Add Sansera Engineering Ltd For Target Rs.1,425 By Choice Broking Ltd
Strategic Diversification and High-Growth Non-Auto Focus: SANSERA’s key strategic focus is the Aerospace and Defence/Semiconductors (ADS) segment, identified as the primary long-term growth driver for the non-auto business. The management expects ADS to double its revenue in FY26. The company is actively pursuing high-value added products in ADS and moving towards higher value per part. This segment is showing resilience to geopolitical developments owing to diversified end markets and exemptions to aerospace customers. The long-term vision for ADS is to achieve an order book of INR 10,000Mn in three years, with INR 7,500Mn already in pipeline. We believe SANSERA's diversified portfolio across segments (auto, non-auto), geographies, customers and product ranges positions it well to navigate market disruptions and deliver profitable growth.
View and Valuation: We revise our FY26/27 EPS estimates down by 9.6%/8.7%, and maintain our target price of INR 1,425; valuing the company at 25x (maintained) on the average FY27/28E EPS, while we introduce FY28 estimates. We maintain our ‘ADD' rating on the stock.
Q1FY26: Revenue and EBITDA below expectations
* Revenue was up 3.0% YoY and down 2.0% QoQ to INR 7,663Mn (vs CIE est. at INR 8,183Mn).
* EBITDA was up 3.6% YoY and up 4.0% QoQ to INR 1,321Mn (vs CIE est. at INR 1,395Mn). EBITDA margin was up 10bps YoY and up 99bps QoQ to 17.2% (vs CIE est. at 17.0%).
* PAT was up 25.5% YoY and up 5.2% QoQ to INR 622Mn (vs CIE est. at INR 590Mn).
Robust Order Book and Future Revenue Visibility: As of June 20, 2025, SANSERA boasted a robust order book of INR 20,243Mn, with more than 60% originating from international sources, providing significant future revenue visibility. The company added new orders worth INR 1,732Mn in this quarter, primarily driven by the high-growth ADS segment (approx. 25%) but also including xEV, tech agnostic, PV+CV and two-wheeler segments. Notable new wins include a large order from a semiconductor customer, a new US-based tractor manufacturer, orders from existing aerospace and xEV clients, as well as defence orders from an Israeli company.
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SEBI Registration no.: INZ 000160131
