Dhoot Transmission Ltd. has received a 'buy' rating from Nomura on coverage initiation, as the brokerage expects the company to be a major beneficiary of India's EV growth story.
Nomura has set a price target of Rs 1,800 for the company, implying an upside to its last closing price of Rs 1,469.95.
The brokerage noted that Dhoot is well-positioned to gain as India's EV growth story reaches an inflection point. The future holds a major opportunity fir suppliers of vehicle electrical systems and components, according to Nomura.
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Dhoot, one of the country's largest wiring harness manufacturers, is well placed to capitalise on this shift through its leadership in the two-wheeler segment and its expanding presence in EV-focused components.
India's electric two-wheeler penetration could rise from 6.6% in FY26 to 27% by FY31, while passenger vehicle EV penetration could rise to 14% over the same period, the brokerage highlighted.
Other businesses like the two-wheeler wiring harness industry and non-wiring harness businesses are also expected to register a sharp growth.
At this juncture, Nomura sees Dhoot's EV-linked revenue contribution doubling from around 24% in FY26 to nearly 48% by FY29. Growth is likely to be supported by customer additions in the EV battery-pack segment as well as volume ramp-up in EV components.
Currently, the company commands an estimated 41% share of the two-wheeler and three-wheeler wiring harness market, with about 77% of its revenue coming from the segment.
Growth Estimates
Nomura forecasts Dhoot to deliver a 27% revenue CAGR and a 28% earnings per share CAGR during FY26-FY29, while maintaining EBITDA margins in the range of 15.2%-15.7%.
The brokerage also outlined the company's focus on backward integration and localisation under Managing Director Rahul Dhoot, which it believes will support profitability as the business scales.
The valuation for Dhoot is attractive as it trades at 32 times FY29 estimated earnings and view, has a projected return on invested capital of 22%, and the long-term growth opportunity emerging from India's EV transition.
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