Schaeffler India Soars Following Successful Completion of KRSV Innovative Auto Solutions Acquisition

11 Sep, 2023

Schaeffler India Soars Following Successful Completion of KRSV Innovative Auto Solutions Acquisition

Schaeffler India witnessed a substantial uptick of nearly 2 percent, reaching Rs 3,646.50 in the early trading hours of September 11. This surge was prompted by the company's recent acquisition of KRSV Innovative Auto Solutions, securing complete ownership.

In August, Schaeffler India had officially announced its acquisition of KRSV Innovative Auto Solutions Pvt Ltd, commonly known as Koovers. The transaction amounted to approximately Rs 142 crore. Koovers, headquartered in Bengaluru, specializes in offering business-to-business (B2B) solutions for spare parts within the Indian aftermarket workshop sector.

Sharekhan, a prominent broking house, released a report on September 6, maintaining a 'buy' rating for Schaeffler India's stock while revising the price target to Rs 3,928 per share.

Sharekhan's rationale behind this positive outlook lies in the belief that the acquisition of KRSV will significantly strengthen Schaeffler India's presence in the automotive aftermarket arena, particularly through the development of a robust online platform. Despite challenges in export markets in the short term, Sharekhan anticipates that Schaeffler Group's strategic relocation strategy will continue to be advantageous for Schaeffler India due to its alignment with the company's structure.

Furthermore, Schaeffler India's well-diversified revenue sources across different geographical areas help mitigate the risk of severe declines in case of disruptions in specific regions.

The company stands to gain from its ongoing localization efforts, strategic expansion in export markets, and a strong market segment presence. Sharekhan also predicts that successfully entering the system solution supply for electric vehicles (EVs) will bolster Schaeffler India's earning potential through increased volume and localization.

In conclusion, Schaeffler India's recent acquisition and strategic moves have positioned the company for continued growth and success in the competitive automotive industry, earning the confidence of Sharekhan and investors alike.