B&K Securities initiated coverage on Sansera Engineering Ltd. with a ‘buy’ rating and target price of Rs 1,601 per share, citing scale and diversification of high margin non-auto components, improvement in RoCE/EoE and strong balance sheet.
Sansera is a precision engineering company specialising in forged and machined components for auto and non-auto sectors like aerospace, defence, semi-conductor, off-road, and agriculture. The key products include connecting rods, crankshaft assemblies, rocker arms and gear shifter forks.
The brokerage has a long-term positive outlook on the Sansera Engineering, driven by its strong position in the ICE segment. “The company presents an attractive long-term investment opportunity, backed by strong revenue visibility across segments, diversified product portfolio and entry into high-margin segment,” it added.
The company’s strong global presence with approximately 32% of revenue and 62% of the order book from the overseas markets across both auto and non-auto segments, is another factor that supports B&K Securities’ coverage initiation.
Sansera’s aerospace, defence and semi-conductor or ADS segment is gaining traction, backed by a strong order book of over Rs 370 crore and recent direct supply wins from Airbus marks a key milestone in the aerospace plans.
“Additionally, the company’s focus on new product development, adaptability to EV and hybrid platforms, entry into high-margin non-auto sectors like ADS, growing overseas business, improvement in Sweden operations and robust order book across segments support the growth prospects,” it added.
Some of the key risks include EV risk, slowdown in automotive segment, customer concentration, raw material fluctuations, execution risk and currency and export risk.
As per B&K Securities, Sansera presents an attractive investment opportunity, backed by a strong revenue visibility with an extensive product portfolio across different segments and margins expansion.
The company is expected to see improvement of exports from current 32% levels to 35% levels over 3-5 years, strong order book with 62% exposure to international markets, de-risking from the traditional auto ICE business to powertrain agnostic vehicles and non-auto diversification, it added.
. Read more on Markets by NDTV Profit.Sansera’s ADS segment is gaining traction, backed by a strong order book of over Rs 370 crore and recent direct supply wins from Airbus marks a key milestone in the aerospace plans. Read MoreMarkets, Business, Notifications
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