🛑 India’s brake king for 2-wheelers is growing fast, but with a P/E of 36 and thin dividend yield — is ASK worth the ask?
⚡ At a Glance
ASK Automotive commands over 50% market share in India’s two-wheeler brake system market. FY25 profit surged to ₹248 Cr with strong ROCE of 28%, but the stock is now trading at 8.5x book and a lofty 36x earnings. Is it still worth a ride, or are brakes about to screech?
🏍️ 1. What Does ASK Automotive Actually Do?
ASK = Always Stopping Kinetically
They make brake shoes and advanced braking systems for Indian two-wheelers — both for OEMs (Honda, Hero, Bajaj, etc.) and the aftermarket.
🏆 Market Position:
- 🇮🇳 India’s largest brake-shoe manufacturer
- 🛒 Serves both OEM and IAM (independent aftermarket)
- 50%+ market share in FY24 by production volume
🌟 Additional Products:
- Aluminum die casting
- Safety control cables
- Wheel assembly components
- Battery cables and wiring harnesses
So basically — if it stops a bike or helps it not catch fire, ASK probably makes it.
📈 2. Financial Performance: Brakes that Don’t Fail
| FY | Revenue (₹ Cr) | Net Profit (₹ Cr) | OPM % | ROCE % | ROE % |
|---|---|---|---|---|---|
| FY19 | 1,785 | 114 | 13% | — | — |
| FY22 | 2,013 | 83 | 8% | 16% | 4.1% |
| FY23 | 2,555 | 123 | 9% | 20% | 6.2% |
| FY24 | 2,995 | 174 | 10% | 24% | 8.8% |
| FY25 | 3,601 | 248 | 12% | 28% | 12.6% |
📌 CAGR Highlights:
- 📈 Revenue (5Y CAGR): 17%
- 💰 Profit (5Y CAGR): 18%
- 🚀 TTM Profit Growth: 42%
Margins have expanded consistently — from 8% to 12% — showing great operational control and pricing power.
🛠️ 3. Balance Sheet: Built Like a Disc Brake
| Metric | FY25 |
|---|---|
| Equity Capital | ₹39 Cr |
| Reserves | ₹1,004 Cr |
| Borrowings | ₹412 Cr |
| Total Assets | ₹1,924 Cr |
| Cash from Ops | ₹360 Cr |
| Capex (Inv. CF) | ₹339 Cr |
| Net Cash Flow | ₹8 Cr |
✅ ASK is reinvesting its cash aggressively — ₹339 Cr in FY25 capex
✅ Borrowings are manageable — gearing under 0.5x
✅ Working capital days down to single digits!
🧠 This is one of those rare auto ancillary players that’s both growing and sweating assets efficiently.
📊 4. Valuation: Worth the Premium?
📈 CMP: ₹453
💸 EPS FY25: ₹12.56
💰 P/E = 36.1x
📘 Book Value: ₹52.9 → P/B = 8.56x
💵 Dividend Yield = 0.33%
That’s not cheap. But the market is pricing in:
- 🛵 Dominant duopoly status
- 🔧 Stable margins + asset efficiency
- 🚀 High ROCE + low WC cycle
- 🏍️ Electric two-wheeler brake potential
Peer Valuation Table:
| Company | P/E | ROCE % | Remarks |
|---|---|---|---|
| ASK Automotive | 36.1x | 27.6% | Market leader, premium valuation |
| Endurance Tech | 41.3x | 18.2% | Diversified play |
| Schaeffler India | 61.1x | 25.6% | MNC premium |
| Uno Minda | 65.3x | 18.8% | Larger base, similar growth |
🎯 ASK is priced like it has no brake pads left on valuation. Still — not the most expensive in the space.
🧠 5. EduInvesting Fair Value Estimate
Let’s assume FY26 PAT = ₹300–320 Cr
EPS = ₹15–16
Apply fair P/E = 28x–30x (growth + market share, but not quite MNC tier)
➡️ Fair Value Range = ₹420 – ₹480
CMP is ₹453 = very close to upper band
🚨 6. Risks That Could Skid the Stock
- 🧾 Too much reliance on two-wheeler volumes — cyclical
- ⚡ EV disruption may hurt traditional brake parts
- 📉 Valuation fatigue — no margin for error
- 💼 High promoter holding (78.95%) = low float = volatility
- 🧻 Low dividend = growth only, not income
🛞 7. Final Verdict: ASK Before You Brake
ASK Automotive is a rare auto ancillary that combines:
✅ Pricing power
✅ Operational efficiency
✅ 50% market share
✅ Good ROCE, low debt
BUT…
❌ At 36x P/E, you’re not getting in early.
❌ You’re buying a high-quality business — but at high-quality prices.
Great stock for riding the “India consumption + mobility” theme — but maybe wait for a ₹400 dip to truly floor it.
🎯 EduInvesting Fair Value Range = ₹420 – ₹480
(Based on FY26 projected EPS of ₹15–16 and P/E of 28–30x)
✍️ Written by Prashant | 📅 18 June 2025
Tags: ASK Automotive, auto ancillary stocks, two-wheeler brakes, IPO stocks, high ROCE companies, EduInvesting
