Pricol Share Price Target at Rs 935: Axis Securities
Axis Securities has kept its BUY call on Pricol Ltd with an unchanged target price of Rs 935, about 28% above the Nov. 5 closing price of Rs 728. The auto-component maker beat the brokerage's estimates on every line in the September quarter: revenue rose 35% year on year to Rs 1,356 crore, EBITDA grew 29% to Rs 153 crore and adjusted profit climbed 33% to Rs 85 crore. A first-ever spike in chip, circuit-board and currency costs trimmed margins, and the company is negotiating price increases with carmakers. A Rs 350 crore plastics expansion and a two-way demerger due by April 2027 support the longer-term case.
Q2 Signal Check: Every Line Lit Green
R1 · REVENUE
Rs 1,356 cr
+34.7% YoY · 12.1% above est.
R2 · EBITDA
Rs 153 cr
+29.3% YoY · 14.7% above est.
R3 · MARGIN
11.2%
-47 bps YoY · 25 bps above est.
R4 · ADJ. PROFIT
Rs 85 cr
+33.2% YoY · 18.2% above est.
Growth ran well ahead of the market. Revenue rose 22.7% from the June quarter, while domestic auto production grew about 20% and two-wheeler demand rose about 35%. Management said all three divisions, Driver Information Systems (DIS), the fuel and pump business (ACFMS) and Plastics, grew about 35%, helped by festive buying and market-share gains.
Margins held up despite cost pressure. EBITDA margin slipped 47 basis points from a year earlier but still beat Axis's estimate. Adjusted profit also got help from higher other income.
| Rs crore | Q2FY27 | Q1FY27 | Q2FY26 | YoY | Axis est. |
|---|---|---|---|---|---|
| Net sales | 1,356 | 1,105 | 1,007 | 34.7% | 1,209 |
| Raw materials | 971 | 775 | 699 | 38.8% | 855 |
| EBITDA | 153 | 124 | 118 | 29.3% | 133 |
| EBITDA margin | 11.2% | 11.3% | 11.7% | -47 bps | 11.0% |
| Profit before tax | 112 | 87 | 85 | 32.5% | 94 |
| Adjusted PAT | 85 | 67 | 64 | 33.2% | 72 |
| EPS (Rs) | 6.99 | 5.5 | 5.3 | 33.2% | 5.9 |
Source: Axis Securities. Profit before tax is shown where the report's table prints it as "Exceptional Item"; see Editor's Note.
Three Divisions, One Speed
● IC-1 · DIS
Driver information systems
Next-generation TFT instrument clusters for the Bajaj Pulsar raised value per vehicle. Pricol also has a multi-year deal to supply LCD clusters to Honda.
● IC-2 · ACFMS
Fuel pumps and exports
Pricol is one of India's largest makers of two-wheeler fuel pumps. Exports of heavy-duty water pumps to Caterpillar in the U.S. are rising. The range sells to both petrol and electric vehicle makers.
● IC-3 · PLASTICS (P3L)
Running at full load
The unit earned Rs 312 crore in Q2 at a 9.9% EBITDA margin, after about Rs 952 crore in FY26. It is running at nearly 100% capacity.
The Bill of Materials Got Pricier
Normal swings in raw materials and currency are passed on through quarterly price-indexation clauses. What hurt this quarter was a set of first-time cost increases since Q1FY27 that those clauses do not cover. Management put the hit at 1% to 2% of EBITDA, depending on how much electronics each product uses.
BOM REV. B · COST DRIVERS FLAGGED SINCE Q1FY27
Price talks are under way. Pricol is negotiating with carmakers to pass on the extra cost and expects to finish in the December quarter. Management does not expect to recover all of it. Axis sees any recovery as a quick boost to margins, and its model has full-year FY27 margin at 11.25% before a rebound to 12.4% in FY29.
Plastics: Maxed Out, Now Expanding
Load meter · P3L utilisation
0% ··· 80% comfort line ··· ~100% today
Rs 350 crore capex over six quarters, targeting 3.0 to 3.25 times fixed-asset turnover. At those ratios, the new capacity could add roughly Rs 1,050 crore to Rs 1,140 crore a year in revenue once it is fully running (TopNews calculation).
Connector J1 · plastics customers
P2 Ather Energy
P3 Royal Enfield
P4 Autoliv
P5 Honda Motorcycles · NEW
New orders from Honda Motorcycles start contributing from FY28. Commercial production begins in the second half of FY27, and most of the extra revenue arrives in FY28.
Better use of capital. Axis expects return on equity of about 21% to 22% through FY29 and sees net debt turning into net cash of about Rs 150 crore by then. That would happen even with capex of Rs 350 crore in each of FY27 and FY28.
One Board, Two Companies
Timeline. The demerger application has been filed, and final orders are expected within the next couple of quarters. Pricol began separating operations internally in October 2026 and aims to run the two as fully separate businesses from April 1, 2027. Axis says the split should sharpen capital allocation and make each business easier to value on its own.
Estimates Nudged Higher
| Rs crore | FY26A | FY27E | FY28E | FY29E |
|---|---|---|---|---|
| Revenue | 3,964 | 4,974 | 5,722 | 6,826 |
| EBITDA | 469 | 560 | 666 | 844 |
| PAT | 251 | 307 | 365 | 487 |
| EPS (Rs) | 20.6 | 25.2 | 30.0 | 39.9 |
| PAT revision vs. old | – | +6.7% | +1.2% | +2.5% |
| P/E (x) | 35.4 | 28.9 | 24.3 | 18.2 |
Source: Axis Securities. Revenue estimates rose 4.9%, 2.3% and 2.2% for FY27E-FY29E; EBITDA estimates rose 5.4%, 1.2% and 2.2%.
How Axis Gets to Rs 935
> run valuation --basis FY29E
EPS FY29E ........ Rs 39.9
Multiple ......... 23x 24x
23 x 39.9 ........ ~Rs 918
Printed TP ....... Rs 935
Upside vs Rs 728 . 28% █
Lower multiple, same target. Axis cut its multiple to 23 times FY29 estimated earnings from 24 times. Higher estimates made up for the cut, so the target stays at Rs 935. At the current price, the stock trades at about 18 times FY29 earnings and 10.3 times FY29 EV/EBITDA.
Why Axis likes it. The brokerage cites five reasons: more premium digital and TFT clusters, strong demand across divisions, rising exports and more customers such as Honda Motorcycles, room for margins to recover, and the new plastics capacity plus the demerger.
Shareholding. Promoters hold a steady 38.5%. Foreign investors cut their stake to 14.0% in September from 16.9% in March, and retail and other holders picked up the shares.
Handle With Care: Key Risks
Editor's Note · Figures that do not match in the report
1. Q2 EBITDA margin. The report gives three numbers: 11.25% in the rationale, 11.82% in the outlook and 11.2% in the tables. Rs 153 crore on Rs 1,356 crore works out to about 11.3%. The 11.25% figure is the same as the FY27 full-year estimate. We use the table.
2. Target multiple. The valuation section first calls 24 times FY29E reasonable, then applies 23 times. 23 times Rs 39.9 equals about Rs 918, so the Rs 935 target implies roughly 23.4 times.
3. Quarterly table labels. The results table is headed "Y/E Dec" although Pricol's year ends in March. The Rs 112 crore "Exceptional Item" line is actually profit before tax: Rs 112 crore minus Rs 27 crore tax gives the Rs 85 crore profit. The ratio rows also look shifted by one line. For example, the 28.4% shown as raw materials is really the gross margin, and the 6.8% shown as tax is other expenses as a share of sales.
4. Capex timeline. The plastics expansion is described as "over the next 6 quarters" in one place and "over the next 12 months" in another.
5. Dividend. The ratio table shows a 0.8% dividend yield for FY28E, but the cash-flow statement shows no dividend in any year.
Sources
Axis Securities, Pricol Ltd Q2FY27 Result Update, Nov. 6, 2026; analyst Sanchit Karekar. Company disclosures and earnings-call commentary as cited in the report. Market data as of Nov. 5, 2026: market capitalisation Rs 8,878 crore, 12.2 crore shares, six-month average daily volume about 3.14 lakh shares.
Disclaimer: This TopNews Stock Research report is based on a brokerage research report and is for information only. It is not investment advice. Stock market investments are subject to market risks; consult a registered financial adviser before making investment decisions.
