Buy Sansera Engineering; target of Rs 1279: ICICI Securities

ICICI Securities's research report on Sansera Engineering

Sansera Engineering’s (SEL) EBITDAM was flat QoQ at 17%, despite the Red Sea disruption adversely impacting supply chain costs. SEl's order book stands at INR 15.9bn, with ~52% from tech-agnostic/EV/non-auto segments; most orders are likely to mature around FY27. SEL expects a revenue boost from a recovery in exports, premiumisation in 2Ws and rising scale of aluminium forging/aerospace segment in coming quarters. It is confident of ~40–50% growth in the aerospace segment in FY25 (INR 1.1bn revenue in FY24), and ~50% growth for the next two–three years henceforth, using its newly-added facility.

Outlook

We factor in EBITDAM of ~18% for FY25/26E led by improving mix and scale. Maintain BUY with a DCF-based revised TP of INR 1,279 (earlier: INR 1,276), implying 24x FY26E earnings.