Add Sansera Engineering Ltd For Target Rs. 1,425- Choice Broking Ltd
Q4FY25: Revenue slightly ahead, EBITDAM & PAT below street expectations
* Consolidated revenue for Q4FY25 stood at INR 7,817Mn, up by 4.8% YoY and up 7.4% QoQ (vs consensus est. of INR 7,670Mn).
* EBITDA for Q4FY25 was reported at INR 1,271Mn, (vs consensus est. of INR 1,352Mn), flat on YoY and QoQ basis. EBITDA margin was down 78bps YoY and 120bps QoQ to 16.3% (vs consensus est. of 17.6)
* PAT for Q4FY25 reported at INR 592Mn (vs consensus est. of INR 622Mn), up 28.4% YoY and 6.3% QoQ.
Strong Growth Visibility in ADS Segment: The Aerospace, Defense, and Semiconductor (ADS) segment delivered INR 1,327 Mn in FY25 revenue, growing 15% YoY, with Q4FY25 accelerating to INR 434 Mn, up 43% YoY. The segment is expected to contribute INR 2,800–3,000 Mn in FY26, driven by the addition of a large Aerospace OEM and the commencement of semiconductor revenues. As of March 2025, ADS accounted for 28% of the total INR 18,511 Mn order book. With the new ADS facility fully operational and gross block nearing INR 3,000 Mn including special processes, the facility is expected to generate INR 6,000–6,500 Mn in revenue, implying an asset turn of ~2x. We expect the ADS segment’s share of total sales to increase from 4.4% in FY25 to 11.2% by FY27, driven by strong order visibility and execution ramp-up.
Diversification Strategy Gaining Momentum: Company’s focus remains on diversifying revenue streams and reducing reliance on traditional ICE components. The contribution of the ICE segment to total revenue declined to 73.6% in FY25 from 75.4% in FY24, a notable shift given the high base. The broader strategy is to achieve a 40% revenue contribution from the combined tech-agnostic auto, xEV, and non-auto segments. In FY25, the xEV and techagnostic businesses grew 28.6% year-on-year and contributed approximately 15% to total revenue. The order book supports this diversification push, with over 60% linked to international markets and 28% from the high-margin ADS segment. We expect the ICE share to further decline to 67% in FY27, with a significant shift in contribution coming from the non-automotive segment, rising from 12% in FY25 to 18% in FY27
View and Valuation:
SENSERA strong growth visibility in the ADS segment, coupled with steady progress in diversifying away from ICE components, supports a positive long-term outlook. Backed by an improving revenue mix and execution ramp-up, we revise our rating from BUY to ADD and raise our target price to INR 1,425 (25x FY27E EPS) from INR 1,374, reflecting upward EPS revisions of +9.7% for FY26 and +5.3% for FY27.
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SEBI Registration no.: INZ 000160131
