Hold Swaraj Engines, target price Rs 2075: ICICI Direct

ICICI Direct has hold call on Swaraj Engines with a target price of Rs 2075. The current market price of Swaraj Engines is Rs 1777.9. Time period given by analyst is one year when its price can reach defined target.

Swaraj Engines, incorporated in the year 1985, is a small cap company (having a market cap of Rs 2159.59 crore) operating in engineering sector.

Its key products/revenue segments include engines, spares and others, scrap, engine components for the year ended March 31, 2022.


Financials
For the quarter ended June 30, 2022, the company has reported a standalone total income of Rs 401.33 crore, up 64.05 per cent from last quarter total income of Rs 244.64 crore and up 26.47 per cent from last year same quarter total income of Rs 317.32 crore. Company has reported net profit after tax of Rs 39.54 crore in latest quarter.

The company’s top management includes Mr.Rajesh Jejurikar, Mr.R R Deshpande, Mr.Vijay Varma, Mr.Dileep C Choksi, Mrs.Neera Saggi, Mr.Nikhilesh Natwarlal Panchal, Mr.Nagarajan Sivaramakrishnan, Mr.Giju Kurian. Company has B K Khare & Co. as its auditors. As on June 30, 2022, the company has a total of 1 crore shares outstanding.

Investment Rationale
The stock has largely been flat in a five-year period from ~Rs 2000 in September 2017, underperforming the broader Nifty Auto index.

The brokerage maintains HOLD rating tracking muted growth prospects in tractor space on high base of FY21 and await structural positives before turning positive.

Promoter/FII Holdings
Promoters held 52.13 per cent stake in the company as of Jun 30, 2022, while FIIs owned 1.9 per cent, DIIs 8.91 per cent.