Direct initiated coverage of Pricol with a Buy rating and a target price of Rs 935 per share, implying about 21% upside.
- •The brokerage expects Pricol to deliver strong growth through FY29, driven by digital instrument cluster demand, plastics expansion, rising EV content per vehicle, and global order wins.
- •Axis Direct flagged Pricol's proposed business demerger as a potential value-unlocking catalyst for shareholders.
- •Pricol's shares rose following the coverage initiation, which typically draws investor attention to lesser-followed mid-sized companies.
Shares of Pricol rose after brokerage Axis Direct initiated coverage of the auto components maker with a Buy rating and a target price of Rs 935 per share, implying an upside of roughly 21% from prevailing levels.
Axis Direct said it expects Pricol to deliver strong growth through the financial year 2029 (FY29). The brokerage's optimistic stance is underpinned by several drivers, including rising demand for digital instrument clusters, expansion of the company's plastics business, increasing electric vehicle (EV) content per vehicle, and a pickup in orders from global automotive customers.
The emphasis on digital instrument clusters reflects a broader industry shift: mechanical and analog gauges are steadily being replaced by digital displays in two-wheelers, passenger vehicles, and commercial vehicles, a transition component makers with electronics and software capabilities are positioned to benefit from. Similarly, rising EV content per vehicle is a widely tracked theme among Indian auto component suppliers, as electrification changes the mix of parts required per vehicle and opens new supply opportunities.
In addition to these operational growth levers, Axis Direct flagged Pricol's proposed business demerger as a potential catalyst. According to the brokerage, the demerger could unlock additional value for shareholders. Demergers are often viewed by brokerages and investors as value-unlocking events because they can allow distinct businesses to be valued separately and managed with sharper focus.
Pricol is an Indian automotive components manufacturer, and the coverage initiation highlights the company's positioning across traditional and emerging mobility product lines, particularly digital instrument clusters and EV-related components, alongside its expanding plastics vertical. Coverage initiations by brokerages typically draw investor attention to lesser-followed mid-sized companies, and the stock's rise on the announcement reflects that dynamic.
Investors tracking the stock will likely watch the progress of the proposed demerger, execution on order wins from global customers, and the pace of growth in digital cluster and EV-related revenues over the coming quarters.
The original report was published by Economic Times Markets.
