Ask Automotive - Entering A Period Of Robust Growth, Capital Efficiency: ICICI Securities

ICICI Securities Report

We interacted with the management of ASK Automotive Ltd. and following are the takeaways:

1. Ask Automotive has recently secured orders of aluminium castings for exports to original equipment manufacturers like Ford/Stellantis, helping it gradually move towards 10% exports to sales from ~3-4% currently,

2. Ask Automotive, through its new plant in Karnataka, is planning to make HPDC scooter alloy wheels with tech support from Taiwanese partner LioHo, subject to testing and validation ahead,

3. it is aiming to exceed 13% Ebitdam (including fly-wheel revenue) by FY26 versus FY24 exit rate of ~11%, driven by government incentives, better mix/scale,

4. capex to remain ~Rs 3 billion p.a.; Ask Automotive is confident of delivering revenue compound annual growth rate of ~18-20% in coming years.

Maintain Buy with DCF-based revised target price of Rs 447 (earlier Rs 405), implying 24 times FY26E EPS. Rise in target price is being driven by revenue increase and valuation rollover.

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