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ICICI Securities Report
ASK Automotive Ltd.'s Ebitda margin remained steady QoQ at 10.5%, as a slight inflation in input cost was balanced by a marginal improvement in operating leverage. Ahead, we see Ebitdam scaling up to ~12–13% in FY25–26E driven by higher mix of exports, superior operating leverage with the Karoli (Rajasthan) plant already ramping up since Q1 and the incremental benefit of incentives from the Karoli plant.
We expect ASK to deliver ~22% revenue CAGR (excluding 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 expectation of ~8% domestic two-wheeler market CAGR.
Retain Buy and target price of Rs 405, implying 24 times FY26E earnings. We build in a combined capex of Rs 5.5 billion for FY25–26E, including ASK's Karnataka plant capex.
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