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EV Wiring Harness Leader Surges Ahead
5 Oct
Summary
- Dhoot Transmission leads in EV wiring harnesses.
- Jefferies initiates 'Buy' with a target of Rs 1,730.
- Company expects robust revenue and EPS growth.
Dhoot Transmission, a prominent manufacturer of two-wheeler wiring harnesses, is strategically positioned to capitalize on increasing demand and premiumization trends in the electric vehicle (EV) market. The company holds a commanding presence in the EV segment, securing 70% market share in both two- and three-wheeler EV wiring harnesses.
Global financial services firm Jefferies has commenced coverage on Dhoot Transmission, issuing a 'Buy' recommendation and establishing a target price of Rs 1,730 per share. This forecast suggests a potential upside of nearly 14% from its current stock valuation. Jefferies projects a revenue growth of 24% CAGR and an EBITDA growth of 23% CAGR from FY26 to FY29.
Currently, 77% of Dhoot Transmission's revenue stems from wiring harnesses, with the remaining 23% derived from components like battery packs, sensors, and controllers. The company is actively expanding its product portfolio, including recent acquisitions and potential joint ventures for advanced automotive solutions.
Analysts anticipate a considerable rise in the company's net cash, escalating to Rs 2,300 crore by FY29 from Rs 180 crore by the end of FY26. This financial strengthening is expected even as return on equity (ROE) is projected to moderate slightly.
