Prabhudas Lilladher's research report on Harsha Engineers International
We revise our FY26/27E EPS estimates by -12.7%/-19.8% factoring in continued slowdown in Romania. Harsha Engineers International (HARSHA) reported a soft quarter with a 2.0% YoY revenue decline and a sharp 491bps YoY EBITDA margin contraction to 9.4%, mainly due to bad debts in the Solar EPC segment. Domestic Engineering demand remains resilient aided by inventory restocking and early signs of revival in industrial demand, though key export markets, including Europe and the USA, continue to experience weakness due to global demand slowdown. Pain persists in Romania due to lower offtake by customers while China’s performance remained satisfactory. Amid geopolitical and demand uncertainty in global markets, management guides for low teens revenue growth in India Engineering business driven by domestic strength while the consolidated business is expected to grow at a high single digit in FY26.
Outlook
The stock is currently trading at a P/E of 23.5x/19.7x on FY26/27E earnings. We maintain ‘Accumulate’ rating with a revised TP of Rs 398 (Rs440 earlier), valuing the company at a PE of 21x Mar’27E (21x Sep’26E).
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