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ADS-led diversification drives record performance:

SANSERA delivered its highest-ever quarterly performance in Q1FY27, with revenue growing 33% YoY and EBITDA/PAT increasing 48%/39% YoY, supported by strong execution across automotive and non-auto businesses. EBITDA margin expanded 196bps YoY to 19.2%, aided by operating leverage, favourable product mix and higher contribution from ADS. Normalised PAT grew 59% YoY, highlighting strong underlying earnings momentum. The key highlight was the sharp scaling-up of ADS, with revenue more than tripling YoY to INR 1,454 Mn, driven by a strong aerospace and semiconductor demand.

Semiconductor order win materially strengthens growth visibility:

ADS order backlog stood at INR 44.4 Bn at Q1-end, while a subsequent INR 12.5 Bn semiconductor order lifted the five-year executable backlog to ~INR 57.5 Bn. The new order is expected to generate visible revenue from CY27E and peak by CY29E, reinforcing the company’s positioning in high-value precision engineering. Meanwhile, non-auto revenue grew 130% YoY, taking its contribution to 21% of revenue, while xEV and technology-agnostic businesses grew 22% YoY.

Strong medium-term outlook:

The management expects FY27E revenue growth in the high-teens to 20% range and maintained ADS revenue guidance of INR 5,500–6,000 Mn. With planned ADS capacity expansion, increasing aerospace outsourcing, AI-led semiconductor demand and rising OEM outsourcing, we expect the business mix to shift further towards high-value segments. We believe the latest semiconductor win, strong order visibility and improving mix reinforce SANSERA’s transition to a diversified engineering platform, supporting sustained growth and margin expansion

View and Valuation:

We revise our FY27E/28E EPS estimate upwards by 9.5%/9.6%, factoring in strong order inflows and an improved growth outlook. We increase our PE multiple to 42x (earlier: 35x) on FY28E EPS, given the rising contribution from high-growth ADS and semiconductor businesses, stronger order visibility and an improving margin profile. Accordingly, we arrive at a target price of INR 3,880 and maintain our ‘ADD’ rating on the stock.

Q1FY27: Beats our estimate across the Board

* Revenue was up 33.3% YoY and 2.3% QoQ to INR 10,213 Mn (vs CIE est. of INR 9,430 Mn)

* EBITDA was up 48.4% YoY and 1.6% QoQ to INR 1,961 Mn (vs CIE est. of INR 1,631 Mn). EBITDA margin was up 196 bps YoY and down 12 bps QoQ to 19.2% (vs CIE est. of 17.3%)

* APAT was up 66.3% YoY and down 14.8% QoQ to INR 1,035 Mn (vs CIE est. of INR 845 Mn)

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