Rico Auto hits record high on heavy volumes; stock rallies 61% in a month

Rico Auto was trading 6 per cent higher at Rs 143.75, as against 0.5 per cent rise in the benchmark index

Shares of Rico Auto Industries hit a record high of Rs 150.40 rallying 11 per cent on the BSE in Thursday’s intra-day trade on the back of heavy volumes. The stock surpassed its previous high of Rs 146.15 touched on March 11, 2024. In the past one month, the market price of Rico Auto has zoomed 61 per cent, as compared to 0.24 per cent decline in the S&P BSE Sensex.

At 12:14 pm; the stock was trading 6 per cent higher at Rs 143.75, as against 0.5 per cent rise in the benchmark index. A combined 8.93 million equity shares representing 6.6 per cent of total equity of Rico Auto have changed hands on the NSE and BSE.

The company manufactures and supplies high precision and fully machined components and assemblies - both aluminum and ferrous to leading OEMs across the globe for electric vehicles (EVs), and ICE engine vehicles.

The longstanding business relationships with renowned auto players such as BMW, Renault, Kia, GKN, and Hero Motocorp have strengthened the market position of the group. Further the managements’ business acumen has helped the group to be the sole supplier of many auto components for BMW and several semi-electric vehicle (EV) components for Toyota.

Going forward, the business will continue to benefit over the medium term from continuous research and development to develop critical auto components along with the extensive experience and business acumen of the board of directors, according to CRISIL Ratings.

Meanwhile, EVs are also emerging as front-runners in the fast-evolving Indian automotive market with their ability to facilitate zero carbon emission and address energy security concerns. As per India Energy Storage Alliance (IESA), the Indian EV industry is expected to grow at a CAGR of 36 percent from the current low base.

Going forward, the management anticipates good growth in the business of the company over the next few years driven by an increase in demand of components for EVs and for ICE engines both for the domestic and export markets.

"The automotive component industry has shown resilience and will succeed despite the current supply chain assumptions and the continuation of the geopolitical situation. The growth is particularly strong in the vehicle segment and is expected to continue to expand in the coming years," the management said in the Q3FY24 earnings conference call.

The management further added that Rico stands to benefit from this trend and has ample opportunities for growth and expansion. Till December’23, the company booked new business worth Rs 1,000 plus crore which translates into peak annual revenue of Rs 225 crore per annum.