Sharekhan's research report on Suprajit Engineering
Suprajit continues to strengthen its value proposition to its domestic and global clients, aided by its leadership position in the domestic cable business and locational advantage to its global peers. Propelled by robust business outlook and prudent capital allocation, we expect Suprajit’s consolidated earnings to report a 31% CAGR during FY2021E-FY2023E, driven by an 18.4% revenue CAGR and 160 bps improvement in EBITDA margin, with its ROCE improving back to in excess of 20% by FY2023E. The stock is trading at 25%-30% discount to its average historical P/E multiple of 16.4x and EV/EBITDA multiple of 10.6x its FY2023E estimates.
We reiterate our Buy rating on Suprajit Engineering Limited (Suprajit) with a revised PT of Rs. 329, factoring its long-term average multiples, owing to its strong business outlook and earnings upgrade.
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