This smallcap auto component co's stock rises 3%; Emkay upgrades to 'Buy'

Suprajit Engineering share price advanced 2.9 per cent in trade on BSE, registering an intraday high at ₹461.9 per share

Suprajit Engineering, auto component, and equipment maker, shares were in demand on Monday, as the stock advanced 2.9 per cent in trade on BSE. It registered an intraday high at ₹461.9 per share. At 12:44 PM, Suprajit Engineering's share price was trading higher by 1.3 per cent at ₹454.4 per share on the BSE. In comparison, the BSE Sensex was down 0.46 per cent at 82,123.68. The company's market capitalisation stood at ₹6,232.6 crore. 

 

The 52-week high of the stock was at ₹639.95 per share and the 52-week low of the stock was at ₹352.05 per share. 

Emkay upgrades Suprajit Engineering to 'Buy'

Domestic brokerage Emkay Global Financial has upgraded its rating to 'Buy' from 'Add' on Suprajit Engineering. The brokerage has fixed the target price at ₹550 per share, implying an upside of around 22 per cent. 

 

 

The brokerage notes that despite a sharp turnaround in performance and global positioning, the company remains attractively valued—with the India business alone justifying the current ₹61,000 crore market capitalisation.

 

“Suprajit’s standalone business trades at ~21x FY26E earnings, compared to ~28x for domestic peers. This offers both valuation comfort and downside protection,” the brokerage said in its latest note. “Crucially, its global operations, which contribute 52 per cent of revenues, are being valued at near-zero despite five years of structural groundwork.” 

 

Global scale built, margins now catching up

Over the past few years, the company has emerged as the second-largest global player in control cables, behind Japan’s Hilex, through strategic acquisitions such as Wescon, Kongsberg LDC, and SCS. These moves have expanded its global reach and positioned it well for market share gains amid industry consolidation.

 

Notably, profitability in the global business is turning around, with H2FY25 margins crossing the double-digit mark despite macroeconomic headwinds. The SCS acquisition—once a stressed asset—is now witnessing customer traction and improved growth, particularly in Morocco. The company expects SCS to turn Earnings before interest, tax, depreciation, and amortisation (Ebitda)-positive by Q4FY26, with a mid-term margin potential of 6–10 percent.

 

Emkay projects a 9 per cent revenue Compound Annual Growth Rate (CAGR) for Suprajet's global division over FY25–28, with margins expanding to 10.9 per cent by FY28 from 5.6 per cent in FY25.

 

Domestic business looks beyond cables

In India, Suprajit commands over 80 per cent market share in control cables for two-wheeler original equipment makers (OEMs) and has posted a 10 per cent revenue CAGR and 11 per cent profit after tax (PAT) CAGR over the last five years. But the company is now evolving “beyond cables”, with aggressive research and development (R&D)-led forays into electronics, brakes, instrument clusters, and actuators.

 

Breakthrough order wins from both traditional and electric vehicle (EV) players—including seat activation chipsets for Jaguar Land Rover and electronic grips for a leading Chinese EV OEM—highlight SEL’s growing relevance in next-gen mobility solutions.

 

The domestic business is expected to maintain double-digit growth, with substantial upside from the brakes segment and faster scale-up of Phoenix Lamps Division (PLD). These optional growth levers are not yet priced into the stock, Motilal Oswal notes.

 

Outlook and valuation

Overall, Emkay Financial projects revenue, Ebitda, and PAT CAGR of 9 per cent, 21 per cent, and 48 per cent respectively over FY25–28, with return on equity (RoE) improving to 19 per cent and near-zero net debt. Though near-term macro concerns have led to 6 per cent cut in FY26/27 earnings estimates, the firm remains bullish on Suprajit’s medium-term prospects.