Sansera Engineering had its target price reduced from Rs 1,669 to Rs 1,643 per share by Nomura amid possible tailwinds from US trade tariffs. The research firm maintained its 'buy' stance on the company as fourth quarter margins were in line with its estimates.
Ebitda margin was at 16.3%, in line with Nomura's estimate but lower than consensus estimate of 17.2%. Profit After Tax increased 28% on lower interest expense and higher other income.
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Non-auto segment of the company along with robust diversification across ADS is projected to carry forward the growth trajectory. "The order book increased 16% y-y to INR18.5bn, with 20% coming from the Aerospace, Defence and Semiconductor segment," stated the report.
Management seconded Nomura's projection. "Non-auto: ADS revenue to double in FY26E, led by the addition of a large aerospace customer and ramp-up of semicon; new CEO to drive long-term growth."
Tackling Tariffs
The company reported weak exports in the quarter ended March 31, 2025, due to US trade tariff uncertainties. Management expects to report weaker exports in the first quarter of fiscal 2026 as well.
"We expect US tariff uncertainty to remain an overhang on near-term demand. However, potential for Indian suppliers to gain share from China remains a longer-term tailwind. We expect a modest -8% revenue CAGR in the Auto ICE segment over FY25-27F, however, strong traction in Non-auto (45% CAGR led by ADS) and xEV-Tech Agnostic (30% CAGR led by AL forging) is likely to fuel 14%/18% revenue growth in FY26/27F and drive diversification as well," Nomura said.
The company will focus on "execution with an eye on profitability".
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