"We hosted the chairman of Suprajit Engineering (Suprajit) for a half-day roadshow in Mumbai. The interaction highlighted the company’s strategy regarding more export revenue, optimism concerning its further market share in two-wheelers and plans to diversify into other products. We are optimistic regarding the company and maintain our. Buy, with an upgraded target of `36."

Detailed report has been attached below.

Suprajit Engineering 14 Dec 2012.pdf

"Suprajit Engineering (Suprajit) is poised to benefit from steady demand growth for two wheelers, on account of its sharp product focus, thrust on replacement market and scale up in exports. A leader in two-wheeler control cables, it is likely to post 17% earnings CAGR over FY12-14, aided by strong growth in export and replacement. Growth will be supplemented by good show of its non-auto business, location advantage and capex. We initiate with Buy, at target of `32."

Detailed report has been attached below.

India Auto Components - Advantage replacement and niche plays.pdf

At the CMP of INR25, the stock trades at an EV/EBIDTA of 4x, P/E of 5.4x and P/B of 1.5x, discounting its FY14e earnings. Factors like huge addressable opportunity in each of the segments, benefits of scale, diversifying business model with a global base would enable it to capitalise on its operating leverage. We expect the valuation metrics to align with its historic average even in a muted year for the industry and hence recommend a BUY with a price target of INR33, which represents an upside of 32% from current levels.

Antique PCG Research's initiation report on Suprajit Engineering with a BUY rating