Belrise Industries Eyes Mid-Teens Growth Over Next Three Years, Ramps Up Four-Wheeler Expansion

Following a successful stock market debut in May, automotive components manufacturer Belrise Industries is targeting significant expansion in the four-wheeler segment. The company is also working toward simplifying its corporate structure to unlock further value, according to Promoter Sumedh Badve.

“Right now, our four-wheeler contribution to revenues is fairly small—at about 12% to 13%. The four-wheel industry is about three times the size of the two-wheeler industry. So, there's a large opportunity for growth,” he told NDTV Profit on Wednesday.

The automotive component manufacturer wants to replicate the success it has seen so far in the two-wheeler business in the four-wheeler segment. “Our economies of scale achieved a market leadership position in the two-wheeler industry. We would like to believe that we can replicate that in the four-wheel industry,” he added.

On being asked about growth expectations in terms of compound annual growth rate for the top line and bottom line over the next three years, Badve said the company is expected to “grow in the mid-teen space with stable margins."

This growth projection aligns with Jefferies’ outlook. The brokerage expects Belrise Industries to deliver a CAGR of 12% in revenue and 18% in earnings per share from FY25 to FY28.

Jefferies initiated coverage on the firm on Tuesday with a ‘buy’ rating and a target price of Rs 135 per share, indicating a potential upside of 31%. 

"Belrise is expanding its 4W portfolio, including proprietary products such as cross-beams and chassis systems, and is aiming to double its 4W revenues in 2-3 years," Jefferies said.

Badve confirmed that the company is working toward simplifying its group structure. Jefferies indicated that such a move could potentially boost valuations further.

“We have some of our dedicated suppliers, which are group companies, who are looking to simplify the structure and get it under one roof and we expect that to happen in due course,” he said. 

Badve noted that the company was “transitioning from a traditional tier one supplier to a tier 0.5 supplier, where we're even more deeply entrenched with our customers, which are the OEMs (original equipment manufacturers).”

“I think it comes with a lot of trust. It's built on a legacy of having worked with OEMs over multiple decades and, ultimately, when you're getting that deeply entrenched with an OEM, the customer essentially wants you to be an extension of their facility,” he added.

Shares of Belrise Industries were trading 2.68% higher at Rs 115.41 apiece on the NSE at 11:55 a.m., compared to a flat benchmark Nifty 50.