Auto Ancillary Stock: Why did PPAP Automotive shares jump 20% today?

Synopsis: An Indian Microcap company sold its stake in JV to its JV partner, for Rs 100 Crores which is 177 percent higher than the net worth of the JV. 

A microcap stock in the business of developing plastic and driver-based extrusion systems saw its stock surge by 20 percent soon after the firm sold its 50 percent stake in a JV to the Japanese JV partner, which is also engaged into manufacturing automotive parts.

With a market cap of Rs 326Cr, PPAP Automotive Limited saw its stock hit an intraday high of Rs 253 which is 19.9 percent higher than the previous close of Rs 211. Additionally, the stock has given a return of 7 percent since the start of FY26

What’s the News?

PPAP Automotive Limited entered into a Settlement Agreement on January 7, 2026, to sell its entire 50 percent stake in joint venture PPAP Tokai India Rubber Private Limited (PTI) to JV partner Tokai Kogyo Co. Ltd., a Japanese auto ancillary company. The JV had a net worth of Rs 36 crore, and as the settlement was made with Rs 100 crore, which is 177 percent higher than the net worth of the company. 

Both auto ancillary firms specialize in plastic, where the Japanese firm Tokai Kogyo Co. Ltd. is a manufacturer of rubber and plastic automotive parts, including weatherstrips, seals, and exterior components, focusing on lightweight, innovative solutions for better vehicle performance. The 50:50 JV was formed in 2012, but PTI had contributed no turnover last fiscal year to PPAP Automotive Limited despite its 12.49 percent of net worth share contribution. The above mentioned deal is expected to be completed by February 28, 2026.

Business & Financial Overview

Incorporated in 1995 and headquartered in Pune, India, PPAP Automotive Ltd develops plastic and driver-based extrusion systems, plastic injection moulding systems, and high-precision plastic injection tooling for the automotive industry.

In the latest quarter the company saw its YoY revenue fall by 5.4 percent, going from Rs 145 Cr in Q2FY25 to Rs 137 Cr in Q2FY26, while the QoQ went up by 18 percent from Rs 116 Cr in Q1FY26.

The company did make a Net Profits of Rs 2.8 Cr in Q2FY25, but made a loss of  Rs 5 Lakh in Q2FY26. The company has a 3 year profit CAGR of 120 percent, while the sales CAGR for the same period is 10 percent.

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