The Belrise share price has defied the overall gloom and doom seen in the broader markets. In a week when we saw the Nifty and Sensex log their biggest 1-day losses since June 2024, Belrise has gained nearly 5% in 5 days. And the price target from JM Financial indicates the party is unlikely to end anytime soon.
The domestic brokerage house has maintained a ‘Buy’ rating on Belrise Industries, raising its target price to Rs 225 from Rs 215 earlier, implying an upside of about 22% from the current levels.
The brokerage’s positive stance is anchored in the company’s latest acquisition move, which it believes strengthens long-term growth prospects, even though near-term financial impact may remain limited.
Belrise bets on aerospace with UK acquisition
Belrise Industries has entered into an agreement to acquire 100% stake in UK-based Chester Hall Precision Engineering Holdings for about GBP 13.2 million (around Rs 163 crore).
The target company operates in precision engineering for aerospace, aviation, space and defence, manufacturing critical components such as aero-structures, engine parts and satellite components, the report said. It also brings established relationships with global original equipment manufacturers (OEMs).
JM Financial said the deal appears strategically positive as it helps Belrise diversify beyond its core auto components business into high-entry-barrier, technology-intensive segments.
Acquisition strengthens long-term growth optionality
The brokerage highlighted that the move gives Belrise access to niche capabilities in precision machining and a platform to scale globally.
It also expects the acquisition to be earnings per share (EPS) and return on capital employed (RoCE) accretive from day one. However, the immediate financial contribution is likely to be modest, with an estimated impact of about 2% on FY27 and FY28 earnings.
“The acquisition strengthens long-term growth optionality,” the report noted, while flagging execution and integration as key factors to watch.
Chester Hall: Financial profile
According to the report, Chester Hall reported revenue of about 19.9 million pounds in CY24 and is expected to generate around 18.5 million pounds revenue with EBITDA of 2.1–2.2 million pounds in CY25.
The deal implies a valuation of roughly 6x EV/EBITDA, and the acquisition is expected to close within about 20 business days, subject to customary conditions, the report said. Despite its capabilities, the business remains relatively small, contributing only about 2–2.5% to Belrise’s consolidated revenue and EBITDA estimates for FY26.
Core business growth remains steady
As per the brokerage report, Belrise’s core business will continue delivering stable growth over the medium term. Revenue is projected to grow from Rs 9,480.2 crore in FY26 to Rs 12,288.5 crore by FY28, as per the report. The report further noted that EBITDA margins are expected to improve gradually from about 12.3% to 12.7% over the same period.
Adjusted net profit is also seen rising from Rs 486.8 crore in FY26 to Rs 807.5 crore by FY28, supported by operating leverage and scale benefits.
Margins and return ratios expected to improve
The brokerage expects gradual improvement in profitability metrics. EBITDA margins are projected to expand slightly, while return on invested capital (ROIC) is expected to improve from about 11.4% in FY26 to 15% by FY28. At the same time, valuation multiples are expected to moderate, with EV/EBITDA declining from 14.5x in FY26 to 10.1x by FY28, indicating improving earnings visibility, the report added.
Valuation supported by long-term diversification
JM Financial has retained its positive view on the stock, valuing it at 25 times FY28 estimated earnings to arrive at the revised target price of Rs 225. The brokerage believes Belrise’s expansion into aerospace and defence, segments characterised by higher margins and longer product cycles, adds a new layer of growth beyond its traditional auto exposure, the report noted.
Conclusion
While the Chester Hall acquisition may not materially move earnings in the near-term, it positions the company for diversification into global aerospace and defence markets. The report makes a case for staying invested in a business that is gradually expanding its opportunity set while maintaining stable operating performance.
Disclaimer: This article provides factual analysis only and is not, and should not be construed as, an offer, solicitation, or recommendation to buy or sell securities. Investors must conduct their own independent due diligence and seek advice from a SEBI-registered financial advisor.