Sansera Engineering shares fall on profit-booking

Over the past six months, shares of the company have gained around 6.5 percent.

Shares of automotive components manufacturer Sansera Engineering traded in the red on February 14 on profit-booking after the company reported a 55 percent on-year jump in net profit.

In the December quarter, net profit came in at Rs 48.4 crore against Rs 31.3 crore in the same quarter of the previous year.

At 10.30 am, the stock was trading at Rs 991.4, down 0.2 percent on the NSE after clocking intraday gains of more than 2 percent in the previous session.

The total revenue on a consolidated basis stood at Rs 713 crore, up 28 percent YoY, with EBITDA at Rs 121 crore and the EBITDA margins at 16.9 percent, down 10 bps on a sequential basis.

“Topline performance at the company outpaced the underlying domestic Auto OEM volume growth and is a positive surprise,” said ICICI Securities. However, the brokerage noted that the company didn’t realise any operating leverage benefits amidst stable gross margin profile which was disappointing and limited the overall margin profile.

Nomura maintained its "buy" rating at Rs 1,342 apiece, saying recovery in the two-wheeler industry will drive growth, likely to expand in double-digits with an additional focus on the premium segment.

In the 2W segment, the premiumisation trend continues to grow  and some of Sansera Engineering’s customers are aggressively adding premium content to their vehicles like HD and Triumph, Choice Broking said.

“We expect the light-weighting and premiumization trend to continue supporting better-than-industry growth for the firm,” the brokerage said.

The firm has started accepting aerospace orders from Q4, which shall have an impact on the bottom line and topline in FY25. The management has increased its capex guidance for FY24, attributing it to capacity expansion, line balancing, and facility build-up, it said.

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Choice Broking anticipates substantial revenue growth for Sansera, driven by an increasing proportion of revenue generated by the non-automotive segment, securing new orders, an increase in the share of aluminum components; and a revival in the export business.

The brokerage maintains its "outperform" call, with a target price of Rs 1,200 a share.

Over the past six months, the stock has gained around 6.5 percent against an 11 percent rise in the Nifty.

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