Belrise Industries has stormed into the spotlight after global investment firm Jefferies initiated coverage on the recently listed automotive components manufacturer with a ‘Buy’ rating and a price target of INR 135 per share, representing a 16% upside from its last close of INR 116 per share on Wednesday.
Following the report’s release, Belrise shares rallied 11% on July 8 to INR 113.90, and extended gains to hit a record high of INR 116.50 on 9 July, lifting the stock nearly 14% in just two trading sessions.
This fresh coverage not only ignites investor interest in the counter but also places Belrise firmly on the radar of institutional portfolios seeking exposure to India’s evolving mobility and manufacturing sectors.
🔍 Why Jefferies Is Bullish on Belrise
Jefferies’ bullish thesis on Belrise is built on four strategic pillars:
- Rising Two-Wheeler (2W) Demand & Industry Premiumisation
- Increasing Content per Vehicle
- Expanding Footprint in Four-Wheelers (4Ws) and Exports
- Attractive Valuation Amid Strong Earnings Visibility
1. Recovery in Two-Wheeler Demand
India’s two-wheeler industry, which faced a prolonged slowdown between FY19 and FY22, is now on a clear recovery path. According to Jefferies, 2W wholesales grew at a 13% CAGR between FY22–25, although FY25 volumes still trail FY19 levels by 6%. That said, the brokerage sees demand tailwinds emerging from factors like:
- Income tax cuts
- Easing consumer financing
- Upcoming PSU wage hikes in FY27
They estimate 11% CAGR in industry production for two-wheelers (including exports) between FY25 and FY28.
2. Premiumisation and Content Upsell
Belrise is strategically positioned to benefit from the premiumisation trend in 2Ws. In premium bikes, the value of chassis systems is 2.2x that of entry-level models. Belrise is already expanding its offerings to include proprietary components like steering columns, filters, and braking systems, aiming to increase its content-per-vehicle by 38%.
Notably, even among existing clients, Belrise has ample room to grow: its content-per-vehicle with its second-largest OEM is still 30% lower than with its largest.
🧩 Business Model & Segment Breakdown
Market Positioning:
Belrise is one of India’s leading two-wheeler metal component suppliers, with a ~24% market share in chassis and exhaust systems. It derives:
- 67% of revenue from 2Ws
- 9% from 4Ws
- ~20% from commodity trading
Key Clients:
The client roster includes auto majors such as Bajaj Auto, Honda, Hero MotoCorp, Royal Enfield, Jaguar Land Rover, Tata Motors, and Mahindra & Mahindra. Such a diversified yet blue-chip client base enhances revenue stability.
🛠 Strategic Expansion into Four-Wheelers and Exports
Jefferies underscores Belrise’s aggressive push into four-wheeler components, a market nearly three times the size of the 2W segment. The company has strengthened its capabilities through the acquisition of H-One, enabling it to manufacture proprietary 4W products like crossbeams and chassis systems.
The company has already won new orders from two European OEMs, signalling early success in its export ambitions.
Management targets a doubling of 4W revenues within 2–3 years.
📊 Financial Snapshot
| Metric | FY25E | FY26E | FY27E | FY28E |
|---|---|---|---|---|
| Revenue | 8,291 | 9,301 | 10,410 | 11,642 |
| EBITDA | 1,021 | 1,146 | 1,283 | 1,434 |
| Net Profit | 355 | 516 | 659 | 789 |
| EPS (INR) | 5.46 | 5.80 | 7.41 | 8.87 |
| Net Debt/(Cash) | 2,800 | ~1,200 | ~300 | (600) |
Jefferies expects Belrise to delever significantly, transitioning from INR 2,800 crore in net debt in FY25 to a net cash position of INR 600 crore by FY28. This is driven by robust internal accruals and INR 2,200 crore raised through its IPO.
Belrise industries Post-IPO Performance
Belrise Industries launched its IPO on 21 May 2025. The offering received an overwhelming response from investors, resulting in an impressive oversubscription of 41.3 times.
The stock debuted with a positive listing, delivering an 11.11% return on the listing day. Following its debut, the stock price consolidated within a range of INR 90 to 105 in the month of June.
However, the research report published by Jefferies acted as a catalyst, driving renewed investor interest and pushing the stock price higher. As a result, Belrise Industries’ stock has delivered approximately 29% returns from its IPO allotment price of INR 90 per share.
📉 Recent Financial Performance: Some Near-Term Weakness
Despite its promising trajectory, Belrise reported muted performance for the nine months ended December 2024:
- Net profit declined 17.5% YoY to INR 245.5 crore
- Revenue grew marginally by 0.9% YoY to INR 6,013 crore
This softness is seen as transitional, with Jefferies projecting accelerated growth as new capacities scale and the product mix tilts toward higher-margin segments.
⚠️ Valuation & Risk Factors
Jefferies values Belrise at 18x FY27E EPS, giving a price target of INR 135. The current FY26E P/E of 18x is considered attractive, especially in light of a 0.8x PEG ratio, compared to the industry average of 1.8x.
Key Risks Highlighted:
- Customer concentration: Heavy reliance on top client, believed to be Bajaj Auto
- Demand volatility: Especially in the cyclical 2W market
- Related-party transactions: Formed ~26–29% of revenue in 9MFY25
- Corporate structure complexity: Any adverse related-party developments or delays in simplification could impact valuations
However, Jefferies believes that streamlining group structure could act as a valuation catalyst in the medium term.
Analyst View
“Belrise is a rare combination of top-tier clients, scalable growth engines, and improving balance sheet metrics. Its positioning in a recovering 2W segment, backed by clear plans to diversify into 4W and exports, gives it a multi-dimensional growth runway,”
— Nitij Mangal, Equity Analyst, Jefferies
Final Words
Belrise Industries appears poised for multi-year value creation. Jefferies’ initiation serves not just as a near-term trigger, but also as a validation of Belrise’s potential to evolve into a diversified, debt-free automotive systems powerhouse by FY28.
For investors eyeing emerging leaders in India’s auto components space—especially those aligned with themes like premiumisation, localisation, electrification, and global supply chain shifts—Belrise is one to watch.
Disclaimer: This article is for educational and informational purposes only. It does not constitute investment advice or a recommendation. Always consult with a licensed financial advisor before making investment decisions.