Suprajit Engineering Eyes 12-14% Ebitda Margin in FY26
Suprajit Engineering Ltd, a leading automotive component manufacturer, is setting its sights on an Ebitda margin of 12% to 14% in the current financial year (FY26). The company believes it can achieve this ambitious target and maintain it in the next fiscal year (FY27) as well.
Executive Chairperson Ajith Rai shared this vision during a recent conversation with NDTV Profit, highlighting the company’s focus on a de-risking strategy while expanding its product portfolio for future growth.
"We will grow double digit and our Ebitda margins will be 12% to 14%, I mean going forward, without SCS (stahlschmidt cable systems) this year and probably next year, even with the SCS," he said.
The company is banking on its de-risking strategy to achieve this growth, which involves expanding its product portfolio through strategic acquisitions and divestments. Suprajit Engineering’s recent acquisition of SCS, a two-part transaction involving entities in Europe, China, and Canada, is a prime example of this strategy.
"We are adding new products with electronics, the braking and the actuation divisions. If each one of these divisions is not Rs 500 crore in the next five years, it won’t be a great business for us," Rai emphasized.
The company is optimistic about its prospects and expects to be among the top 5% of businesses in the automotive component manufacturing segment.
Suprajit Engineering’s Growth Strategy
Suprajit Engineering’s growth strategy revolves around its de-risking strategy, which involves diversifying its revenue streams through strategic acquisitions and product portfolio expansion. The company believes this approach will help it maintain its Ebitda margin of 12% to 14% in FY27 and beyond.
Rai highlighted the importance of the company’s Morocco facility, which benefits from low US tariffs. India’s potential trade deal with the US is also expected to aid the company in the future.
"Our positioning in terms of ability to deliver for the US, Europe, and China, by being local with local teams, that is our real story," he said.
Challenges and Opportunities
Despite the company’s optimistic outlook, it is not immune to the challenges posed by the global environment. The ongoing west Asia turmoil and the Russia-Ukraine war have created significant headwinds for the automotive industry.
"With some of these acquisitions that we have done, we have been able to give a model that would make doing business with us much easier and less expensive compared to a lot of our competition. That’s our USP in global business," Rai noted.
Suprajit Engineering’s focus on de-risking and product portfolio expansion is expected to help it navigate these challenges and capitalize on opportunities in the future.
