Sharekhan has given Buy recommendation for Suprajit Engineering with a target price of Rs. 329 in its research report issued on May 31, 2021
Sharekhan’s research report on Suprajit Engineering
Q4FY21 numbers were strong, with revenue, EBIDTA and PAT improving 31.9%, 48.8% and 89.1%, respectively. We expect Suprajit’s earnings to report a 26.3% CAGR during FY2021E-FY2023E, driven by a 19.2% revenue CAGR and 130 bps improvement in EBITDA margin, with its ROCE improving back to ~20% in FY23E. The stock trades at a 25-30% discount to its average historical P/E multiple of 16.2x and EV/EBITDA multiple of 10.4x its FY2023E estimates.
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 leadership position in the domestic cables business and locational advantage vis-à-vis global peers.