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ICICI Securities Report
ASK Automotive Ltd.'s Ebitda margin surged 115 basis points QoQ to 11.7% (our securities: 11.8%) led by operating leverage. Ebitdam will likely scale higher, to ~12–13% in FY25–26E, driven by more exports in the mix and not only superior operating leverage with the Karoli (Rajasthan) plant already ramping up since Q1, but also incremental benefits of incentives from the plant.
We envisage ASK delivering ~22% revenue compound annual growth rate (ex-wheel assembly) over FY24–26E driven by a CAGR of ~11% in the braking system business and ~27% in the aluminium light-weighting business amid the expectation of ~8% domestic two-wheeler market CAGR.
Maintain Buy with a revised target price of Rs 483 (earlier Rs 447), implying 25 times FY26E earnings; change in target price is driven by earnings rollover.
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