Buy ASK Automotive; target of Rs 730: Choice Institutional Equities

Moneycontrol • 1 day ago

Original source

Key Investment Pillars

  • ASK Automotive has delivered record Q2FY27 performance, with revenue and EBITDA growing 47.5% and 30.2% YoY, respectively, driven by strong growth across segments.
  • The company has commenced commercial supplies of HPDC alloy wheels to a leading Japanese OEM, with expected revenue of INR 800 Mn in FY27E and orders worth INR 2,400 Mn for FY28E.
  • EV revenue contribution has increased to 5.9% in H1FY27, with EV business growing 98% YoY, and the management expects 2W EV penetration to reach 20% over the next two years.
  • The company plans capex of INR 7,000 Mn in FY27E and INR 5,000 Mn in FY28E, supporting capacity expansion and new product opportunities.

Thesis Validation Checklist

  • Investors should watch for sustained above-industry growth, driven by premiumisation, increasing content per vehicle, and EV adoption.
  • The progress of HPDC alloy wheel commercialisation and export growth should be monitored.
  • EV revenue contribution and 2W EV penetration should be tracked to validate the thesis.
  • The company's ability to maintain stable or improving EBITDA margins despite higher aluminium prices and increasing contractual labour costs should be observed.