Shriram Pistons & Rings Ltd Share Price Target 2024, 2025 to 2030

Shriram Pistons & Rings Ltd stands as a prominent player in the automotive manufacturing landscape, specializing in the production of pistons, piston pins, piston rings, and engine valves. With a diverse product portfolio encompassing Pistons, Piston Pins, Piston Rings, Engine Valves, and Cylinder Liners, the company has positioned itself as a key contributor to the automotive industry.

A pivotal development in the company’s trajectory was the strategic acquisition of businesses for BS-6 models in FY20, emphasizing the integration of cutting-edge technology and stringent quality standards. This move not only enhanced the market share with key OEMs in India but also facilitated a seamless product ramp-up for BS-6 models in FY21, meeting the satisfaction of OEMs.

Geographically, the company maintains a robust presence, with 82% of its business catering to the domestic market and the remaining 18% dedicated to exports. Shriram Pistons & Rings Ltd boasts an extensive global footprint, exporting to renowned OEMs in the UK, Germany, Austria, Italy, China, USA, Spain, Romania, Turkey, Japan, Thailand, Brazil, Indonesia, and Mexico.

The clientele of Shriram Pistons & Rings Ltd reads like a who’s who in the automotive industry, including Maruti, Mahindra, Honda, Ford, Nissan, Tata, Bajaj, Hero, TVS, Yamaha, Ashok Leyland, Daimler, VE Commercial, Swaraj, and more. The company’s global reach extends to esteemed OEMs such as Jaguar, Land Rover, JCB, BMW Motorrad, Volkswagen, Rotax, ZF Wabco, Yanmar, and others.

Operating from three state-of-the-art manufacturing plants situated in Uttar Pradesh and Rajasthan, Shriram Pistons & Rings Ltd has established assembly units in Gurugram, Pune, Hosur, Becharji (Gujarat), and Sahibabad. The company’s commitment to technological excellence is reinforced by collaborations with industry leaders like KS Kolbenschmidt GmbH, Germany; Honda Foundry Co. Ltd, Japan; Riken Corporation, Japan; and Fuji Oozx Inc, Japan.

In FY19, a significant milestone was achieved with the amalgamation of Shriram Pistons & Rings Ltd with Shriram Automotive Product Ltd (SAPL), a promoter group company. This strategic move involved issuing non-participating, non-convertible cumulative preference shares to SAPL’s equity holders.

With a keen strategic focus, Shriram Pistons & Rings Ltd is actively engaged in partnering with key OEMs to expand its market share through innovative technology solutions. Additionally, the company is directing efforts towards enhancing its distribution network in the aftermarket segment, showcasing a holistic approach to sustained growth and industry leadership.

1. Shriram Pistons & Rings Ltd witnessed a notable 16.66% surge in revenue, reaching ₹774.63Cr in Q2 2023-2024 compared to the same period last year.
2. The company achieved a remarkable 5.32% quarterly growth, reflecting a dynamic and positive performance over the last three months.
3. Net profits soared by an impressive 55.73%, reaching ₹113.65Cr in Q2 2023-2024 compared to the corresponding period in the previous year.
4. Demonstrating sustained growth, the company experienced an 11.48% increase in net profits on a quarterly basis.
5. Shriram Pistons & Rings Ltd showcased robust net profit margins, witnessing a substantial 33.49% rise since the same period last year.
6. On a quarterly growth basis, the net profit margins experienced a commendable 5.84% increase, further strengthening the company’s financial position.
7. These financial indicators underscore the company’s resilience and strategic acumen in navigating market dynamics.
8. The Q2 FY2024 performance highlights Shriram Pistons & Rings Ltd’s ability to sustain growth and deliver value to its stakeholders.

Debtor Days: The declining trend from 66 days in FY2019 to 55 days in FY2023 indicates a more efficient and prompt collection of receivables. This improvement enhances the company’s cash flow and liquidity, contributing to a healthier financial position.

Inventory Days: The gradual reduction in inventory days from 184 in FY2019 to 113 in FY2023 reflects effective inventory management. This shortened period suggests faster inventory turnover, preventing overstocking and potential obsolescence.

Days Payable: The decline in days payable from 144 days in FY2019 to 115 days in FY2023 signifies that the company is managing its payables more efficiently. This can lead to better relationships with suppliers and improved cash flow.

Cash Conversion Cycle: The shorter cash conversion cycle, decreasing from 107 days in FY2019 to 53 days in FY2023, indicates an enhanced ability to convert sales into cash. This efficiency is crucial for meeting short-term obligations and investments.

Working Capital Days: The decreasing trend in working capital days, from 64 in FY2019 to 49 in FY2023, suggests a more streamlined and effective working capital management. This leads to improved operational efficiency and financial health.

Return on Capital Employed (ROCE): The rising ROCE, increasing from 20% in FY2019 to 25% in FY2023, demonstrates that the company is generating higher returns on the capital employed. This signifies effective capital utilization and improved profitability.

Overall Analysis: The ratio analysis indicates that Shriram Pistons & Rings has not only strengthened its liquidity position and operational efficiency but also achieved higher profitability through effective capital management. These positive trends bode well for the company’s financial health and strategic decision-making.

The anticipated share price for Shriram Pistons & Rings in 2024 displays a promising outlook, with monthly variations shaping its trajectory. In January, the expected maximum and minimum prices are ₹1,708.05 and ₹1,485.26, respectively. This trend continues with fluctuations in subsequent months, reaching a peak of ₹1,953.29 and a low of ₹1,698.52 by December.

The monthly fluctuations in prices are subject to multiple factors, including financial performance, market dynamics, and industry trends. Analysts foresee potential growth, especially evident in the ascending monthly maximum prices. Investors may identify strategic entry points during periods of lower prices, such as February’s expected range of ₹1,742.91 to ₹1,515.57.

This nuanced analysis reflects the dynamic nature of stock prices, with each month presenting an opportunity for investors to align their strategies with the evolving market conditions. The expected prices provide a roadmap for navigating potential highs and lows throughout the year.

The projected share price targets for Shriram Pistons & Rings in 2025 reveal a dynamic landscape, showcasing potential highs and lows throughout the year. In January, the expected maximum and minimum prices are ₹1,992.36 and ₹1,532.58, respectively, setting the tone for the months ahead.

As the year unfolds, each month presents a distinctive outlook. February anticipates a range of ₹2,043.45 to ₹1,571.88, with subsequent months displaying incremental increases. Investors may find strategic entry points during months with lower price ranges, such as May’s expected ₹2,020.88 to ₹1,554.53.

These projections, based on a thorough analysis of market dynamics and historical trends, provide investors with a roadmap for navigating the potential fluctuations in Shriram Pistons & Rings’ stock prices throughout 2025. Understanding the expected maximum and minimum prices for each month empowers investors to make informed decisions aligned with their financial goals.

In projecting Shriram Pistons & Rings’ share price targets from 2026 to 2030, a meticulous analysis indicates that the expected price will likely follow a discernible trajectory. In 2026, the maximum price is expected to reach ₹2,500.41, driven by strategic advancements and market dynamics. The minimum price, projected at ₹1,750.28, reflects potential fluctuations. Subsequent years show a progressive growth trend with the expected maximum price reaching ₹4,334.04 in 2030, propelled by sustained innovation and market expansion. Simultaneously, the expected minimum price is forecasted to be ₹3,033.83 in 2030, indicating a resilient market stance.

These projections are grounded in historical performance, technological advancements, and strategic initiatives. Investors should be astute in comprehending that the expected price will be influenced by multifaceted factors, necessitating a nuanced investment approach attuned to the evolving market landscape.

Over the past half-decade, Shriram Pistons & Rings has demonstrated remarkable financial resilience and growth. The company’s sales trajectory tells a story of consistent upward momentum, surging from ₹1,955 crore in March 2019 to ₹2,805 crore in the trailing twelve months ending March 2023, marking an impressive 43% increase. A key contributor to this success is the company’s adept management of operating expenses, reflected in the escalating operating profit margins, which reached 20% in the latest period. This underscores Shriram Pistons & Rings’ commitment to operational efficiency and cost-effectiveness.

The net profit has witnessed substantial growth, more than doubling from ₹138 crore in March 2019 to ₹381 crore in the trailing twelve months, showcasing the company’s ability to convert its revenue into robust bottom-line results. Earnings per share (EPS) have seen a significant increase, reaching ₹86.65 in the latest period, indicative of the company’s profitability per outstanding share. Shriram Pistons & Rings’ consistent dividend payout policy, coupled with prudent financial management in terms of interest, depreciation, and tax efficiency, positions it as a robust player in the automotive industry, attracting investors with its financial stability and growth potential.

FAQS

1. What is the market capitalization of Shriram Pistons & Rings Ltd?

• Shriram Pistons & Rings Ltd currently holds a market capitalization of ₹6,878 Crores.

2. What is the current stock price of Shriram Pistons & Rings Ltd?

• The current stock price for Shriram Pistons & Rings Ltd is ₹1,561.

3. What are the 52-week high and low prices for Shriram Pistons & Rings Ltd’s stock?

• The stock’s 52-week high is ₹1,665, and the low is ₹491.

4. What is the Price to Earnings (P/E) ratio for Shriram Pistons & Rings Ltd?

• Shriram Pistons & Rings Ltd has a Price to Earnings (P/E) ratio of 18.1.

5. What is the Book Value per share for Shriram Pistons & Rings Ltd?

• The Book Value per share for the company is ₹394.

6. What is the Dividend Yield for Shriram Pistons & Rings Ltd?

• The Dividend Yield for Shriram Pistons & Rings Ltd is 0.32%.

7. What is the Return on Capital Employed (ROCE) for Shriram Pistons & Rings Ltd?

• Shriram Pistons & Rings Ltd reports a Return on Capital Employed (ROCE) of 24.7%.

8. What is the Return on Equity (ROE) for Shriram Pistons & Rings Ltd?

• The Return on Equity (ROE) for the company is 20.8%.

9. What is the Face Value of Shriram Pistons & Rings Ltd’s stock?

• The Face Value of Shriram Pistons & Rings Ltd’s stock is ₹10.0.

Investing in Shriram Pistons & Rings (SPRL) presents a compelling opportunity backed by robust financials and a strong position in the auto ancillaries sector. With a current market price of ₹1561.40, a P/E ratio of 18.09, and a market capitalization of ₹6877.94 crore, SPRL stands as an attractive choice in the competitive landscape.

In a peer comparison within the auto ancillaries sector, SPRL demonstrates its financial prowess. The company’s net profit in the last quarter increased by an impressive 54.84%, reaching ₹113 crore, showcasing its ability to capitalize on market demands effectively. This growth surpasses the median values for companies in the sector, positioning SPRL as a high-performing player.

The company’s consistent sales growth over the past decade, with a compounded annual growth rate (CAGR) of 10%, is indicative of its ability to navigate market dynamics successfully. Moreover, SPRL’s return on equity (ROE) has seen a positive trajectory, reaching 25% in the last year, reflecting efficient utilization of shareholders’ funds.

Examining the quarterly results, SPRL’s operating profit margin (OPM) has consistently improved, reaching 21% in the latest period. This not only outperforms many peers but also underscores the company’s commitment to operational efficiency and profitability.

From a broader perspective, SPRL’s compounded profit growth over the last ten years stands at an impressive 20%, demonstrating sustained financial performance. The stock has also shown strong price appreciation, with a Compound Annual Growth Rate (CAGR) of 74% over the past three years.

In summary, Shriram Pistons & Rings emerges as a strong contender for investment consideration, backed by its stellar financial performance, competitive positioning, and growth potential in the auto ancillaries sector. As always, investors should conduct thorough research, considering market conditions and individual risk tolerance, before making investment decisions.