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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