Dhoot Transmission is looking to strengthen its presence in the electric vehicle components market through expansion into battery packs, sensors, and controllers. Strong two-wheeler demand and rising EV adoption are expected to support its growth over the coming years. However, brokerages remain divided on the stock's prospects, with Jefferies maintaining a positive stance and Kotak remaining cautious about valuations and manufacturing costs.
Key Results Highlights (Cons, YoY)
- Net profit declined 0.3% YoY to Rs 117.8 crore from Rs 118.2 crore.
- Revenue increased 60.7% YoY to Rs 1,827 crore from Rs 1,137 crore.
- EBITDA rose 31.2% YoY to Rs 261.7 crore from Rs 199.5 crore.
- EBITDA margin contracted to 14.3% from 17.5%.
Jefferies: Maintains Buy
Jefferies raised its target price on Dhoot Transmission to Rs 1,750 from Rs 1,730, while maintaining its Buy rating.
The brokerage expects strong two-wheeler demand and increasing electric vehicle adoption. The brokerage expects the growth to support a 29% earnings per share compound annual growth rate over fiscal 2026-29.
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The company's expansion into battery packs, sensors, and controllers is expected to support expansion of the business, as the company has increased its fiscal 2027 capital expenditure guidance to Rs 750 crore.
Jefferies expects copper cost pass-through, improving Multilink profitability, and normalising employee stock option costs to support margin recovery.
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Kotak: Maintains Sell
Kotak maintained its Sell rating on Dhoot Transmission with a target price of Rs 1,420, in stark contrast to Jefferies.
The brokerage expects electric two-wheeler adoption and higher component content to drive a 26% revenue compound annual growth rate over fiscal 2026-29. Kotak also highlighted that battery packs and electric vehicle components could offer diversification opportunities, while the Multilink acquisition expands the company's product capabilities.
Kotak expects margins to remain around 15% to 15.5% over fiscal 2028-29. However, it remains cautious about the company's expensive valuations and manufacturing costs.
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