Multiple growth levers in place; valuation comfortable
Belrise Industries (BIL), a leading Tier-1 auto component manufacturer, has not only made inroads into the sheet metal space, typically dominated by captive OEM suppliers, but has also captured 24% market share in the overall 2W metal components segment in India, making it one of the top three players in the segment. It is the largest supplier of chassis and exhaust systems to a leading Indian two-wheeler (2W) manufacturer, among the top two suppliers to the country’s top 2W OEM, the exclusive supplier for multiple premium models of an Indian premium 2W OEM, and one of the few players in India providing both suspension and steering columns.
Moreover, ~73% of BIL’s product offerings remain technically relevant and economically necessary across both ICE and EV platforms. Further, BIL has been adding products that are focused on EV such as hub motors, motor controllers, chargers, and lightweight structural parts.
BIL is strategically expanding its 4W segment, aiming to double revenue from this category over the next 2–2.5 years. This growth is expected to be driven by a strengthened product portfolio and the acquisition of H-One, which brings advanced technology in high-tensile steel components (up to 1,100 MPa) and access to two key Japanese OEMs. The acquisition of Mag Filters further enhances BIL’s reach by opening doors to India’s 4W market leader. This pivot toward 4Ws and CVs offers a multi-year growth runway, supported by a larger addressable market and increasing premiumisation in passenger vehicles, which is driving higher component complexity.
BIL’s high dependence on its top customer exposes it to customer concentration risk. Regulatory uncertainty around ABS in <125cc 2W could impact growth in its braking systems vertical. Margin pressure may arise in weak markets if OEMs demand price cuts. The trading business, with lower margins, continues to dilute overall profitability. Lastly, stiff competition and high entry barriers in the 4W segment could delay growth and margin expansion Leadership position coupled with industry tailwinds: BIL is a leading supplier of metal components in the two-wheeler (2W) segment. The total addressable market (TAM) for 2W metal products in India is projected to grow from INR 197bn–199bn in FY25E to INR 348bn by FY30P, reflecting a CAGR of 11–13%. The three-wheeler (3W) metal products market is also expected to nearly double during the same period, expanding from INR 15– 17bn to INR 27–29bn. BIL is well-positioned to benefit from this growth, supported by increasing content per vehicle (CPV) and strong relationships with OEMs. Rising content per vehicle in 2Ws: BIL has significantly outperformed the industry (revenue CAGR of 11.5% over FY16–25, compared to just 1.4% for the domestic 2W industry) driven by deeper client penetration and new product launches, leading to a steady rise in CPV, currently at ~INR 12,500 and expected to reach ~INR 17,300 (~1.4x) over the medium term. Expanding presence in 4W metal components: BIL currently derives 11.7% of its manufacturing revenue (FY25) from the four-wheeler (PV and LCV) segment and aims to double it over the next 2–2.5 years. The Indian 4W (PV+LCV) metal products segment is estimated at INR 566bn in FY25E and is projected to grow at a CAGR of 9% to INR 877bn by FY30E, approximately 2.5 times larger than the 2W components market, offering a significantly broader growth opportunity. Potential triggers for unlocking value: BIL’s trading business, contributing 21% of revenue via Badve Trading FZE, has lower margin (~6% vs. ~14% in manufacturing). A potential hive-off could unlock value. BIL is also simplifying its related-party structure to enhance governance and unlock investor value. Initiate with BUY rating and a TP of INR 215: We expect BIL to deliver a CAGR of ~13%/14%/29% in revenue/EBITDA/PAT over FY25–28E, driven by higher CPV in 2Ws due to premiumisation and deeper customer penetration, expansion in 4Ws (PV+CV), and balance sheet deleveraging. Accordingly, we initiate coverage on BIL with a BUY rating and a TP of INR 215, based on 25x FY28E P/E. BIL is trading at ~19x our FY28E EPS, compared to the peer average of 27x FY28E P/E. Belrise Industries JMFICS
