Shares of Sansera Engineering Ltd. saw a significant rise of over 5% on Monday, closing at Rs 4655, following the announcement of its Q2 FY27 earnings. The surge comes as leading brokerages Nomura and Goldman Sachs reiterated their bullish stance on the company, primarily driven by exceptional growth in its Aerospace, Defence, and Semiconductor (ADS) business.
The company's market capitalization expanded to Rs 29,055 crore as investors reacted positively to the Q2 performance and optimistic future outlooks from analysts.
Brokerages Maintain Bullish Outlook
Both Nomura and Goldman Sachs highlighted Sansera Engineering's increasing exposure to high-margin precision engineering segments as a critical driver for earnings growth and margin expansion. This strategic diversification, particularly within the ADS sector, is seen as a key factor solidifying their positive recommendations.
Nomura's Perspective
Nomura reported that Sansera Engineering's Q2 FY27 performance surpassed operating-level expectations. The brokerage noted that EBITDA margins benefited from a favorable product mix and reduced raw material costs. Consequently, Nomura raised its target price for Sansera Engineering to Rs 4,916 from Rs 4,278, maintaining its 'Buy' rating. The firm projects a robust 33% EPS CAGR over FY26-FY29, with potential for sustained earnings growth above 20% beyond FY29, making the current valuation of approximately 34 times FY29 estimated earnings attractive.
Goldman Sachs' Analysis
Goldman Sachs also upheld its positive view, describing Sansera Engineering's Q2 FY27 performance as broadly aligned with expectations. The ADS segment emerged as a significant growth engine, contributing 15% of Sansera's total revenue in Q2 FY27, a substantial increase from just 4% in the same quarter last year. ADS revenue surged by an impressive 206% year-on-year and grew 11% sequentially, exceeding Goldman Sachs' estimates by 38%. The segment's order book stands strong at Rs 5,870 crore, with execution anticipated over the next five years.
Sansera's management has guided for an overall FY27 revenue of Rs 4,250-4,300 crore, indicating approximately 23% year-on-year growth. Goldman Sachs identified the onboarding of a second semiconductor customer in Q3 FY27 and opportunities in aerospace engine components, including the expected validation of critical components like blisks in the December quarter, as vital triggers for future growth. Successful validation could pave the way for commercial awards in subsequent engine programs.
Goldman Sachs increased its 12-month target price to Rs 5,350 from Rs 5,260, reaffirming its 'Buy' recommendation. The collective outlook from both brokerages underscores the strategic importance of Sansera Engineering's expansion into aerospace, defence, and semiconductor components, which is poised to enhance its business mix and operating margins.