Hold Swaraj Engines; target of Rs 2075: ICICI Direct

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ICICI Direct's research report on Swaraj Engines

Swaraj Engines (SEL) is involved in manufacturing diesel engines (20- 85 hp) for M&M’s Swaraj brand of tractors. Installed capacity - 1.5 lakh units (FY22). Steady ~10% compounding of revenues, EBITDA, PAT over past five years • Net cash positive b/s; consistent cash flow generation; highly capital efficient player with history of >30% return ratios & high dividend payouts.

Outlook

We maintain HOLD rating tracking muted growth prospects in tractor space on high base of FY21 and await structural positives before turning positive. Upgrading our estimates, we now value SEL at Rs 2,075 i.e. 18x P/E on FY24E EPS of ~Rs 115/share (earlier target price Rs 1,680).

More Info

At 16:01 hrs Swaraj Engines was quoting at Rs 1,786.45, down Rs 30.85, or 1.70 percent.

It has touched an intraday high of Rs 1,824.00 and an intraday low of Rs 1,771.10.

It was trading with volumes of 2,665 shares, compared to its thirty day average of 1,748 shares, an increase of 52.48 percent.

In the previous trading session, the share closed up 7.22 percent or Rs 122.45 at Rs 1,817.30.

The share touched its 52-week high Rs 1,960.00 and 52-week low Rs 1,292.55 on 21 September, 2022 and 07 March, 2022, respectively.

Currently, it is trading 8.85 percent below its 52-week high and 38.21 percent above its 52-week low.

Market capitalisation stands at Rs 2,169.55 crore.

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Swaraj Engines - 220922 - icici