Anand Rathi IPO report on Harsha Engineers International
Harsha Engineering International Limited (“HEIL”) is the largest manufacturer of precision bearing cages, in terms of revenue, in organised sector in India, and amongst the leading manufacturers of precision bearing cages in the world. HEIL offers diversified suite of precision engineering products across geographies and end-user industries. HEIL has approximately 50-60% of the market share in the organised segment of the Indian bearing cages market and 6.5% of the market share in the global organised bearing cages market for brass, steel and polyamide cages in CY 2021. They offer a wide range of bearing cages starting from 20 mm to 2,000 mm in diameter and their bearing cages find its application in the automotive, railways, aviation & aerospace, construction, mining, agriculture, electrical and electronics, renewables sectors etc.
Valuation and Outlook
At the upper end of the IPO price band HEIL is valued at 32.7x its post issue FY22 EPS of Rs.10.1, considering its dominant market share (50- 60% in Indian bearing market), Healthy ROE & ROCE as of 17.6% & 27% respectively and strong clientele with long standing relationships We recommend ‘SUBSCRIBE’ rating to this IPO.
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