Small-Cap Auto Ancillary Stock Hits Upper Circuit On Major Order Win
Stocks in News | Shares of PPAP Automotive Ltd, a prominent small-cap auto parts manufacturer, shot up 20% intraday to hit their upper circuit limit of Rs 259.95 on Monday, December 16. The stock eventually closed the day up 8.5% at Rs 235.
The spike in stock prices came hot on the heels of the company's announcement about bagging multi-year contracts worth Rs 118 crore, including a significant order for electric vehicle (EV) components. Notably, this order constitutes approximately one-third of the company’s market capitalization.
Details of the Rs 118 Crore Order
In its exchange filing, PPAP Automotive outlined the strategic importance of its newly secured orders. The total order value of Rs 118 crore includes Rs 50 crore dedicated to EV components, further solidifying its foothold in the fast-growing EV segment.
Global Partnerships and Expansion Initiatives
This order not only highlights the auto parts maker’s strategy to deepen its involvement in the electric vehicle sector but also marks a significant achievement with KIA, enhancing its standing among global automotive leaders and bolstering long-term partnerships.
During the September quarter earnings call, the management discussed the company’s efforts to extend its reach to other major automakers like Mahindra & Mahindra and Hyundai, with aspirations to become a Tier-1 supplier.
In addition, the company is expanding its operational footprint with new facilities in Pune and Sanand expected to start in Q4FY25, and a new plant planned in Chennai for 2026 to meet growing demands.
PPAP Automotive Q2FY25 Financial Highlights
- Consolidated net profit surged 428% YoY to Rs 2.86 crore, up from Rs 0.54 crore in Q2FY24.
- Revenue slipped marginally to Rs 144.86 crore from Rs 148.40 crore in the year-ago quarter.
Should You Buy PPAP Automotive Shares?
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