Belrise shares have reasonable valuations, re-rating triggers; Investec projects 29% upside

Belrise Industries Ltd., the automotive components manufacturer, is currently trading at reasonable valuations and has multiple re-rating triggers, brokerage firm Investec wrote while initiating coverage on the stock on Wednesday, September 17.

Investec initiated coverage on Belrise with a "buy" recommendation and a price target of ₹185, which implies a potential upside of 29% from current levels. That would mean a return of over 100% from the issue price of ₹90 per share.

Belrise Industries focuses mainly on two-wheeler auto ancillary products and is well placed for growth, as it expands its OEM tie-ups, and rolls out new products and improves its Average Selling Price via the premiumisation drive, Investec wrote in its note.

The brokerage also believes that a strong order book, improved technical capabilities and entry into the Japanese markets should provide a significant leg up to the company's four wheeler business.

Belrise's four-wheeler revenue share will increase to 14% by financial year 2028 from 9% currently, according to Investec, as the company broadens its Total Addressable Market (TAM) and spur a potential valuation re-rating.

Net profit for Belrise Industries is likely to grow at a Compounded Annual Growth Rate (CAGR) of 30% over financial year 2025-2028, as its operating performance is amplified by deleveraging, Investec wrote, adding that EBITDA will grow at a 12% CAGR during the same period.

The proposed transfer of Belrise's related-party entities into the company should simplify the company's group structure and also prove to be value accretive, adding to its re-rating drivers, as per the Investec note.

At 19 times financial year 2027 Earnings Per Share (EPS) estimates, Belrise trades at "reasonable" valuations, the brokerage said.

Investec has become the third analyst to have coverage on Belrise Industries and all three now have "buy" recommendation on the stock.

Shares of Belrise Industries ended 2.3% lower at the lowest point of the day on Tuesday at ₹144.81. The stock is up 50% so far in 2025.