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Business News/ Markets / Stock Markets/  ASK Automotive share price surges 20% in one month. Will rally in this auto ancillary stock continue?
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ASK Automotive share price surges 20% in one month. Will rally in this auto ancillary stock continue?

Brokerage firm JM Financial initiated coverage on ASK Automotive Ltd with a BUY rating and a target price of ₹375, projecting a 23% upside. The company has established a strong market presence in safety control cables and aluminium light-weighting components for two-wheeler.

ASK Automotive share price today opened at ₹308.55 apiece on BSE, the stock touched an intraday high of ₹312 and an intraday low of ₹307.55 apiece. (Pixabay)Premium
ASK Automotive share price today opened at 308.55 apiece on BSE, the stock touched an intraday high of 312 and an intraday low of 307.55 apiece. (Pixabay)

Auto ancillary stock, ASK Automotive Ltd has gained over 22% in one month's period. Brokerage house JM Financial recently initiated coverage on this auto ancillary stock, with a BUY rating and a target price of 375, implying 23% upside. The brokerage highlighted that, despite the company's late entry, it has grown to become a significant player in the safety control cables (SCC) and aluminium light-weighting components (ALP) for the two-wheeler segment, where its market share is rising.

As per the brokerage report, ASK Automotive holds the largest market share of approximately 50% in terms of production volume for original equipment manufacturers (OEMs) + branded independent aftermarket segment in India for brake shoes and Automotive Braking (AB) systems, mainly Drum Braking systems, for two-wheeler. By manufacturing volume, its market share in ALP for two-wheeler is around 9% in FY23 (compared to 8% in FY22).

Also Read: KPI Green upper circuit: KPI Green share price skyrockets over 450% in 1 year; what should you do with the stock?

The brokerage believes that the company is emerging as a major player, driven by the business's own technical, design, and engineering capabilities (using proprietary formulas) to create unique and customised solutions for its clients; also, because of its close ties to its clients, and the company has placed a strong emphasis on quality, cost, and delivery.

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The brokerage projects that over FY24–26E, ASK Automotive's sales and EPS will expand at a compound annual growth rate (CAGR) of 14% and 29%, respectively. This growth will be mostly driven by increased 2W/3W electrification, which will enhance kit value. Strong momentum in non-auto exports and development into the PV industry will also help. According to the brokerage, any slowdown in the electrification of residential 2W and 3W remains a critical variable.

On November 15 of last year, ASK Automotive shares got listed on the bourses at a price of 303.30 per share on NSE, which was 7.55% more than the 282 issue price. ASK Automotive shares began trading at 304.90 on the BSE. ASK Automotive share price has risen in value by more than 10% since its listing date. 

Also Read: ASK IPO listing: ASK Automotive share price makes lukewarm debut, stock lists at 7.6% premium at 303.30 on NSE

On the technical front, Dr. Ravi Singh, SVP - Retail Research at Religare Broking Ltd, said that the ASK Automotive Ltd share price is holding well above the short-term moving average in the weekly time frame, which indicates bullish momentum with a potential upside of 250 levels.

Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decision.

 

 

 

 

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Published: 18 Apr 2024, 12:23 PM IST
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