Jefferies has initiated coverage on Belrise Industries Ltd. with a 'Buy' rating and a price target of Rs 135, indicating a 31% upside potential. The positive outlook is driven by strong growth prospects and attractive valuations.
Belrise Industries is a leading player in the two-wheeler metal component market in India, holding approximately 24% market share in key product categories such as chassis and exhaust systems. The company derives about 67% of its revenues from 2W components, 9% from four-wheeler components, and 20% from commodity trading. Jefferies notes, "Belrise is one of India's leading 2W metal component players with a significant market share in its key product categories."
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Jefferies projects a healthy 12% revenue compound annual growth rate over FY25-28, driven by rising 2W demand, industry premiumisation, and expansion in 4Ws and exports.
The firm also expects a 12% Ebitda and 18% earnings per share compound annual growth over the same period, along with deleveraging.
"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 highlights.
Jefferies finds Belrise's Fiscal Year 2026 price-to-earnings ratio of 18 times attractive due to strong growth prospects. The stock is benchmarked to the sector average of 25 times Enterprise Value to Earnings Before Interest, Taxes, Depreciation, and Amortisation for Fiscal Year 2027.
The brokerage noted that, however, risks include weaker two-wheeler demand, reliance on top customers, and potential adverse related-party events.
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