Buy Suprajit Engineering; target of Rs 326: Axis Direct

Axis Direct's research report on Suprajit Engineering

Q3FY18 consolidated EBITDA came in at Rs 582 mn (+22% YoY, +4% QoQ), 5% below est. on lower profitability at Wescon. Management on call reiterated it will continue to outperform industry growth by 5-10%, led by market share gains and increase in content supplied.

Outlook

Suprajit has consistently outperformed industry on revenue/EBITDA CAGR over the past decade, while maintaining RoCE at ~30% With capacity in place, the company is well placed to capitalize on growth opportunities (insignificant capex over next 2 years). Reiterate BUY with target price of Rs 326 (20x FY20E EPS). For all recommendations report, click here

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