Reduce Sansera Engineering; target of Rs 1460: Choice Institutional Equities

Choice Institutional Equities's report on Sansera Engineering

The Aerospace, Defence and Semiconductor (ADS) segment is a key strategic focus for SANSERA and is identified as the primary long-term growth driver for the non-auto business. The management expects ADS to contribute INR 3,000–3,200 to revenue in FY26. The company is actively pursuing high-value added products in ADS and moving towards higher value per part. The ADS division delivered a top line of INR 496 Mn in Q2FY26 and the current capacity for ADS can cater up to about INR 6,000 to 6,500 Mn of the existing orderbook. This segment is showing resilience to geopolitical developments owing to diversified end markets and exemption to aerospace customers. We believe SANSERA's diversified portfolio in segments (auto, non-auto), geographies, customers and product ranges positions it well to navigate market disruption and deliver profitable growth.

Outlook

We revise our FY26/27E EPS estimate downwards by 1.8%/0.1% and maintain our target price of INR 1,460. We value the company at 25x (maintained) on the average FY27/28E EPS. We maintain our ‘REDUCE' rating on the stock, considering the current valuation and limited upside potential from the present level.