ICICI Securities research report on Sansera Engineering
We interacted with the management of Sansera Engineering (SEL) to get mid-year update on its business execution and outlook ahead. Following are the key takeaways: 1) Revenue is on course to meet the target of ~40% growth in exports in FY24, including ~50% growth in aerospace segment; 2) supplies to Triumph and Harley for the newly launched indigenised models would add to 2W segment revenue growth along with continued premiumisation of overall 2W market; 3) EBITDAM is on track to be at 17-18% in FY24 and inch up potentially higher in FY25 driven by the rising mix of exports/aerospace; 4) despite capex of INR 2.8-3bn p.a., SEL is confident of crossing ~20% pre-tax RoCE by FY25.
Outlook
We retain BUY on SEL with an unchanged target price of INR 1,133, implying 20x FY25E earnings.
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