Hold Harsha Engineers International; target of Rs 461: Prabhudas Lilladher

About this update from Harsha Engineers International Ltd.

Prabhudas Lilladher's research report on Harsha Engineers InternationalWe revise our FY27-28 EPS estimates by +3.1%/ +6.5% factoring in utilization improvement in Advantek and recovery in export business (ex-Romania). Harsha Engineers International (HARSHA) reported a strong quarter with a 27.1% YoY revenue increase and a sharp 606bps YoY EBITDA margin expansion to 15.5%, primarily driven by operating leverage. Management guided for double-digit consolidated revenue growth in FY27, with India Engineering expected to sustain mid-teen growth led by industrial, automotive and export demand. Export momentum improved meaningfully across Europe and the US, aided by recovery in industrial activity, lower US import tariffs and increasing wallet share gains with existing customers. Advantek continued to scale up well with improving utilisation at the Bhayla facility, while the planned 2- phase expansion is expected to support the next leg of growth. Romania losses narrowed during FY26 vs FY25, with the turnaround strategy focused on higher share of cages and operational efficiencies, although weakness in the European wind market remains a near-term overhang. The China brownfield expansion remains on track for H2FY28 commissioning and is expected to improve localisation, product mix and profitability. Growth drivers across bushings, large-size cages and stampings continue to remain strong, supported by customer additions, wider applications and rising industrial demand, while Solar EPC is expected to sustain robust growth momentum.OutlookThe stock is currently trading at a P/E of 22.2x/19.0x on FY27/28E earnings. We roll forward to Mar’28E and maintain ‘HOLD’ rating with a revised TP of INR461 (INR409earlier), valuing the company at a PE of 20x Mar’28E (20x Sep’27E).Disclaimer: 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 - 0805026 - prabhu

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