Sansera Engineering Ltd. share price target

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.

Sansera Engineering’s (SEL) Q3FY23 EBITDAM came in at 15.6%, impacted by 12% QoQ revenue decline despite a 200bps higher gross margin (GM) QoQ. GMn recovery was led by reversal of the optical effect of falling input commodity costs, which got passed along with better export mix.

We interacted with Sansera Engineering (SEL) management to understand the outlook on its business and its plans.

Sansera Engineering’s (SEL) Q2FY23 EBITDA margin at 16.8% was a tad lower than our estimate of 17.2%, with gross margin (GM) down ~400bps QoQ, though was supported by strong operating leverage benefits.

Sansera Engineering’s (SEL) Q1FY23 operating performance was slightly below our estimate as revenue (down ~8% QoQ) was impacted by weak exports, though EBITDAM beat our estimate at 17%, up ~60bps QoQ.

We recently interacted with the management of Sansera Engineering (SEL) for investor meetings. Key takeaways from the meetings are recent order win of Rs300mn p.a. (10-year order) from BMW Motorrad, which would start getting executed FY24E onwards, with scope of fresh orders from the same customer.

The Company will not receive any proceeds of the Offer for Sale by the Selling Shareholder. (up to 8,635,408 equity shares by Client Ebene Limited, up to 4,836,723 equity shares by CVCIGP II Employee Ebene Limited, up to 2,058,069 equity shares by Subramonia Sekhar Vasan; up to 571,376 equity shares by Unni Rajagopal Kothenath; up to 571,376 equity shares by...

Sansera Engineering Limited Issue Open: Sep 14 Sep 16 2021 Price Band: Rs. 734 744 (Discount of Rs 36 for all eligible employees) Issue Size: Rs.1265.7 1282.9 cr (1.724 cr shares entirely offer for sale) Reservation for: QIB Upto 50% eq sh Non Institutional atleast 15% eq sh Retail atleast 35% eq sh Employee Reservation: eq sh aggregating Upto Rs.9 cr