Buy Suprajit Engineering: target of Rs 329: Sharekhan

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.