PPAP Automotive Wins ₹118 Crore Multi-Year Order: Focus On , EV Expansion

PPAP Automotive shares surged as much as 16% today, on December 16, 2024, after the company announced a major multi-year order with a lifetime value of ₹118 crore. The order, which represents nearly one-third of the company’s market capitalisation of ₹360 crore, includes business for electric vehicles (EVs) valued at approximately ₹50 crore.

Order Details & Execution Timeline

The newly acquired orders, to be executed over 3 to 5 years, come from long-standing clients, including global automotive giants like Kia. This is a major expansion opportunity in PPAP Automotive’s efforts to build its presence in the international market. During the September quarter earnings call, MD & CEO Abhishek Jain talked about the company’s goal to increase its reach in the passenger vehicle segment by engaging with manufacturers like Mahindra & Mahindra and expanding its product offerings to Hyundai and Kia.

Expanding Facilities 

To cater to the increasing demand, PPAP Automotive is undertaking expansions at its existing facilities and setting up new plants. Key developments include:

• New Plants: Facilities in Pune and Sanand, operational by Q4 FY25.
• Chennai Facility: Set to cater to customer requirements from 2026.
• Existing Plants: Ongoing small-scale expansions to support the production of upcoming models.

Diversification 

Currently, 85% of PPAP Automotive’s revenue comes from the automotive segment, while aftermarket and tooling contribute 3% each. The company is working to diversify its portfolio by venturing into electrical products and industrial applications.

Financial Performance

In Q2 FY25, PPAP Automotive’s standalone net profit jumped 106.92% to ₹5.56 crore from ₹2.68 crore in Q2 FY24. Revenue from operations increased marginally by 0.59% year-on-year to ₹1,413.06 crore.

Following the announcement, PPAP Automotive’s shares traded at ₹247.00 at 1 PM today, showing a 14.02% intraday gain, while recording a 7.67% increase over the past year.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.