Pricol Ltd. - Surpasses expectations - Company Update

We revise target price to Rs700 (previously Rs660) and maintain BUY rating due to increase in revenue estimates and valuation rollover. Pricol delivered a strong performance in 3QFY26, led by new launches, good traction in ACFMS segment and premiumization. Key monitorable includes customer addition at P3L, along with sustained premiumization and new model launches in the legacy business. The commencement of mass production of disc brakes from 4QFY26 is expected to support revenue growth. Pricol’s foray into handlebar control technologies which is backed by customer interest, aligns with management’s strategic vision of becoming a key player in the segment. With the premiumization theme intact, Pricol remains well-positioned to capitalize on emerging opportunities with a possibility of gaining market share. Trading at 22.7x/18.8x FY27/ FY28E earnings, we view current valuations as attractive. Remain positive on Pricol.

Strong revenue growth:

Pricol reported standalone revenue growth of +27% yoy at Rs8bn (versus MNCL estimate of Rs7.74bn), primarily on the back of premiumization led growth and new model launches. This growth significantly outpaced the broader industry’s performance. Pricol Precision Products (P3L) reported revenue of Rs2.3bn versus Rs2.4bn in 2QFY26, in-line with the underlying 2W production trend on qoq basis. Effectively consol. revenue grew by 64% yoy (P3L acquisition absent in 3QFY25) to Rs10.4bn.

Margins remain rangebound:

Pricol reported standalone EBITDA margins at 11.2%, +30bps yoy and -40bps qoq. This was driven by lower employee cost and higher gross margins at a standalone level on yoy basis. Standalone EBITDA stood at Rs898mn, +30.3% yoy, +2% qoq. Effectively, Pricol reported standalone PAT growth of 24.8% yoy, -2% qoq at Rs445mn. EBITDA margin at P3L stood at 9.3% (versus 9.1% in 2QFY26).

Key triggers intact, however undervalued:

We believe Pricol has built a strong technological foundation, complemented by superior product quality, which serves as a key differentiator in reinforcing its leadership aspirations in the Digital Instrument Cluster (DIS) segment. With a 37% market share in the domestic 2W space, the company aims to scale this to 45-50% by deepening partnerships with key OEMs such as Honda, Suzuki, and Yamaha. The proposed ABS regulation could accelerate growth in the disc brake segment; however, implementation hurdles make regulatory progress a key monitorable. The ACFMS segment has witnessed rebound in growth performing in-line with company performance due to introduction of new products and ramp up of exports. Key triggers for re-rating remain intact: (i) continued industry outperformance led by market share gains and transition towards LCD and TFT clusters, (ii) customer diversification led growth at P3L, (iii) foray into handlebar control technologies and (iv) disc brake ramp-up.  

Valuation and risks:

We revise our earnings estimates upwards by 4%/ 2% for FY26E/ FY27E, factoring upward adjustment in revenue. We forecast a revenue/EBITDA/PAT CAGR of 25%/25%/28% over FY25-28E. We value Pricol at 25x (unchanged) Dec’27E earnings to arrive at TP of Rs700 (previously Rs660) and maintain BUY rating. Increase in TP is driven by earnings upgrade and valuation rollover. Risks: Slowdown in ICE/ EV 2W sales, delay in commercializing of new products.

Company website: https://pricol.com/

*CMP is as per report published date

Click to download the full Pricol Ltd. Q3FY26 Company Update

Analyst:

• Sahil Sanghvi - Research Analyst, Institutional Equities (NISM-201900004744)
• Uvais Khatri - Research Associate, Institutional Equities (NISM-202300049054)

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FAQs on Pricol Ltd. Q3FY26 Company Update

Overview: Pricol Ltd has reported strong quarterly performance supported by premium product mix, technology expansion and growing partnerships with leading automotive OEMs. Below are key questions investors commonly evaluate when assessing the company’s outlook.

1. What drove Pricol’s strong Q3FY26 performance?

The company delivered strong growth due to premiumization, new product launches and improved traction in the Automotive Control & Fluid Management Systems (ACFMS) segment.

2. How significant is Pricol’s position in the digital instrument cluster market?

Pricol holds roughly 37% market share in India’s two-wheeler digital instrument cluster segment and aims to expand this to 45–50% through stronger OEM partnerships.

3. What are the key growth triggers for Pricol?

Key triggers include expansion in LCD and TFT clusters, scaling of the Pricol Precision Products business, entry into handlebar control technologies and ramp-up of disc brake production.

4. What valuation levels are analysts assigning to Pricol?

The company is valued at around 25x forward earnings based on Dec’27 estimates, with analysts assigning a target price of ₹700.

5. What risks should investors monitor?

Investors should monitor trends in two-wheeler demand, execution of new product commercialization and industry-wide demand cycles.

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