Sansera Engineering Mid-Year Update: On Track to Meet Targets, Poised for Strong Growth
Sansera Engineering (SEL) has provided a mid-year update on its business execution and outlook, with the following key takeaways:
- Revenue is on track to meet the target of ~40% growth in exports in FY24, including ~50% growth in the aerospace segment.
- Supplies to Triumph and Harley for the newly launched indigenised models would add to 2W segment revenue growth, along with continued premiumisation of the overall 2W market.
- EBITDAM is on track to be at 17-18% in FY24 and inch up potentially higher in FY25, driven by the rising mix of exports/aerospace.
- Despite capex of INR 2.8-3bn p.a., SEL is confident of crossing ~20% pre-tax RoCE by FY25.
Outlook
ICICI Securities retains a BUY rating on SEL with an unchanged target price of INR 1,133, implying 20x FY25E earnings.
Analysis
SEL’s mid-year update is positive, with the company on track to meet its revenue and profitability targets for FY24. The growth in exports and aerospace is particularly encouraging, as it highlights the company’s strong global position and its ability to tap into high-growth markets.
SEL’s confidence in crossing ~20% pre-tax RoCE by FY25, despite capex of INR 2.8-3bn p.a., is also noteworthy. This suggests that the company is efficiently managing its capital and is well-positioned for long-term growth.
Overall, SEL’s mid-year update is reassuring and reinforces the company’s strong fundamentals. The company’s focus on exports, aerospace, and high-growth markets bodes well for its future growth prospects.
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