1. 🧾 At a Glance
Shriram Pistons has quietly turned into a ₹10,000+ Cr auto ancillary beast, compounding profits at 48% over 5 years while maintaining a 20%+ OPM. It serves every big OEM, runs two brands (SPR and USHA), and exports globally. Despite this, it trades at a P/E of 21—lower than Uno Minda (68), Endurance Tech (46), and Schaeffler (65). And yes, it’s cash-rich too.
2. 🎬 Introduction with Hook
This isn’t your usual piston story. It’s a tale of torque, tailwinds, and total transformation.
While everyone was chasing EVs and chip fabs, Shriram Pistons was quietly building torque at home—literally. The company that once only made pistons for Maruti is now exporting to Europe, scaling non-auto parts, and hitting ₹3,500+ Cr in revenue with ₹500+ Cr PAT. And they’re doing all this while flexing a sexy 26% ROCE.
So, why isn’t it a market darling yet? Because it’s too boring to pump. But maybe, just maybe, that’s what makes it compounding gold.
3. ⚙️ Business Model – WTF Do They Even Do?
Short answer: They make things that go inside things that go vroooom.
Long answer:
- 🧱 Core Products:
- Pistons, piston pins, piston rings, and engine valves
- Two brands: SPR (domestic + global OEMs) and USHA (aftermarket)
- 🧭 Segments by Revenue (FY25):
- OEMs: 52%
- Aftermarket: 26%
- Exports: 17%
- Non-Auto (compressors, etc.): 5%
- 🌐 Customers:
- Maruti Suzuki, Tata Motors, Bajaj Auto, Hero, Hyundai, Honda, Ashok Leyland, and global biggies
- Exporting to Europe, ASEAN, and the Middle East
- 🛠️ Manufacturing:
- 4 facilities including two tech tie-ups in Rajasthan and Ghaziabad
- Tech partnerships with global majors like KS Kolbenschmidt (Germany)
4. 📊 Financials Overview – Profit, Margins, ROE, Growth
Let’s break down the beast:
| Metric | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Revenue (₹ Cr) | 1,597 | 2,065 | 2,609 | 3,089 | 3,550 |
| Net Profit (₹ Cr) | 89 | 164 | 294 | 439 | 516 |
| OPM % | 14% | 15% | 18% | 21% | 20% |
| ROCE % | 11% | 17% | 24% | 28% | 26% |
| ROE % | 19% | 23% | 23% | 23% | 23% |
📈 5-Year CAGR:
- Revenue: 17%
- Profit: 48%
- EPS: from ₹19.85 to ₹115+
5. 💸 Valuation – Is It Cheap, Meh, or Crack?
- Current Price: ₹2,477
- Market Cap: ₹10,891 Cr
- P/E: 21.7
- Book Value: ₹543
- P/B: 4.56
- EV/EBITDA (Est): ~11x
📉 Fair Value Range (Based on 15–18x FY26E EPS of ₹135–145):
₹2,025 – ₹2,610
Which means: the current price is close to upper range—but still undervalued vs peers with lower margins.
6. 🍿 What’s Cooking – News, Triggers, Drama
- 🔧 Capex Plan: ₹350 Cr invested in new product lines and capacity in FY24–25
- 🚗 EV Play? Still early, but working on engine-agnostic components like e-compressor parts
- 🧪 R&D Push: 1.5% of sales into innovation, including aluminium alloy tech
- 🧾 Listed in June 2024 – the IPO brought investor spotlight after decades of private compounding
- 🕵️♂️ FII Entry: FIIs now own 5.3%, up from 0% two years ago. Smart money alert.
7. 🧮 Balance Sheet – How Much Debt, How Many Dreams?
- Borrowings: ₹508 Cr
- Cash + Investments: ₹150 Cr
- Net Debt: ~₹360 Cr
- Debt/Equity: ~0.15x ✅
- Reserves: ₹2,350 Cr
☑️ Clean balance sheet. Low leverage. No exotic dreams. Just pistons and discipline.
8. 💵 Cash Flow – Sab Number Game Hai
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| CFO | ₹395 Cr | ₹487 Cr | ₹434 Cr |
| Capex | ₹476 Cr | ₹422 Cr | ₹385 Cr |
| FCF | Negative due to expansion but earnings quality remains high |
💬 Commentary:
They’re spending on growth, but not bleeding cash. That’s rare in auto ancillaries.
9. 📐 Ratios – Sexy or Stressy?
| Ratio | FY25 |
|---|---|
| ROCE | 26% ✅ |
| ROE | 23% ✅ |
| OPM | 20% ✅ |
| D/E | 0.15x ✅ |
| Dividend Payout | 9% (low, reinvesting mode) |
| Interest Coverage | ~18x ✅ |
Verdict: It’s a spreadsheet supermodel—every ratio posing confidently.
10. 💰 P&L Breakdown – Show Me the Money
- FY25 Revenue: ₹3,550 Cr
- OEM: ₹1,846 Cr
- Aftermarket: ₹923 Cr
- Exports: ₹604 Cr
- Non-Auto: ₹177 Cr
- EBITDA: ₹724 Cr
- PBT: ₹682 Cr
- PAT: ₹516 Cr
- EPS: ₹115
⚠️ Warning: EBITDA margins may stabilize at 19–20% as commodity inflation eases.
11. 🆚 Peer Comparison – Who Else in the Game?
| Company | P/E | ROCE | OPM | MCap (₹ Cr) |
|---|---|---|---|---|
| Uno Minda | 68 | 18.9% | 11% | ₹63,600 |
| Endurance | 46 | 18.2% | 13% | ₹37,700 |
| Schaeffler | 65 | 25.7% | 18.4% | ₹66,100 |
| Bharat Forge | 60 | 13.1% | 17.8% | ₹60,300 |
| Shriram Pistons | 21.7 | 25.7% | 20.4% | ₹10,900 |
⚖️ Undervalued and outperforming. Classic case of “kya bech rahe ho, aur kis price pe?”
12. 🧠 Miscellaneous – Shareholding, Promoters
- 👨👩👧👦 Promoter Holding: 43.75%
- 🧳 FIIs: 5.3% and rising
- 👥 Public: 37.78%
- 🗳️ AGM recently held with BRSR compliance
- 🏢 Tech alliances: Germany, US, and Japan-based component experts
📦 No pledging. No bonus drama. No pump-and-dump. Just compounding.
13. 🧑⚖️ EduInvesting Verdict™
Shriram Pistons is the classic “bohot purana, bohot underrated” compounder. It’s the uncle at weddings who used to ride a Kinetic but now owns 4 apartments in Delhi. Everyone ignored it till the listing. Now they’re noticing the returns.
It may not be flashy, but the 48% profit CAGR, 26% ROCE, and moat in pistons + rings make this a clean, boring, compounding machine.
📌 Keep an eye on: margin sustainability, exports revival, and potential EV-neutral components
Fair Value Range: ₹2,025 – ₹2,610 (based on 15–18x FY26E EPS of ₹135–145)
(Not a recommendation. Just maths and mirchi.)
✍️ Written by Prashant | 📅 July 10, 2025
Tags: Shriram Pistons, Auto Ancillary Stocks, Microcap 250, Engine Components, Boring Compounders, Indian Auto Sector, EV Proof Stocks, Export Manufacturing
