Automobile, Stocks Research

Shriram Pistons & Rings Ltd. – Adapting to the EV Revolution?

Shriram Pistons & Rings is the country's biggest piston and ring manufacturer and exporter, as well as a key provider of engine valves.

(A) About

Shriram Pistons & Rings Ltd primarily manufactures pistons, piston pins, piston rings, and engine valves for various automobile industries in both domestic and export markets.

Shriram Pistons & Rings is India's largest maker and exporter of pistons and rings to discerning customers such as Ford, Honda, Kia, Renault, and WABCO, and it holds the Government of India's 'Trading House' accreditation. It is also the leading supplier of engine valves.

(B) Journey of Shriram Pistons & Rings

(C) Board of Directors of Shriram Pistons & Rings

(D) Shareholding Pattern

Shriram Pistons & Rings shareholding_PA wealth
Shriram Pistons & Rings shareholding_PA wealth

(E) Product Segments

Shriram Pistons & Rings Products_PA wealth
  • Pistons: Shriram Pistons and Rings Ltd. manufactures a wide variety of pistons for a variety of applications, including automotive, industrial, as well as agricultural. Furthermore, Their pistons are made from high-quality aluminium alloys and are designed to provide optimum performance and durability.
  • Rings: Shriram Pistons and Rings Ltd. also manufactures a wide variety of rings for a variety of applications. Moreover, Their rings are made from high-quality cast iron and are designed to provide a good seal between the piston and the cylinder wall.
  • Engine Valves: Shriram Pistons and Rings Ltd. manufactures engine valves for a variety of applications. Their engine valves are made from high-quality steel and are designed to withstand the high temperatures as well as pressures that are found in modern engines.

Market Share

In Internal Combustion Engines(ICE), the company has a market share of around 40-45% across all its product segments. While in CNG vehicles, the company has a dominant market share of around 90%.

(F) Revenue Segments

Shriram Pistons & Rings Revenue_PA wealth

The company had generated 17% of its overall revenue from After Market sales in FY23.

(G) Cost Structure

Shriram Pistons & Rings COsts_PA wealth

(H) Financials of Shriram Pistons & Rings

Shriram Pistons & Rings Financials_PA wealth

The company's revenue has grown at a CAGR of 8.35% over the past 10 years from Rs 1169.71 Cr. in FY14 to Rs 2609.33 Cr. in FY23. Subsequently, The company's PAT has grown from Rs 69.67 Cr. in FY14 to Rs 293.88 Cr. in FY23 at a CAGR of 15.48%. Furthermore, The company's ROE has increased from 12.44% in FY14 to 19.24% in FY23.

DuPont Analysis

Shriram Pistons & Rings Dupont_PA wealth

(I) Management Discussion

  • The company experienced a 26% growth in revenue from operations, increasing from Rs. 2,064.7 Cr. in FY22 to Rs. 2,609 Cr in FY23.
  • The Company's exports increased from Rs. 401 Cr. to Rs. 484.1 Cr. Furthermore, The upward trend of export growth is expected to continue in FY24. However, several international hurdles and geopolitical complexities result in uncertainty that could significantly impact export sales.
  • The overall growth momentum in India's Automotive sector is expected to continue in FY24. Passenger and also the commercial vehicle segments are likely to have significant growth. However, the two and three wheeler segments are likely to rise marginally.
  • The Company acquired a majority stake of 51% in EMF Innovations Pvt Ltd., an e-mobility company, to support its growth strategy as well as reduce business risks. Additionally, the Company also agreed to acquire a majority stake of 75% in Takahata Precision India Pvt Ltd, a manufacturer of plastic injection moulding parts.
  • The company intends to grow by expanding its market share among major OEMs as well as concentrating on the aftermarket in both domestic and overseas markets.
  • The Company focuses on cost reduction through the implementation of affordable automation, digitization, machine interlinking, energy conservation, as well as product productivity development, all of which help the company remain cost-competitive.
  • The company is focusing on forward-thinking technologies such as ethanol blending products, hydrogen fuel solutions, and also non-ICE segments.
  • The company is India's largest exporter of pistons and rings, serving a global clientele including Perkins. Fiat Powertrain, Cummins, BMW, etc.

(J) Strengths & Weaknesses


(i) Diversified Revenue Stream

SPRL diversifies its revenue across various segments: OEMs (highest at 64.1%), aftermarket (17.0%), and exports (18.9%). They cater to the entire auto spectrum (two-wheelers, three-wheelers, PVs, CVs, tractors) and hold healthy market shares within each. Consequently, This diversity mitigates risks from individual sectors or customers. Additionally, their acquisition of EMFI in the electric vehicle drivetrain space further diversifies their revenue beyond traditional engines.

(ii) Strong Technological Support

SPRL has longstanding technical collaborations with leading international technology providers such as KS Kolbenschmidt GmbH for pistons for diesel and gasoline engines since 1965, Riken Corporation for piston rings since 1977 and Fuji Oozx Inc. for engine valves since 1990. It also has a partnership with Honda Foundry Co. Ltd. for supplying to the Honda group since 1993. SPRL has been focusing on research, development and innovation to remain technologically ahead of the competition as well as reducing costs.  


(i) Transition to EV

SPRL faces risks from stricter regulations, particularly regarding the EV transition. Their heavy reliance on the two-wheeler segment, prone to early electrification, could hurt their credit profile. However, they're mitigating this by entering the EV component market through acquisitions.

(ii) Limited Scope of Expansion

SPRL is already a market leader in its operating segments and products, indicating limited scope for growth in its existing revenue streams. However, SPRL’s ability to develop new revenue streams, either through new products or new geographies, will be important to strengthen its business profile.

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References:  Annual Reports, News Publications, Investor Presentations, Corporate Announcements, Management Discussions, Analyst Meets and Management Interviews, Industry Publications.

Disclaimer: The report only represents the personal opinions and views of the author. No part of the report should be considered a recommendation for buying/selling any stock. Thus, the report & references mentioned are only for the information of the readers about the industry stated.

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