Buy Swaraj Engines; target of Rs 2476: HDFC Securities

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26 Aug, 2025 12:21

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HDFC Securities' research report on Swaraj Engines

Swaraj  Engines  Ltd  (SEL)  reported  strong  4QFY18 revenues at Rs 1.85bn (+15.2% YoY). Engine volumes for the quarter came in at 21,780 units (+9.8% YoY) while realization improved to Rs 85,060 (+5.0% YoY). EBITDA for 4QFY18 grew  by  18.4%  YoY  to  Rs 285mn and EBITDA margin stood at 15.4% (+41bps YoY).  Margin  improvement  was driven by ~19bps improvement in each, gross margins  and employee expenses. APAT for 4QFY18 came in at Rs 178mn (+17.0% YoY).

Outlook

We estimate 16/18% revenue/PAT CAGR over FY18-FY20E. At CMP of Rs 2,064, SEL trades at 26.3/22.5x of FY19/20E EPS. We recommend BUY with a TP of Rs 2,476 (27x FY20E EPS).For all recommendations report, click here

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