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Buy Suprajit Engineering: target of Rs 329: Sharekhan

Sharekhan is bullish on Suprajit Engineering has recommended buy rating on the stock with a target price of Rs 329 in its research report dated May 31, 2021.

June 10, 2021 / 11:58 AM IST
An Edelweiss research report for Q4FY21 says road tonnage continued to improve, evident in e-way bill generation (up 6% QoQ) and improved core trucking rentals. “We estimate tonnage would increase by three–five percent for truckers. Asset-light plays Mahindra Logistics and TCI Express remain our preferred picks due to their ability to scale up/down as the environment demands,” the report said. Edelweiss is bullish on Blue Dart Express due to the pandemic-induced boom in e-commerce and its leaner cost structure. It has retained a ‘buy’ call on Mahindra Logistics, TCI Express and Blue Dart Express.

An Edelweiss research report for Q4FY21 says road tonnage continued to improve, evident in e-way bill generation (up 6% QoQ) and improved core trucking rentals. “We estimate tonnage would increase by three–five percent for truckers. Asset-light plays Mahindra Logistics and TCI Express remain our preferred picks due to their ability to scale up/down as the environment demands,” the report said. Edelweiss is bullish on Blue Dart Express due to the pandemic-induced boom in e-commerce and its leaner cost structure. It has retained a ‘buy’ call on Mahindra Logistics, TCI Express and Blue Dart Express.

 
 
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Sharekhan's research report on Suprajit Engineering


Q4FY21 numbers were strong, with revenue, EBIDTA and PAT improving 31.9%, 48.8% and 89.1%, respectively. We expect Suprajit’s earnings to report a 26.3% CAGR during FY2021E-FY2023E, driven by a 19.2% revenue CAGR and 130 bps improvement in EBITDA margin, with its ROCE improving back to ~20% in FY23E. The stock trades at a 25-30% discount to its average historical P/E multiple of 16.2x and EV/EBITDA multiple of 10.4x its FY2023E estimates.


Outlook


We reiterate our Buy rating on Suprajit Engineering Limited with a revised PT of Rs. 329, factoring its robust value proposition to its domestic and global clients, aided by its leadership position in the domestic cables business and locational advantage vis-à-vis global peers.


For all recommendations report, click here


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first published: Jun 1, 2021 12:58 pm

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