LKP Research's research report on Sansera Engineering
We witnessed a decent performance in Q2 FY25 for the company, wherein the top line grew by 10.2% on consol basis, which was mainly driven by the Tech Agnostic, x-EV and the 2W ICE business. Q2 sales were mainly driven by 2W ICE business which grew by 21%, while PV de-grew by 8%, Tech Agnostic and xEV posted a whopping 53% sales growth, while Non Auto sales dropped by 20% on the back of weak performances from Agri and OTR segments. Aerospace business also posted muted performance as it showed a flattish growth yoy. EBITDA grew by 13% yoy and 4.4% qoq at ₹1.33 bn, while margins came at 17.4%, up from 17% yoy and 30 bps up qoq on better product mix tilted towards exports (32% of topline), prudent cost control measures and operating leverage along with benign RM prices. PAT was reported at ₹519 mn, a growth of 9.2% yoy, and 3.5% qoq. The yoy growth came despite a 14.8% hike in depreciation led by new plant commencement and increased interest expenses on debt couple of quarters ago.
Outlook
Keeping in view the above factors, we maintain our BUY rating and comfortably assign a forward P/E multiple of 28x on FY26 EPS to arrive at our TP of ₹1,676, with an upside potential of 13%.
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