Hold Harsha Engineers International; target of Rs 407 Prabhudas Lilladher

Prabhudas Lilladher's research report on Harsha Engineers International

Harsha Engineers International (HARSHA) delivered a steady performance, with revenue rising 7.3% YoY and EBITDA margin improving 228bps YoY to 14.1%. The quarter benefited from strong export momentum, reflecting sustained recovery in industrial demand across Europe and other key markets. The Romania unit reported robust 38% YoY growth in Q2FY26, supported by a favorable product mix of finished goods. The operational greenfield facility, Advantek, is expected to bolster domestic prospects. Meanwhile, increasing wallet share from existing clients is expected to garner ~30% revenue growth in bronze bushings segment in FY26, while management maintains their cautiously optimistic outlook—guiding for high single-digit growth in consolidated business and low mid-teens growth in India-Engineering.

Outlook

The stock is currently trading at a P/E of 20.2x/18.0x on FY27/28E earnings. We roll forward to Sep’27E and maintain our ‘Hold’ rating valuing the stock at a PE of 20x Sep’27E (21x Mar’27E) arriving at a revised TP of Rs407 (Rs402 earlier).