Synopsis: Emkay Global recommends a Buy on Shriram Pistons & Rings with a ₹4,650 target, citing strong diversification, 8-10% industry outperformance, expanding EV businesses, and robust FY26-28 earnings growth prospects.
This Auto Ancillary Stock, engaged in manufacturing pistons, piston rings, piston pins, engine valves, EV components, and precision plastic parts for automotive and industrial applications, is in focus after Emkay Global Financial Services gave a target of Rs. 4,650, which has an upside potential of 53.51 percent.
With a market capitalization of Rs. 13,528.36 crore, the shares of Shriram Pistons & Rings Limited closed at Rs. 3,029 per equity share, up nearly 7.50 percent from its previous day’s close price.
Target & Rationale
Emkay Global Financial Services, a prominent brokerage firm, has recommended a “Buy” call on Shriram Pistons & Rings Limited with a target price of Rs. 4,650 per share, indicating an upside potential of 53.80 percent from its previous day’s close price.
Emkay Global Financial Services has maintained a Buy rating on Shriram Pistons & Rings Limited (SPRL), supported by strong growth prospects and diversification. The company expects to outperform the auto industry by about 8-10 percent, driven by its diversified product portfolio and steady demand across segments. SPRL currently holds around 50 percent market share in its core segments and aims to increase it further through capacity expansion and export growth.
The company has invested nearly Rs. 6-7 billion in the last five years to strengthen its legacy business and improve technology capabilities. It continues to benefit from opportunities in traditional engine technologies such as CNG, hydrogen, and hybrid engines, along with growth in exports and aftermarket demand. Limited capacity addition by competitors is also expected to help SPRL gain market share.
New business segments such as EV components, precision plastics, interiors, and lighting are growing rapidly and improving margins. Non-ICE products are expected to contribute about 35 percent of revenue by FY27, supporting long-term growth. Emkay expects 26 percent revenue growth, 22 percent EBITDA growth, and 20 percent EPS growth during FY26-28, with healthy return ratios above 20 percent.
Domestic Presence:
Shriram Pistons & Rings Limited operates five assembly units across key locations in India, including Gurugram and Bhorakalan in Haryana, Karsanpura in Gujarat, Pune in Maharashtra, and Hosur in Tamil Nadu. With a strong network of over 1,200 business partners, the company ensures efficient manufacturing and supply across different regions, supporting its operations and customer requirements nationwide.
Export Presence:
Shriram Pistons & Rings Limited has a strong export presence across more than 45 countries and 5 continents, making it a leading exporter of pistons, piston rings, piston pins, and engine valves.
In FY25, Europe accounted for 31 percent of exports, followed by South America (26 percent), the Middle East (18 percent), North America (10 percent), Asia Pacific (13 percent), and Africa (2 percent), showing a well-diversified global export mix.
Client Base:
Shriram Pistons & Rings Limited serves a wide range of customers across the automotive and industrial sectors. Its major clients include Tata Motors, Mahindra, Hyundai, Honda, Suzuki, TVS, Yamaha, Renault, Volkswagen, Isuzu, Bajaj Auto, Royal Enfield, and Ashok Leyland.
The company also works with global component makers such as Denso, Mitsubishi Electric, Aisin, Yazaki, Panasonic, and Schaeffler, along with Indian Railways and industrial customers.
Company Overview:
Shriram Pistons & Rings Limited (SPRL) is a leading Indian auto component manufacturer engaged in producing pistons, piston rings, piston pins, and engine valves for automotive and industrial applications. The company supplies products to major automobile manufacturers across passenger vehicles, commercial vehicles, two-wheelers, and tractors.
SPRL has a strong manufacturing presence in India and exports its products to more than 45 countries across 5 continents, making it a well-known global supplier. The company has expanded beyond traditional engine components into new areas such as EV components, precision plastic parts, and automotive interior solutions. SPRL serves a wide range of customers, including major automobile and industrial companies.
Recent Quarter Results:
Coming into financial highlights, Shriram Pistons & Rings Limited’s revenue has increased from Rs. 848 crore in Q3 FY25 to Rs. 1,023 crore in Q3 FY26, which has grown by 20.64 percent. The net profit has also grown by 4.13 percent from Rs. 121 crore in Q3 FY25 to Rs. 126 crore in Q3 FY26.
Shriram Pistons & Rings Limited’s revenue and net profit have grown at a CAGR of 17.18 percent and 47.86 percent, respectively, over the last five years.
In terms of return ratios, the company’s ROCE and ROE stand at 25.7 percent and 23.2 percent, respectively. Shriram Pistons & Rings Limited has an earnings per share (EPS) of Rs. 123, and its debt-to-equity ratio is 0.20x.
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