Nalanda Securities is bullish on Suprajit Engineering has recommended buy rating on the stock with a target price of Rs 280 in its research report dated December 20, 2018.
Nalanda Securities' research report on Suprajit Engineering
Suprajit Engineering, headquartered in Bangalore was established in the year 1985 is one of the global leader in manufacturing of two - wheeler automotive cables. It manufactures cables across all the segments of automotive industry and gradually gaining market share. We initiate a coverage on Suprajit Engineering Ltd (SEL) recommend a ‘Strong Buy’ with a fair value of INR 280, implying a 22 . 9 % upside potential from the current levels. Our view stems on the fact that a) SEL is quick in acquiring OEMs in low penetrated 4 Ws segment. b ) Increasing touch base in the gigantic aftermarket . c ) Expanding into newer segments in non - automotive cables . d ) Strategically looking for acquisitions into LEDs & other segments . e) Growing in extensive export market.
We recommend a Strong Buy on Suprajit Engineering with a average fair value of INR 280 per share, valuing the company with P/E and EV/EBITDA Methodology. In the past three years, it use to trade at a forward P/E of ~ 20 x and EV/EBITDA of ~ 11. 5 x . We have assigned similar multiples on account of huge potential and growth opportunities.
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