Rane Madras shares shoot-up 18% intraday; a conviction buy, says analyst with 20% upside

Rane (Madras) Limited shares shot-up 18 per cent in the intraday trade on Wednesday, maintaining a strong momentum from the past three trading sessions. The stock was trading at Rs 431.95 on the NSE, up by Rs 61.60 or 16.63 per cent around 12:10 pm.   

The shares of Rane Madras gained on a report from Icra which said that the industry size of airbags, a key safety feature in vehicles, will likely to grow to up to Rs 7,000 crore by FY2027 in India, from the current levels of around Rs 2,500 crore. 

This auto component manufacturing company makes steering and suspension systems and boasts of clients including Audi, BMW, Hyundai, Daimler among others.  

Market expert Simi Bhaumik recommends a buy in this counter. The current momentum, she said, will stay. She said that it will reclaim its 52-week high of Rs 452.95 that it had hit in January this year. 

The stock has emerged from its underperformance of several years and has seen a breakout from the level of Rs 422. 

It is a must buy if an investor is looking for a small cap stock in his portfolio, she added. The stock was also recommended by her as BTST to Zee Business.  

The strong traded in five times more volume in the early trading. She has 2-3 months view on this stock for targets of Rs 490 and Rs 520. 

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The growth in the airbag industry, which is one of the fastest growing auto component segments, is expected to be fuelled by the increase in content per vehicle arising from higher regulatory requirements and voluntary increase in the number of airbags per vehicle for enhancing safety, PTI reported quoting Icra. 

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"The mandatory content per vehicle for airbag manufacturers is expected to rise from Rs 3,000-4,000 currently to Rs 8,000-10,000 by October 1, 2023. The average number of airbags per car sold is about three currently, and this is expected to increase significantly post the mandatory implementation of six airbags per car from October 1, 2023," Icra Vice President and Sector Head Vinutaa S said and PTI reported. 

(Disclaimer: The views/suggestions/advises expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)