Automotive Axles Ltd. share price target

We maintain a BUY rating with a 13% upside potential.

Being a proxy play to the CV industry, at CMP we find limited downside risk to AutoAxles. Hence, we upgrade the stock to BUY from SELL earlier with an 11% upside potential.

We recommend a BUY rating on the stock with a target price of Rs 2,050/share, implying an upside of 10% from the CMP.

AAL is currently the largest independent manufacturer of rear drive axle assemblies for CVs (primarily M&HCVs) in India. AAL has continuous focus on working capital
improvement and inventory optimization and continuous focus on revenue
improvement, new product development, operational excellence & cost optimization as part of Industry 4.0 Strategy.

We expected muted domestic MHCV industry growth in FY25 and AutoAxles being a proxy to the industry we factor in limited upside potential from current levels. Hence, we downgrade the stock from HOLD to SELL (previously BUY to HOLD in Q2FY24 report).

Post the recent run-up in prices, the valuation appears full. As a result, with limited upside potential from current levels, we downgrade the stock from BUY to HOLD.

We maintain our BUY rating on the stock with the TP at Rs 2,400/share.

Recommendation: Post recent correction, the valuation looks attractive. As a result, we upgrade our rating from HOLD to BUY

Recommendation: We maintain our HOLD rating on the stock.

After the recent run-up to current levels post strong Q3 results, the stock looks fairly valued and we need to await a better entry point; hence downgrade our rating from BUY to HOLD. Given the strong CV Cycle we value the stock at 19x (earlier 18x) it's FY25 EPS (roll forward from Sept'24 EPS). O..

We revise our rating from HOLD to BUY assigning a multiple of 17x FY24E EPS to arrive at a target price of Rs 1,840/share (Rs 1,600 earlier), implying a potential upside of 12% from the CMP.

Key Company Update: Automotive Axles is co-promoted by Meritor Inc. (global leader in axles especially for heavy trucks) and the Kalyani group (promoters of Bharat Forge) with each entity owning 35.5% stake in the company. At the parent level, Cummins Inc. has acquired Meritor Inc. valuing Meritor Inc. at US$3.7 billion....

We retain a BUY rating on the stock assigning a multiple of 17x FY23E EPS to arrive at a target price of Rs 1,550/share (12% upside) on the back of the CV recovery cycle, new products, and cost rationalisation.

We retain a BUY and our multiple to 15x FY23E to arrive at a target price of Rs 1,440/share (15% upside) on the back of the CV recovery cycle, new products, and cost rationalisation.

We retain a BUY and raise our multiple to 15x FY23E to arrive at a target price of Rs 1,470/share (11% upside) on the back of the CV recovery cycle, new products and cost rationalisation.

We retain BUY with target price of Rs 1341 (22% upside) on back of expected recovery in CV segment.