JM Financial is bullish on Suprajit Engineering has recommended buy rating on the stock with a target price of Rs 350 in its research report dated May 30, 2018.
JM Financial's research report on Suprajit Engineering
Suprajit Engineering (SEL) reported 4QFY18 revenues of INR 4.1bn (+13% YoY, +11% QoQ), driven by increase in aftermarket lamp business and domestic OE cable business, in line with increase in domestic 2W and 4W sales. Consol. EBITDA margin stood at 18.1% (flat YoY, +170bps QoQ), driven by higher sales of H7 lamps during 4QFY18. Capacity utilization at H7 line improved during 2HFY18 to c.40% (vs 25%, 2HFY17).
Going forward, exports would strengthen on new order wins from key OEMs such as VW, Ford and Nissan. Led by leadership consolidation in the cable business and improving subsidiaries’ performance, we estimate EPS to witness a CAGR of 21% over FY18–20E. Maintain BUY with TP of INR 350. Below-expected business improvement at PLD and sharp contraction in exports are key risks.
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