Automotive Segment tailwinds are getting international<\/b><\/p>\n
The automotive components industry continues to benefit from strong structural drivers including rising income levels, expanding infrastructure, urbanization and increasing mobility demand. These factors contribute to sustained growth in vehicle production and consequently support demand for automotive components. While electrification is gradually gaining traction, ICE (engines) are expected to remain a significant part of the vehicle mix in the medium term, particularly in segments such as commercial and passenger vehicles. Hybrid technologies, which combine electric motors with internal combustion engines, continue to rely on pistons and piston rings, ensuring continued relevance for the company\u2019s products. Additionally, regulatory developments such as tighter emission standards, improved fuel economy requirements and vehicle safety regulations are increasing the technological complexity of automotive components. These changes often require higher precision and advanced engineering solutions, which favor established manufacturers with strong technical capabilities. Hence, as a supplier of critical engine components, the company is well positioned to benefit from the expansion of the automotive ecosystem.<\/p>\n
We initiate BUY with a price target of Rs. 686<\/b><\/p>\n
The company operates in a niche and technologically intensive segment of the automotive component industry, benefits from structural growth in India\u2019s automotive sector and the continued relevance of internal combustion engines and hybrid powertrains over the medium term. Its long operating history, strong OEM relationships and integration within the automotive supply chain create meaningful entry barriers and stable demand visibility. Additionally, the company derives technological strength from its association with global automotive supplier Tenneco and Federal-Mogul, while maintaining a diversified revenue mix across vehicle segments and sales channels. Hence, we value Federal-Mogul Goetze (India) at 15x FY28E EPS<\/b>, reflecting its strong technological capabilities, entrenched OEM relationships and resilient business model.<\/p>\n
Report attached below:<\/p>\n