4 days ago
Dhoot Transmission Valuation Prompts Investors to Consider Booking Profits
Dhoot Transmission makes wiring harnesses and other parts for vehicles.
Its shares rose sharply after the company sold stock to the public.
The company has a strong position in wiring harnesses for two-wheelers and three-wheelers.
It also supplies products used in electric vehicles.
Its sales and profits have grown quickly, and it plans to use IPO money to reduce debt and fund expansion.
However, the shares now cost much more compared with the company’s expected profits.
The article says this price is higher than what similar companies trade at.
Investors who received shares in the IPO may therefore want to take some profits.
Dhoot Transmission shares are up about 68% from their ₹871 IPO issue price.
The stock debuted with a 38% gain on August 17, 2026, after the IPO was subscribed 52.6 times.
At ₹1,460, the stock trades at about 72 times estimated FY26 earnings.
Dhoot Transmission has strong positions in two-wheeler and three-wheeler wiring harnesses and earns about 24% of revenue from electric vehicles.
The article says its growth prospects are attractive, but the current valuation has pulled forward much of the potential upside.
- Who
- Investors and shareholders of Dhoot Transmission, a wiring-harness and auto-parts company.
- What
- The article assesses whether investors should book profits after Dhoot Transmission’s sharp post-IPO rise.
- Where
- The company operates in India’s automotive-components market.
- When
- The article was published on August 29, 2026; the shares debuted on August 17, 2026.
- Why
- The stock’s valuation has risen to about 72 times estimated FY26 earnings, which the article considers high relative to its growth prospects and comparable companies.
Reasons to Hold
Reasons to Book Profits
Business growth
Reasons to Hold
Dhoot Transmission has strong market positions, exposure to electric vehicles, and reported revenue and profit CAGRs of 27% and 17% respectively over FY24-26.
Reasons to Book Profits
The article says these strengths are already reflected in the share price, leaving limited additional upside at the current valuation.
Electric-vehicle opportunity
Reasons to Hold
The company’s largely powertrain-agnostic products, battery-pack assembly and 24% EV revenue exposure position it to benefit from vehicle electrification.
Reasons to Book Profits
The article does not dispute the EV opportunity but argues that investors should weigh it against the stock’s expensive PEG ratio of 2.4x.
Relative valuation
Reasons to Hold
Future earnings are estimated to grow about 30% annually between FY26 and FY28, which could support further expansion if execution remains strong.
Reasons to Book Profits
Dhoot Transmission trades at about 72 times FY26 earnings, compared with 40 times for Motherson Sumi Wiring and 47 times for Minda Corporation.
Key facts
- IPO issue price
- ₹871 per share
- Current share price cited
- ₹1,460
- Gain from issue price
- About 68%
- IPO subscription
- 52.6 times
- FY26 P/E multiple
- About 72x
- Two-wheeler wiring-harness market share
- About 38%
- Three-wheeler wiring-harness market share
- More than 70%
- Estimated FY26-FY28 earnings CAGR
- About 30%
Sources
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