Brokerage firm DAM Capital initiated coverage on Centum Electronics on Wednesday, September 23, with a 'Buy' rating and a target price of ₹6,000 per share. According to reports from CNBC TV18, the coverage was initiated citing the company's strong positioning in core electronics manufacturing and its expanding footprint in high-growth sectors such as defence and semiconductors. The price target implies an upside potential of 22% from the stock's closing levels on Tuesday.
As reported by CNBC TV18, DAM Capital highlighted Centum Electronics' focus on build-to-spec and electronics manufacturing services (BTS / EMS), which it described as the company's core area of competency. The firm noted that Centum had divested its overseas business, taking a write-off of ₹203 crore in the process, as part of efforts to sharpen focus on the domestic market. The brokerage emphasized that the company benefits from high barriers to entry for its products, with around 70% of its business coming from contracts where it was the sole supplier.
According to CNBC TV18, the company has guided for projected revenue growth of 25%-30% annually over the next few years, supported by improving margins. DAM Capital expects the company's earnings before interest, tax, depreciation and amortisation (EBITDA) to grow at a compounded annual growth rate (CAGR) of 37% between FY26 and FY29. On profitability, the brokerage estimated Centum's earnings would grow at a compound annual rate of 38%, while return on capital employed (ROCE) was expected to stay above 20% through FY27-29.
As reported by CNBC TV18, shares of Centum Electronics ended 3.2% higher on Tuesday, at ₹4,892, having hit a 52-week high. The stock has already risen 114% so far this year. At the current price, Centum Electronics shares are trading at 50 times and 35 times their financial year 2028 and 2029 estimated earnings. According to the report, Centum is covered by only three analysts and all three have a 'buy' rating on the stock.
