HDFC Securities: Suprajit Engineering (2QFY19) – Growth drivers intact. Maintain BUY

Suprajit Engineering (SEL) delivered decent revenue growth although with subdued margin performance in 2Q. Consol Revenue at Rs 3.9bn (+16% YoY) led by strong growth in core cable business, offset by muted growth in Phoenix (flat YoY) and seasonally weak quarter for Wescon. Consol EBITDA de-grew 5% YoY to Rs 531mn with disappointing margin at 13.6% led by rise in commodity prices and freight cost. SEL has been able to pass on most of the cost increase, however benefit will come from 3Q (lag effect). Management has given strong outlook for 2H and FY20 led by 1) Improving traction with domestic & export 4Ws OEMs in the cable business 2) Improving utilisation of Phoenix’s H7 line (>50%), and 3)Diversification in its non-auto cable business.

We expect capacity expansion (250mn to 300mn cables), acquisition of new business in 4W cable segment and ramp up of new H7 line of Phoenix are key positives for the company. SEL is also confident of passing on costs (lag effect) and maintained 14-16% EBITDA margin guidance for FY19. We have cut EPS by 13/9% for FY19/20E factoring in margin pressure. Expect EPS CAGR of 15% over FY18-21E. We value the stock Rs 282(20xSept-20E EPS). Maintain BUY

Anouncements from Suprajit

The overall H1 performance has been satisfactory, despite headwinds, with improvements in operational revenue and EBIDTA. The results for the first half had certain one-off impacts relating to Wescon paycheck…

“Suprajit Engineering Limited hosted by Anand Rathi Share and Stock Brokers” SPEAKERS: MR. N S MOHAN – MANAGING DIRECTOR AND CEO, SUPRAJIT ENGINEERING LIMITEDMR. AKHILESH RAI – CHIEF STRATEGY OFFICER…

We are inviting our Inventors to Q2 FY22 Result Conference Call which hosted by Anand Rathi Research on 11-Nov-2021, at 11:00 am IST.

Suprajit is pleased to announce that it has signed a Definitive Share and Asset Purchase Agreement to acquire Light Duty Cable (LDC) business unit on October 28, 2021 with Kongsberg…

The Board of Directors at their Meeting held on 29.05.2021 had recommended Final Dividend of Re.1/‐per Equity Share of face value of Re.1/‐each for the financial year 2020‐21 and the…

Suprajit is pleased to announce the launch of its new Suprajit Technology Centre (STC) at 141, Jigani‐Bommasandra Link Road, Bangalore, on the auspicious 75th Independence Day of India. Suprajit will…

Please find enclosed invitation for Investors conference call to be held on August 13, 2021 at 02:00 PM IST.

Suprajit in the News / Media

Suprajit Engineering Limited’s (Suprajit’s) Q2FY2022 numbers were better than expectations, with revenue, EBIDTA, and PAT improving by 36.5%, 62.6%, and 99.8%, respectively, on a q-o-q basis. Net revenue improved by…

Suprajit Engineering (SEL) reported consolidated EBITDA margin of 16.2% (-40bps YoY,+260bps QoQ), 140bps above JMFe driven by strong margin performance in automotive cable division. Management expects the headwinds such as…

Suprajit Engineering (SEL) reported Q2FY22 EBITDA of INR801mn beating our estimate by 22% due to a strong revenue performance. Acceptance of price hike for earlier quarters by OEMs (~2% of…

Suprajit Engineering (SEL) displayed resilient performance on the back of strong margin performance in the Automotive cable business. Revenue grew 11.4% YoY to Rs. 4.94bn led by 10% YoY increase…

Posted near in-line set of numbers and stable outlook provided for existing businesses. Expect new acquisition and new products from STC to be new gems in the coming few years…

Acquisition of Kongsberg’s Light Duty Cable (LDC) business sets stage for SEL to transform from a contender to global leader in cables with several benefits. Global cable business & aftermarket…

We reiterate our Buy rating on Suprajit Engineering Limited with a revised PT of Rs. 329, factoring its robust value proposition to its domestic and global clients, aided by its…

We reiterate ‘BUY’ on Suprajit Engineering (SEL) with a revised target multiple of 20x (earlier 15x; close to historical peak, but at 20% discount to Motherson’s domestic business) and raise…

Suprajit Engineering (SEL) delivered decent revenue growth although with subdued margin performance in 2Q. Consol Revenue at Rs 3.9bn (+16% YoY) led by strong growth in core cable business, offset…

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