Buy Suprajit Engineering; target of Rs 630: Anand Rathi

Anand Rathi is bullish on Suprajit Engineering has recommended buy rating on the stock with a target price of Rs 630 in its research report dated February 17, 2025.

Broker Research

February 18, 2025 / 13:49 IST

Buy

26 Aug, 2025 12:21

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Anand Rathi's research report on Suprajit Engineering

On a consolidated basis, SEL topline increased by 14.8% YoY and remained flat QoQ to Rs8,315 mn. EBITDA increased by 11.2% YoY and 54% QoQ to Rs970 mn. EBITDA margin remained flat YoY and grew by 411bps QoQ to 11.7%. Therefore, PBT grew by 5.4% YoY and grew by ~2x QoQ to Rs603 mn. PAT fell by 17% YoY to Rs334 mn led by higher tax expenses.Overall, Q3FY25 performance was in line with our estimates. Suprajit Controls Division achieved a 5% revenue growth, with EBITDA surging by over 100%, driven by new contracts and better plant performance. The EBITDA margin was 11.8%. Despite sluggishnessin the off-highway segment, Wescon is performing well due to operational excellence projects. Phoenix Lamps Division showed good margin performance. However, top-line growth was lower, with exports at Luxlite witnessed fluctuations. Suprajit Electronics Division impacted by changes in EV market volumes in India, but secured a throttle project from a leading EV two-wheeler customer and global off-highway projects. Restructuring cost for Stahlschmidt Cable Systems (SCS) entity were incurred due to operational inefficiencies Poor demand in (European markets). The Poland plant will be closed, and the German warehouse will be shifted to Hungary. The second tranche of the acquisition, involving China and Canada, is expected to close in Q4FY25 or early Q1FY26.

Outlook

The company’s operational efficiency and its vision to be a global cable player in auto and non auto division provides long term outlook for growth . It aim is to reach double-digit EBITDA margins post Stahlschmidt Cable Systems, (SCS) restructuring. We recommend BUY rating on the stock with target price of ₹630.

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