Add Suprajit Engineering Ltd for the Target Rs. 525 by Choice Institutional Equities
Key Conference Call Highlights
Financial Performance & Segment Performance:
* Q4FY26 performance remained strong, with consolidated revenue (including SCS) rising 18.8% YoY to INR 10.4 Bn, marking the company’s highest-ever quarterly revenue. Consolidated PBT nearly doubled, increasing 93.7% YoY to INR 972 Mn, supported by a sharp improvement in profitability across global operations and successful turnaround of SCS
* The Global Cables & Mechatronics (GCM, erstwhile SCD) division delivered a strong recovery, with FY26 revenue increasing 10.5% YoY and EBITDA surging 25.0% YoY. EBITDA margin improved to 11.0%, aided by restructuring benefits and operational efficiencies. Q4FY26 revenue growth stood at 15.0% YoY
* India Cables & Mechatronics (ICM, erstwhile DCD) reported FY26 revenue growth of 9.2% YoY, while Q4FY26 revenue increased 9.4% YoY despite customer-linked price reductions. EBITDA margin remained healthy at 16.2%, supported by strong aftermarket demand and growing contribution from “Beyond Cable” products
* Phoenix Lighting & Electricals (PLE) witnessed subdued performance, with FY26 revenue declining 3.1% YoY and EBITDA falling 18.1% YoY due to weak aftermarket demand and lower exports to the Middle East amid geopolitical disruptions
Electronics Growth, Technology Initiatives & Product Diversification:
* Sensors, Electronics & Displays (SED) remained the fastest-growing business segment, with FY26 revenue increasing 21.2% YoY and Q4FY26 revenue rising 30.3% YoY. EBITDA grew 76.6% YoY during FY26, while EBITDA margin improved sharply to 10.6%, driven by strong demand for digital clusters, electronic throttle controls, sensors and throttle grips
* The Suprajit Technology Center (STC) continues to drive the company’s “Beyond Cable” strategy through development of braking systems, actuators, sensors, digital clusters and electro-mechanical systems. During the quarter, the company signed a technical collaboration agreement with a global brakesystem supplier for two-wheeler brake calipers, while ABS development with Blubrake progressed satisfactorily. STC currently employs over 150 R&D engineers and has filed 43 patents, of which 14 have already been granted. The new STC facility in Bengaluru is expected to be completed by Q3FY27E.
SCS Turnaround, Capacity Expansion & Outlook:
* The turnaround of Stahlschmidt Cable Systems (SCS) was the key highlight of FY26. Following extensive restructuring across Germany, Morocco, Hungary and other global operations, SCS turned EBITDA-positive in Q4FY26 with a margin of 2.1%, compared to negative margins reported in earlier quarters
* Looking ahead, management guided for double-digit consolidated revenue growth in FY27E with EBITDA margin in the range of 12.0–13.5%. GCM margins are expected to improve sharply to 10–12% from ~6% last year, supported by SCS integration benefits and strong order wins
* FY27E capex is guided at ~INR 2.0 Bn, which includes land acquisition at Auric Maharashtra, completion of the STC facility, Chennai Plant-2 expansion, SED capacity enhancement and infrastructure augmentation across divisions. The board also recommended a final dividend of INR 2/share, taking total FY26 dividend to INR 3.5/share versus INR 3/share in FY25
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SEBI Registration no.: INZ 000160131
