Buy Suprajit Engineering; target of Rs 725: Emkay Global Financial

Emkay Global Financial is bullish on Suprajit Engineering has recommended buy rating on the stock with a target price of Rs 725 in its research report dated August 18, 2024.

Broker Research

August 20, 2024 / 11:00 IST

BUY

Emkay Global Financial's research report on Suprajit Engineering

Suprajit Engineering (SEL)’s Q1 performance was muted (6% miss on EBITDA estimate); it announced buyback of up to ~1.3% of the current market cap at Rs750/sh. Mgmt reiterated the growth outlook is improving (10% for FY25) on strong order-win traction in the global business and ramp up of new products like brakes. We believe SEL would continue benefiting from market-share gains on industry consolidation (e.g. recent SCS acquisition; refer to our note), higher content (on new products), and domestic 2W industry recovery, even as the global business is starting to improve. We trim FY25E/26E EPS by ~3% on the Q1 miss and introduce FY27 estimates, building in a 23%/41% rev./EPS CAGR for FY24-27E.

Outlook

We retain BUY; raise TP to Rs725/sh at 25x Jun-26E PER (rolledover, multiple upgraded in line with LTA from 22x earlier on improving outlook).

For all recommendations report, click here