Suprajit - New Products, Acquisition Synergies To Drive Next Leg Of Growth; Nirmal Bang Initiates With A Buy

Nirmal Bang Report

We initiate coverage on Suprajit Engineering Ltd. with a Buy rating. We are positive on the company due to-

1. The recovery in the underlying industry.

2. Synergies through acquisition to help add new clients and products to its portfolio.

3. New products to help drive content per vehicle.

4. The advantages of scale and low cost production that helps Suprajit maintain cost leadership vis-a-vis its peers on the global platform.

Furthermore, Suprajit maintains a strong free cash flow generating model with nominal capex requirements. We are building in revenue/ Ebitda of 16%/ 25% over FY24–26E along with return on equity/ return on capital employed of 20.1%/ 23% for FY27E.

We value Suprajit at 27 times Sept’26E earnings per share to arrive at a target price of Rs 711. In line with the five-year mean multiple.

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