This auto-ancillary stock engaged in the manufacturing and trading of automotive and non-automotive cables, halogen lamps, LED drop-in solutions, and mechanic products, in focus after AnandRathi gave a target price of Rs. 630, which has an upside potential of 50 percent.
Stock Price Movement:
With a market capitalization of Rs. 5,803.28 crores, the shares of Suprajit Engineering Limited were currently trading at Rs. 423.10 per equity share, rising nearly around 0.92 percent from its previous day’s close price of Rs. 419.25.
What is the news?
AnandRathi has given a “buy” rating to Suprajit Engineering Limited, with a target price of Rs. 630. This target price reflects a 50.26 percent potential upside from the previous day’s close of Rs. 419.25 per equity share.
Target Rational:
According to AnandRathi, the company aims to reach double-digit EBITDA margins post Stahlschmidt Cable Systems, (SCS) restructuring. Its operational efficiency and its vision to be a global cable player in auto and nonauto divisions provide a long-term outlook for growth.
Future growth prospects:
Suprajit Engineering Limited plans to expand its global operations in Morocco, Canada, and China within the next 6–9 months. The company focuses on improving operational efficiency and acquiring new customers to achieve double-digit EBITDA margins. It expects SCS to contribute an additional $40-45 million in revenue in the next financial year.
New Product Development:
Suprajit Engineering’s Electronics Division is expanding its product portfolio with actuators and braking systems. The division plans to penetrate non-EV segments and enhance offerings to global OEMs, leveraging its technology center in Bangalore for innovation and development.
Market Presence:
Suprajit Engineering, a key player in the auto ancillaries sector, leverages its extensive manufacturing capabilities to produce an impressive 150 million cables annually, serving both domestic and international markets.
Product portfolio:
The company is engaged in manufacturing a wide range of products, including automotive cables like parking brake and PTO cables, non-automotive cables, halogen and LED lighting solutions, and mechanical products such as seat latches and steering locks, catering to diverse industry needs.
Recent quarter results:
Suprajit Engineering Limited’s revenue has increased from Rs. 724 crore in Q3 FY24 to Rs. 832 crore in Q3 FY25, which has grown by 14.92 percent. The net profit has dropped by 21.21 percent from Rs. 40 crore in Q3 FY24 to Rs. 33 crore in Q3 FY25.
Suprajit Engineering Limited’s revenue and net profit have grown at a CAGR of 12.74 percent and 4.50 percent, respectively, over the last five years.
In terms of return ratios, the company’s ROCE and ROE should be 13.9 percent and 13 percent, respectively. Suprajit Engineering Limited has an earnings per share (EPS) of Rs. 9.47, and a debt-to-equity ratio of 0.70x.
Written By – Nikhil Naik
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