HDFC Securities: Suprajit Engineering (2QFY19) – Growth drivers intact. Maintain BUY

Suprajit Engineering (SEL) delivered decent revenue growth although with subdued margin performance in 2Q. Consol Revenue at Rs 3.9bn (+16% YoY) led by strong growth in core cable business, offset by muted growth in Phoenix (flat YoY) and seasonally weak quarter for Wescon. Consol EBITDA de-grew 5% YoY to Rs 531mn with disappointing margin at 13.6% led by rise in commodity prices and freight cost. SEL has been able to pass on most of the cost increase, however benefit will come from 3Q (lag effect). Management has given strong outlook for 2H and FY20 led by 1) Improving traction with domestic & export 4Ws OEMs in the cable business 2) Improving utilisation of Phoenix’s H7 line (>50%), and 3)Diversification in its non-auto cable business.

We expect capacity expansion (250mn to 300mn cables), acquisition of new business in 4W cable segment and ramp up of new H7 line of Phoenix are key positives for the company. SEL is also confident of passing on costs (lag effect) and maintained 14-16% EBITDA margin guidance for FY19. We have cut EPS by 13/9% for FY19/20E factoring in margin pressure. Expect EPS CAGR of 15% over FY18-21E. We value the stock Rs 282(20xSept-20E EPS). Maintain BUY

Anouncements from Suprajit

Please find here with Financial Result and Press Release for the Quarter ended September 30, 2018

Please find here with Financial Result for the Quarter ended June 30, 2018

Please find attached the e-Voting Instructions 2013-2014 for Suprajit Engineering Ltd

Please find attached the Polling Paper 2013-2014 for Suprajit Engineering Ltd

Please see attachment for details, the following is just a summary: Results Update: Suprajit reported best quarterly performance in the history of the Company. There was robust growth in PBT,…

Suprajit is pleased to inform the appointment of Mr.N. S. Mohan as President of the Company. He will also be a Board Member of Suprajit Automotive Private Limtied, a wholly…

The standalone sales of Suprajit Engineering for the month of October & November 2013 has grown by 25 percent as compared to the same 2 months last year.

Suprajit Engineering recorded robust sales for the month of October 2013 with highest ever sales in all segments of business. Standalone sales of Suprajit for the month of October 2013…

Suprajit in the News / Media

Suprajit Engineering (SEL) delivered decent revenue growth although with subdued margin performance in 2Q. Consol Revenue at Rs 3.9bn (+16% YoY) led by strong growth in core cable business, offset…

Suprajit Engineering’s Q3FY17 consolidated EBITDA (including Phoenix Lamps – PHLL), at INR421mn, came in line with our estimate. Key highlights: 1) SEL to continue to outperform industry growth by 5-10%…

Suprajit Engineering’s (SEL) consolidated 3QFY17 results came in below expectations owing to the weak performance of its cable business (effect of demonetisation) and a seasonally weak quarter for Wescon Controls.…

The Nifty 50 has turned in a negative return over the past two years (Jan’15–Jan’17) after a 30% rally in CY2014, due to recurring disappointment to earnings with the then…

The Q2 FY2017 earnings conference call of Suprajit Engineering Limited hosted by Anand Rathi Shares and Stock Brokers Limited. For detailed analysis please see attached company report…

Suprajit Engineering (SEL) reported 2QFY17 consol. PAT of Rs.352mn (+76%YoY), largely driven by higher other income with its EBITDA margin at 16.6%(+110 bps YoY). For detailed analysis please see attached…

Suprajit Engineering (SEL) has a enviable track record of reporting robust (20%+) revenue/APAT CAGR over the past decade further complemented by best-in-class RoCEs (30%+) driven by customer diversification, prudent cost…

Suprajit Engineering (SEL) has acquired 100% stake of Wescon Controls, Wichita, USA, through its wholly owned subsidiary Suprajit USA Inc from Shell Topco LP managed by a PE fund Nova…

Healthy growth in 2W helped Suprajit to 16.3% yoy revenue growth. With steady commodity prices, margins grew modestly. The company is expanding business in North America. We maintain a Buy.…

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