Emkay Global Financial Reiterates Buy Rating on SPR Auto Technologies, Sets Price Target at Rs 4850

Emkay Global Financial Maintains Buy Rating on SPR Auto Technologies

SPR Auto Technologies reported a strong fourth quarter, with consolidated revenue and EBITDA growth accelerating by approximately 47% and 27% year-over-year to Rs14.6 billion and Rs2.7 billion, respectively. Despite this growth, EBITDAM dipped by approximately 288 basis points year-over-year and 171 basis points quarter-over-quarter to 18.4%.

The company's subsidiaries contributed significantly to this growth, with the consolidated revenue share rising to approximately 34.5% (compared to 15.5% in Q3FY26 and 13.5% in Q4FY25). The EBITDAM of the subsidiaries was approximately 12%, lower than the 17% and 15% seen in Q3FY26 and Q4FY25, respectively, partly due to the Antolin acquisition. The Antolin acquisition contributed revenue and EBITDA of approximately Rs3.3 billion and Rs0.3 billion, respectively, with an EBITDAM of approximately 10%.

The management expressed confidence in sustaining industry-beating growth, driven by capacity additions, technology-led acquisitions, and a diversified product portfolio, with approximately 60% of revenue being powertrain-agnostic across interiors, lighting, precision plastics, and aftermarket. This diversified portfolio is expected to cushion the risk associated with electric vehicles.

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The management has set a target to achieve EBITDA margins of all subsidiaries similar to the EBITDA margin of the SA entity (approximately 21% in FY26) over the next three years. To support this growth, SPR aims to fund organic and inorganic expansion through a proposed Rs10 billion qualified institutional placement (QIP).

The company also plans to invest approximately Rs2 billion over the next two to three years on capital expenditure to support future growth programs, including Takahata's new Neemrana facility, the TGPEL capacity expansion at Noida, and phase-3 expansion at SEL Pithampur plant.

Emkay Global Financial maintains a buy rating on SPR Auto Technologies, with a target price of Rs4,850, based on a price-to-earnings ratio of 25x for FY28E. The company trades at a price-to-earnings ratio of 23x for FY28E. The research firm builds in a FY26-28E revenue, EBITDA, and earnings per share compound annual growth rate (CAGR) of approximately 27%, 24%, and 21%, respectively.

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