Sandhar Technologies Q2 Results Review

Sandhar Technologies Ltd. printed a strong performance in Q2. Consolidated revenue grew 6.7% QoQ to Rs 8.84 billion, led by strong growth in locking and aluminium die casting  business. Ebitda margin expanded 38 basis points QoQ to 9.2%.

Management expect margin expansion to continue led by ramp up of production from new plants of sheet metal, cost control measures and operating leverage. The management is confident to attain double digit margin in FY25.

Most of joint ventures turned profitable, registering a profit of nine million in H1. TVS Now contributes on 30% of revenue and the company is winning many new business from TVS.

Sandhar Technologies’ margin trajectory is improving well in sheet metal, aluminium die casting  and cabin and fabrication business due to improving utilisation and cost cutting exercise.

As most of the capex has already been done, the company is targeting to reduce debt by more than Rs 2 billion in next two years.

We anticipate a 39% earnings per share compound annual growth rate over FY23-25E and maintain ‘Buy’ rating with target price of Rs 490 (Sept 25E EPS).

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