Buy SPR Auto Technologies; target of Rs 6150: Motilal Oswal

As per the latest business developments, Motilal Oswal's research report on SPR Auto Technologies

SPR Auto Technologies (SPR) is evolving from being a traditional piston manufacturer into a diversified, technology-fuelled, powertrain-agnostic mobility platform through strategic inorganic acquisitions. The piston business is a firm cash-cow franchise for SPR, supported by market leadership, ~500bp elevated margins than the next peer and core RoCE of over 50%. SPR is benefiting from rising multi-fuel opportunities (CNG, ethanol, hydrogen and hybrids), firm aftermarket demand, and the premature exit of global rivals from the ICE ecosystem. Leveraging its firm balance sheet and cashflow profile, SPR is reinvesting in acquisitions such as Antolin, Takahata, TGPEL and EMFi, thereby diversifying beyond powertrain-focused products to precision plastic molding components and expanding estimated content per vehicle by 6x to INR30k+. This strategy helps SPR create a scalable auto component platform with balanced exposure across powertrains.

We initiate coverage with a BUY rating and a TP of INR6,150, premised on 30x Sep’28E EPS.

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