Suprajit Engineering Q1 Results Review - Non-Automotive Segment To Weigh On Revenue: Nirmal Bang

Nirmal Bang Report

Key Points

• Suprajit Engineering Ltd.’s revenue was 9% lower than our estimate due to a significant decline in non-automotive segment revenue. Ebitda came in 25% lower vs our estimate while Ebitda margin was 250 basis points lower than estimate, impacted by a decline in non-auto segment and restructuring cost related to Trifa in Europe. Profit after tax was 33% lower versus our estimate.

• Slowdown in demand in the non-auto division is expected to continue in the near term. The management expects demand to pick up pace from H2 FY24 while margins are also likely to improve due to completion of restructuring and recovery in demand.

• We have cut our revenue and profit after tax estimates for FY24/FY25 by 6%/9% and 23%/21%, respectively in view of the restructuring cost and slowdown in demand of non-auto segment. We maintain 'Accumulate' on Suprajit Engineering with a target price of Rs 385, valuing it at 23 times June-25E earnings per share.

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