India Ratings and Research stated that the upgrade reflects Pricol’s improving scale of business and the agency’s expectation of the same continuing over the medium term, supported by continued premiumisation of its products across segments while maintaining a strong credit profile.

The upgrade also reflects diversification of the product portfolio as the company expands its operations into injection moulded plastic components (business acquired from Sundaram Auto Components in January 2025) and the company’s ability to diversify into the electric vehicle (EV) segment; although, the same remains in line with industry-level penetration.

The ratings also reflect Pricol’s ability to continue to generate strong cash flows and maintain a robust liquidity position over the medium term.

India Ratings further said that a significant improvement in the consolidated scale of profitability while maintaining the credit metrics along with revenue diversification, all on a combined and sustained basis, could lead to a positive rating action.

However, a decline in the consolidated profitability margins, leading to the net adjusted leverage exceeding 1.5x on a sustained basis, could lead to a negative rating action.

Pricol manufactures more than 5,200 product variants such as instrument clusters/telematics, fuel pump modules, oil and water pumps, fuel level sensors, temperature and pressure sensors. The company’s manufacturing units are located in Gurugram (Haryana), Phulgaon (Pune), Pantnagar (Uttarakhand) and Sricity (Andhra Pradesh).

The scrip shed 0.84% to currently trade at Rs 621.50 on the BSE.