Sharekhan's research report on Suprajit Engineering
Suprajit Engineering Ltd.’s (SEL’s) Q2FY23 results exceeded expectations, led by a sharp improvement in LDC biz’s operational performance. Revenue, EBITDA and PAT beat estimates by 4.7%, 27.8% and 30%, respectively. We maintain our positive view of the company and expect its LDC biz to be EBITDA positive from Q3 and margin normalisation in FY24E. Suprajit’s earnings to clock a 24.3% CAGR during FY2022-FY2024E, driven by a 27.2% revenue CAGR, partially offset by a 50bps decline in EBITDA margins. Stock trades at of P/E multiple of 17.2x and EV/EBITDA multiple of 11.6x its FY24E estimates.
We reiterate a Buy on Suprajit Engineering Limited with an unchanged PT of Rs.386, factoring its robust value proposition to its domestic and global clients and comfortable valuations.