CLSA Ltd. has initiated their coverage for Sansera Engineering Ltd. with an 'outperform' rating and a target price of Rs 4,954, implying a 31% upside to the current market price (CMP).
The brokerage sees Sansera's growth engine "taking wings" aerospace, defence, and semiconductor (ADS) segment. The segment is supported by a strong order book and India's increasing emergence as a viable aerospace manufacturing hub for Original Equipment Manufactuers (OEMs) and Tier-1 suppliers.
Additionally, the ADS business is margin accretive and generates superior asset turns, which should improve Sansera's overall capital efficiency, CLSA underlined.
"Thus, we expect EPS to more than double over the next three years, underpinning our view that Sansera is a compelling 2x in three years story. We initiate coverage with an O-PF rating and a TP of Rs 4,954," the brokerage stated.
CLSA said that it expects the ADS business to scale up rapidly, with revenue increasing 4.5 times over fiscal 2025 and 2027 calendar years.
With a Rs 44 billion order book as of first quarter of FY27, CLSA estimated the revenue from this segment to reach Rs15 billion per annum by FY29, underpinning a 65% compound annual growth rate (CAGR) in FY26-29 CL.
Sansera Engineering Q1FY27
Sansera Engineering reported a 39.2% year-on-year rise in consolidated net profit to Rs 86.6 crore, versus Rs 62.2 crore.
Revenue rose 33.3% year-on-year to Rs 1,021 crore, compared with Rs 766 crore. Earnings before interest, taxes, depreciation and amortisation increased 48% year-on-year to Rs 196 crore, versus Rs 132.4 crore.
Ebitda Margin stood at 19.2%, improving from 17.3% year-on-year.
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