Sansera Engineering shares rise 7%; Goldman Sachs raises target; sees further upside

Sansera Engineering Ltd shares rose 7% on Tuesday after Goldman Sachs retained its 'Buy' rating on the auto component maker and raised its target price to Rs 4,990 from Rs 4,500. Based on the prevailing price of Rs 4,598.45, the revised target implies an upside of around 8.5%.

Goldman Sachs said recent investment announcements by global semiconductor capital equipment makers Applied Materials and LAM Research could support the development of local supplier ecosystems in India and expand research and development activity. The brokerage sees these developments as potential long-term growth contributors for Sansera's higher-margin aerospace, defence and semiconductor (ADS) component supply business.

Sansera Engineering shares rose 7.06% to Rs 4,598.45 on Tuesday, compared with the previous close of Rs 4,295.10. The stock opened at Rs 4,519.90 and touched a high of Rs 4,630, while its low stood at Rs 4,400.

Applied Materials has announced plans to invest $5 billion in India, while LAM Research has announced a $1.2 billion investment, according to Goldman Sachs. The brokerage said the investments are aimed at developing local supplier ecosystems and expanding the companies' R&D presence in India.

Goldman Sachs also highlighted Sansera's $180 million semiconductor order from an existing customer, announced in August. The brokerage said this order, along with the potential expansion of semiconductor manufacturing and equipment activity in India, could provide further opportunities for Sansera's ADS business.

The brokerage has raised its FY29 earnings-per-share estimate to partially factor in the potential upside from these developments. Goldman Sachs expects the ADS business to remain an important contributor to Sansera's longer-term growth, particularly given the higher-margin nature of the segment.

Commenting on the opportunity, Goldman Sachs said the investments announced by Applied Materials and LAM Research could be "potential longer term growth contributors to Sansera's higher margin ADS component supply."

The brokerage's forecasts show Sansera's revenue rising from Rs 34,979.2 crore in FY26 to Rs 60,968.2 crore in FY29E, while Ebitda is projected to increase from Rs 6,320.9 crore to Rs 13,507.5 crore over the same period.