Pricol shares rose 5% in intraday trade on Wednesday to hit a record high of Rs 228.60 on the BSE on heavy trading volume. Shares of the auto parts and equipment company have risen 30% over the past 10 sessions. Today, it surpassed the previous high of Rs 219 recorded on February 17, 2023.

Pricol traded 4% higher at Rs 225.65 at 2:07 pm, while the S&P BSE Sensex gained 0.83 per cent. The average transaction volume over the counter has tripled. A total of 2.4 million shares changed hands on the NSE and BSE, representing 2% of Pricol’s total share capital.

Pricol is engaged in the automotive parts and products/equipment business. More than 80% of the company’s revenue comes from OEM, mainly 2W OEM. It has strong relationships with OEMs, with a dominant share of over 65% in 2W clusters.

The company has a capex plan of Rs 400-450 crore over the next 3-4 years to boost capacity, mainly new products, as part of the Productivity Linked Incentive (PLI) scheme announced by the Government of India and for line General modernisation and renovation. Debt levels are expected to rise moderately with stable accruals and controls on working capital, resulting in debt metrics remaining at appropriate levels over the medium term.

On February 17, 2023, Minda Corporation announced that it had acquired 19.14 million shares in Pricol, representing approximately 15.70% of the total issued and paid-up share capital of Pricol, for an aggregate consideration of Rs 400 crore through open market transactions. Minda Corp has informed the exchange that the stake acquisition is purely a financial investment, and as of now, the company will remain a significant minority shareholder.

According to Crisil Ratings, Pricol is expected to deliver solid business performance and maintain its operating profitability at current levels due to healthy demand for its products from OEMs and export customers. Despite substantial capital expenditure requirements, the financial risk profile is expected to be adequately supported by sound operating cash flow and prudent working capital management.