JM Financial Institutional Securities has initiated coverage on Belrise Industries (BIL) with a “Buy” rating and a target price of INR 215, implying a 28% upside from the current market price of INR 168. The brokerage’s optimism is rooted in BIL’s leadership in the domestic two-wheeler (2W) metal-component segment, rapid expansion into four-wheelers (4Ws), and the structural content-per-vehicle (CPV) upcycle sweeping India’s auto-component industry.
Industry Landscape and Macro Context
India’s auto-component industry stands at the cusp of a multi-year transformation driven by three converging forces — premiumisation, electrification, and localisation. JM Financial projects the domestic component market to expand from INR 5.9 lakh crore in FY25E to INR 9.4 lakh crore by FY30E, a CAGR of 9.7%.
Within this, the metal-based component segment — Belrise’s key domain — is expected to grow faster, at 11–13% CAGR, powered by higher safety and performance content in both ICE and EV vehicles.
Government policy tailwinds strengthen this outlook:
- PLI Scheme for Auto Components: INR 25,938 crore outlay aimed at incentivising localised, high-tech component manufacturing.
- FAME II and State EV Policies: Accelerating OEM adoption of electric 2Ws and 3Ws.
- Local Value Addition Drive: OEMs increasingly favour Tier-1 suppliers with system-integration capabilities and local supply chains — a niche Belrise is actively cultivating.
These structural factors underpin JM Financial’s thesis that Indian Tier-1 suppliers will see double-digit CPV growth over the next five years, outpacing OEM volume growth.
Segmental Deep Dive
Two-Wheelers: Core Strength with Expanding CPV
Belrise is the largest 2W sheet-metal component supplier in India, commanding an estimated 24% market share. It supplies chassis, swingarms, exhaust systems, and steering components to nearly all leading OEMs — Bajaj Auto, Honda Motorcycle & Scooter India (HMSI), Hero MotoCorp, and Royal Enfield.
Over FY16–25, the company’s 2W revenue CAGR of 11.5% far exceeded industry volume growth (1.4%), driven by both product addition and customer diversification. JM Financial estimates Belrise Industries’ 2W CPV to rise from INR 12,500 currently to INR 17,300 by FY30, driven by:
- Higher metal intensity in premium bikes (2.2× versus commuter models).
- Migration from individual components to welded assemblies and sub-systems.
- Entry into braking, filtration, and steering categories through recent acquisitions.
Even as EV penetration rises (6.8% YTD FY26), Belrise remains resilient, with 73% of its product portfolio powertrain-agnostic. It already supplies to leading e-2W OEMs and is developing EV-specific components such as controllers and chargers.
Four-Wheelers: The Next Growth Engine
While the 4W business currently contributes ~12% of manufacturing revenue, JM Financial expects it to double within 30 months, aided by the integration of H-One India and Mag Filters.
- H-One India Acquisition: Provides access to advanced high-tensile (up to 1,100 MPa) steel-processing capability and entry into Japanese OEM supply chains. Expected to lift CPV by ~60% (additional INR 15,000 per vehicle).
- Mag Filters: Adds filtration and emission-control components and strengthens relationships with Tier-1 global OEMs.
The Indian 4W (PV+LCV) metal-component market, estimated at INR 56,600 crore in FY25E, is projected to reach INR 87,700 crore by FY30E (9% CAGR). JM Financial expects Belrise Industries’ 4W revenues to grow at 24% CAGR over FY25–28E, raising its contribution to ~15% of manufacturing turnover.
Commercial Vehicles and EV Platforms
Belrise is selectively expanding in CV and e-mobility components, targeting parts with high engineering intensity. It has already secured chassis system orders for EV 3Ws and structural assemblies for CVs, both offering stronger margin profiles than legacy 2W parts.
Financial & Valuation Analysis
JM Financial’s base-case model forecasts 13% revenue CAGR (FY25–28E) and 29% PAT CAGR, supported by product diversification, margin recovery, and reduced interest burden post-deleveraging.
Key Financial Metrics
| Metric | FY25E | FY28E | CAGR (FY25–28E) |
|---|---|---|---|
| Revenue | 8,000 | 11,800 | 13% |
| EBITDA Margin | 11.6 | 12.7 | +110 bps |
| Adj. PAT | 450 | 770 | 29% |
| ROIC (%) | 12.2 | 14.8 | – |
| ROE (%) | 10.1 | 12.3 | – |
| Net Debt / Equity (X) | 0.3 | 0 | Deleveraged |
EBITDA margin expansion is driven by:
- Manufacturing mix improvement (higher 4W share).
- Lower trading-business contribution (currently 21% of revenue, 6% margin).
- Operating leverage as utilisation rises to 75–80%.
- Integration benefits from H-One and Mag Filters.
Valuation
At INR 168, the stock trades at 19× FY28E EPS, a steep discount to the peer average of 27× (Endurance, Uno Minda, Sona BLW). JM Financial values BIL at 25× FY28E EPS, implying a target price of INR 215.
| Company | FY28E P/E | FY28E EV/EBITDA | ROIC (%) |
|---|---|---|---|
| Belrise | 19 | 11.3 | 14.8 |
| Endurance Tech | 28 | 15.2 | 18.6 |
| Uno Minda | 27 | 14.8 | 16.9 |
| Sona BLW | 38 | 22.0 | 20.4 |
The valuation gap reflects Belrise’s relatively shorter listing history and lower 4W exposure. JM Financial expects the gap to narrow over the next 2 years as earnings visibility strengthens and the trading-business hive-off is executed.
Belrise Industries Post-IPO Performance
Belrise Industries launched its IPO in May 2025, raising approximately INR 2,150 crore through a full fresh issue. The offering received an overwhelming response from investors, recording a robust 41.3X subscription on the final day. The stock debuted with an 11.1% gain on the listing day.
The momentum, however, did not end there. Supported by strong fundamentals, Belrise Industries continued its upward trajectory post-listing, eventually touching an all-time high of INR 167.65 — representing an impressive ~86% appreciation over its allotment price of INR 90 per share.
Strategic Outlook and Catalysts
JM Financial identifies multiple re-rating catalysts for Belrise Industries over the next 12–24 months:
- Trading-Business Hive-Off: Badve Trading FZE (21% of revenue, 6% margin) is expected to be separated, enhancing group transparency and lifting consolidated EBITDA margin by 100–120 bps.
- Governance Simplification: Ongoing restructuring of related-party transactions — notably, the acquisition of Badve Autocomps Pvt Ltd — will improve disclosure quality and align with institutional investor expectations.
- Product-Mix Upgrade: Transition from individual components to integrated sub-systems positions Belrise as a Tier-0.5 supplier, increasing customer stickiness and CPV per model platform.
- Deleveraged Balance Sheet: Post-IPO proceeds have nearly eliminated net debt, giving Belrise Industries room for capex-driven expansion without financial strain.
- EV Penetration Tailwind: With 73% of its portfolio powertrain-agnostic, the company stands to benefit regardless of whether ICE or EV volumes dominate, particularly in structural and suspension components.
Risks to Monitor
- Heavy reliance on a single top 2W OEM (~35% of revenue).
- Potential regulatory changes such as mandatory ABS in sub-125cc motorcycles.
- Raw-material price volatility, though partial pass-through clauses mitigate exposure.
- Integration risk from acquisitions, particularly in margin management.
Final Words: A Tier-1 Supplier Ready for Re-rating
JM Financial’s coverage on Belrise Industries frames the company as a structural compounder in India’s auto-component landscape — a company steadily evolving from 2W dependency to a diversified, powertrain-agnostic systems supplier.
With solid double-digit earnings growth, balance-sheet strength, and improving mix quality, the brokerage sees Belrise’s risk-reward profile as highly favourable.
At INR 168, the stock offers a 28% upside to JM Financial’s 12-month target of INR 215, supported by 29% PAT CAGR, margin improvement, and multiple expansion potential. For investors seeking mid-cap exposure to India’s manufacturing upcycle, Belrise Industries represents a credible, high-conviction bet.
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