Reduce Suprajit Engineering; target of Rs 430: Choice Equity Broking

Choice Equity Broking's report on Suprajit Engineering

SEL’s Q2FY26 performance reflects continued operational improvement and disciplined execution despite a challenging global backdrop. Excluding SCS, consolidated revenue and EBITDA grew 7.6% and 18.7% YoY, respectively, with margin at the upper end of the company’s guided range. The growth was driven by strong performance in the Suprajit Controls Division (SCD) and Domestic Cable Division (DCD). The Electronics Division also posted exceptional EBITDA expansion on the strength of customer diversification and improved product traction. However, we fear elevated corporate overheads, ongoing restructuring expenses and subdued export markets to continue to weigh on profitability.

Outlook

We revise our FY26/27E EPS estimate by (2.4)%/2.4% and arrive at a target price of INR 430; valuing the company at 20x (maintained) on the average FY27/28E EPS. Considering near-term margin pressure due to integration cost, we maintain our ‘REDUCE' rating on the stock,