Hold Harsha Engineers International; target of Rs 408: Prabhudas Lilladher

About this update from Harsha Engineers International Ltd.

Prabhudas Lilladher's research report on Harsha Engineers InternationalHarsha Engineers International (HARSHA) delivered a healthy performance, with revenue rising 21% YoY and EBITDA margin improving 284bps YoY to 15.5%, driven by volume-led growth in the standalone Indian engineering business across industrial and automotive segments, and supported by improving export momentum with gradual recovery in Europe (industrials). The newly operational Advantek facility remains loss-making due to initial capitalization, with profitability expected from FY27, while Romania continues to report losses amid commodity inflation, though management expects improvement on better mix, customer diversification and cost actions. Growth levers across large-size cages, bushings and stampings continue to gain traction with management focus on improving wallet share from existing customers, and the approved ~US$10mn China brownfield expansion for steel cages, targeted to be operational by FY28 and expected to drive ~2x asset turnover.OutlookThe stock is currently trading at a P/E of 20.76x/18.3x on FY27/28E earnings. We maintain our ‘Hold’ rating valuing the stock at a PE of 20x Sep’27E (same as earlier ) arriving at a TP of Rs408 (Rs407 earlier).For all recommendations report, click hereDisclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.Harsha Engineers International - 0602026 - prabhu

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