Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us  

| More

Sansera Engineering - IPO - Strong Outlook with Steady Cash Flow - Reliance Securities

Posted On: 2021-09-13 12:40:39 (Time Zone: UTC)

About the Company

Sansera Engineering Ltd. (SEL), incorporated Dec'81, is an engineering-led integrated manufacturer of complex and critical precision engineered components across automotive and non-automotive sectors. In automotive sector, it manufactures a wide range of precision-forged and machined components and assemblies, which are critical for engine, transmission, suspension, braking, chassis and other systems for 2-wheelers, passenger vehicles (PVs) and commercial vehicles (CVs). In non-automotive sector, it manufactures a wide range of precision components for aerospace, off-road, agriculture and other segments, including engineering and capital goods. SEL is one of the Top-10 global suppliers of connecting rods within the light vehicle (LV) segment and one of the Top-10 global suppliers of connecting rods within CV segment in CY20. As of July 31, 2021, it has 16 manufacturing facilities (15 in India and 1 facility in Sweden). Within India, its customers include 9 out of Top-10 2-wheeler OEMs and a leading PV OEM (based on the production volume of FY21). Globally, its customers include 6 out of Top-10 global LV OEMs and 3 of Top-10 global M&HCV OEMs (based on the production volume of CY20). Owing to the critical applications of its products and stringent quality requirements, it is difficult for the new players to become qualified or replace precision components supplied by SEL.

Financials in Brief

SEL's financial performance has not been impressive over last two years, owing to slowdown in automobile industry. While revenue clocked a negative CAGR of 2% over FY19-FY21, net profit recorded 6% CAGR during the same period. Profit growth was majorly supported by reduction in debt and steady margin. Further, cash flow generation has been impressive for the company with cumulative OCF and FCF generation standing at Rs7.2bn and Rs1.7bn, respectively over FY19-FY21. Notably, it derived 88.5% and 11.5% of its revenue from automotive and non-automotive sectors, respectively in FY21.


The IPO is valued at 35x of FY21 earnings, which appears to be at a discount of 17% to its peers like Endurance Technologies. Notably, working capital cycle, which stood at 79 days in FY21 and steady cash flow over the years offer comfort. Further, asset turnover ratio at 1.15x in FY21 indicates that SEL can sustain higher growth with likely improvement in automobile volume in the subsequent years. Additionally, OCF yield at 6.7% appears to be the best among peers, which offers an edge, while consistent cash generation is likely to result in strong dividend payout in the ensuing years. Hence, we recommend SUBSCRIBE to the issue from long-term perspective.

Link to the report

Source: Equity Bulls

Click here to send ur comments or to

Disclaimer:The article above is a gist / extract of the original report prepared by the research firm / brokerage firm. This article is not to be considered as an offer to sell or a solicitation to buy any securities. This article is meant for general information only., its employees or owners or the research firms, its employees or owners won't be responsible for any liability that may arise from information, errors or omissions in these articles. or its employees or owners / the research firms or its employees or clients or owners may from time to time hold positions in securities referred in this article. For detailed research reports, please contact the concerned research firm directly.

Other Headlines:

Auto Sector Update - Will EVs impact the 'EV' - Part Deux - HDFC Securities

Automobile Sector - Monthly Quick View - Aug'21 - Mixed Performance across Segments - Reliance Securities

Axis Securities initiating coverage on ICICI Securities

Company Update - Minda Corporation - Q1FY22 - ICICI Direct

Quant Pick - PVR Ltd - ICICI Direct

Quant Pick - ONGC - ICICI Direct

Peak in the headline wholesale inflation is behind us - WPI August 2021 - Acuité Ratings

APL Apollo Tubes - Journey from a semi-commodity player to a branded one - HDFC Securities

Nazara Technologies Ltd - Upbeat in medium-term, Uncertain over Long-term - YES Securities

IPO Review - Sansera Engineering Ltd - ICICI Direct

Overall index is still 0.3% lower than the pre-pandemic levels - IIP July 2021

YES SECURITIES on Monthly General Insurance & Mutual Funds Data

India urban logistics spaces expected to cross 7 million sq. ft by 2022: JLL

Neogen Chemicals - Breaking into the next orbit with a bang - HDFC Securities

Gladiator Stocks - Bharti Airtel Ltd - ICICI Direct

Gladiator Stocks - V-Guard - ICICI Direct

Balkrishna Industries - Industry export growth accelerates - ICICI Securities

HDFC Life Insurance - Exide Life Acquisition - Maintain ADD - YES Securities

Gladiator Stocks - Grindwell Norton - ICICI Direct

Gladiator Stocks - Godrej Properties - ICICI Direct

Monthly Auto Volumes - August 2021 - ICICI Direct

Stock Tales - Easy Trip Planners - ICICI Direct

IPO Review - Vijaya Diagnostic Centre Ltd - ICICI Direct

AU Small Finance Bank - Attrition at top level remains key challenge; business momentum sustained in Jul/Aug'21 - ICICI Securities

Gladiator Stocks - State Bank of India - ICICI Direct

Gladiator Stocks - PNC Infratech - ICICI Direct

Vijaya Diagnostic Centre Ltd - IPO Note - YES Securities

Consumer Durables Sector - Lockdown mars performance yet again - Institutional Research Desk at HDFC Securities

75% of the employees today want to be in office at least once a week as compared to 52% in October 2020: JLL

Gladiator Stocks - Safari Industries - ICICI Direct

Gladiator Stocks - Interglobe Aviation - ICICI Direct

IPO Review - Ami Organics Ltd - ICICI Direct

Q1FY22 GDP - 31st Aug 2021 - Acuité Ratings & Research

Avanti Feeds - Higher input prices hurt margins - ICICI Securities

Company Update - Restructuring - Aarti Industries - ICICI Direct

Q1FY22 Company Update - MM Forgings - ICICI Direct

Company Update - Arvind Fashions - ICICI Direct

Zomato - Can margins and multiples surprise? - ICICI Securities

Ujjivan Small Finance Bank - Top management change and lumpy provisioning concern to weigh on valuation in near term - ICICI Securities

Bharat Dynamics - Guided missile systems to drive orderbook and profit growth - ICICI Securities

Economy - Continued accommodation necessary despite inflationary risks: MPC minutes - ICICI Securities

InterGlobe Aviation - Annual report analysis: Liquidity management remains the mainstay in anticipation of traffic recovery - ICICI Securities

General insurance - Health remains dominant growth driver; Strong all-round performance by Bajaj Allianz - ICICI Securities

Earnings Wrap Q1FY22: Resilient earnings, limited impact of second Covid wave - ICICI Direct

Fine Organic Industries Results Review - In-line performance - HDFC Securities

Power Plus Sector Update - July witnessed strong ~10% generation growth - HDFC Securities

Information Technology Sector Update - 'Hit Refresh' - HDFC Securities

Maintain ADD on JK Cement - Healthy performance - HDFC Securities

Maintain BUY on Star Cement - Margin recovers on pricing gain - HDFC Securities

Maintain BUY on Sadbhav Engineering - Long road to recovery - HDFC Securities

Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2020