Hold Harsha Engineers International; target of Rs 402: Prabhudas Lilladher

Prabhudas Lilladher recommended hold rating on Harsha Engineers International with a target price of Rs 402 in its research report dated August 07, 2025.

Broker Research

August 07, 2025 / 15:14 IST

hold

26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on Harsha Engineers International

Harsha Engineers International (HARSHA) delivered a decent performance, reporting a 6.4% YoY increase in revenue, although EBITDA margin contracted by 90bps YoY to 15.2%. The quarter saw signs of recovery in European demand, supporting an ~18% YoY revenue growth in the Romania operations, while demand from the US softened due to ongoing tariff-related uncertainties. Domestic demand showed improvement, driven by a pickup in industrial activity, though the auto segment remained weak. The recent commercialization of Harsha’s greenfield expansion, Advantek, is expected to support domestic growth. With strong traction in the bushings segment, management anticipates ~30% YoY growth in bushing revenue and maintains a high single-digit growth guidance for the consolidated business in FY26.

Outlook

The stock is currently trading at a P/E of 26.5x/22.3x on FY26/27E earnings. We revise our rating from ‘Accumulate’ to ‘Hold’ given the recent appreciation in stock price with a TP of Rs402 (Rs398 earlier), valuing the company at a PE of 21x Mar’27E (same as earlier).

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