Sansera Engineering Ltd. share price target

We maintain our BUY rating on the stock.

Broadly in line with our estimate, Sansera’s Q3 consolidated EBITDA grew 5% y/y to Rs1.27bn. We expect its outperformance to continue, thanks to greater focus on xEV (drivetrain), tech-agnostic (aluminium forgings) and non-auto (aerospace, Defence, semiconductor) components.

We maintain our BUY rating on the stock.

We maintain our BUY rating on the stock.

We maintain a BUY rating and continue to confidently award a Forward PE multiple of 22x on FY26 EPS to arrive at our TP of Rs 1270 share.

Sansera Engineering’s (SEL) EBITDAM was flat QoQ at 17%, despite the Red Sea disruption adversely impacting supply chain costs.

We maintain a BUY rating and continue to confidently award a Forward PE multiple of 20x on FY26 EPS to arrive at our TP of Rs 1,220/share.

We initiate coverage on Sansera Engineering Ltd (Sansera) with a BUY recommendation and price target of Rs 1,210/share, implying an upside of 26% from the CMP.

We interacted with the management of Sansera Engineering (SEL) to get mid-year update on its business execution and outlook ahead. Following are the key takeaways: 1) Revenue is on course to meet the target of ~40% growth in exports in FY24, including ~50% growth in aerospace segment; 2) supplies to Triumph and Harley for the newly-launched indigenised models would add to 2W segment revenue growth along with continued premiumisation of overall 2W market.

Sansera Engineering’s (SEL) Q1FY24 EBITDAM at 17.3% was up ~180bps QoQ driven mainly by improved exports mix. Orderbook stands at INR 17bn with ~53% of it from tech-agnostic/EV/non-auto segments. SEL expects its revenue to be boosted by recovery in the 2W segment, premiumisation in 2Ws and increased content per vehicle.

We recently visited various facilities of Sansera Engineering (SEL) and interacted with the senior management to understand their business strategy and outlook. Following are the key takeaways: a) SEL is aiming towards ~Rs35bn revenue by FY25 vs Rs23bn in FY23 with growth being driven by domestic 2W demand revival, return of growth in export markets and expansion of the aerospace segment.

Sansera Engineering’s (SEL) Q4FY23 EBITDA margin at 15.3% was down ~30bps QoQ, and lower than consensus estimate of 17%, due to higher RM costs and ~100bps impact of one-time year-end adjustments including inventory provisions and customer related costs.

Sansera Engineering’s (SEL) earnings remained hovered around Rs400mn/quarter throughout FY22-FY23 due to weak demand from domestic 2Ws / export markets impacting earnings growth. We interacted with the management to understand their outlook on business and their plans.