Motilal Oswal has initiated coverage on Shaily Engineering Plastics with a 'Buy' rating and target price of ₹3,404, implying nearly 26% upside from current levels. According to the brokerage report, the company is no longer just a traditional plastic components manufacturer but is gradually positioning itself as a specialised high-precision engineering and healthcare solutions player with exposure to some of the fastest-growing segments globally. The company has been operating for nearly four decades and manufactures precision plastic products across healthcare, consumer goods, personal care, appliances, automotive and lighting segments, supplying components to several global companies including IKEA, Unilever, Procter & Gamble, Gillette and General Electric.
The biggest transformation is happening inside the company's healthcare division, where Shaily is now among a limited number of global companies specialising in complex injection delivery devices such as insulin pens and GLP-1 pens used for diabetes and obesity treatment. As reported by Motilal Oswal, the company is among select global players specialising in complex products such as IP-led insulin and GLP-1 pens. A major trigger for the company is the expiry of semaglutide patents in several emerging markets during March 2026. Semaglutide is a key ingredient used in blockbuster diabetes and weight-loss drugs globally, and following patent expiry in markets like India, Brazil and Canada, generic pharmaceutical companies are expected to launch lower-cost versions, creating opportunities for specialised injection delivery devices.
According to Motilal Oswal's projections, healthcare segment revenue could reach nearly ₹880 crore by FY28, growing at almost 50% Compound Annual Growth Rate (CAGR) between FY26 and FY28. The healthcare segment is expected to contribute more than 50% of the company's overall revenue by FY28 compared to nearly 10% earlier. The brokerage noted that this high-margin segment revenue is expected to be ₹880 crore by FY28E at 50% CAGR. The company plans to invest more than ₹600 crore for this expansion, with Motilal Oswal stating that in most GLP-1 engagements, SHEP has been selected as the sole device supplier.
Shaily Engineering Plastics has reported strong financial growth during FY26, with the company recording 26% year-on-year revenue growth, while Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) and Profit After Tax (PAT) rose 59% and 82% respectively. EBITDA margin also expanded sharply to 28.2% during FY26 from 22.4% in the previous year. Motilal Oswal expects this momentum to continue over the next two years, supported mainly by healthcare volumes and improving operating leverage. The company is also planning a ₹500 crore fundraising exercise, which may support future expansion opportunities.
Apart from healthcare, the company is exploring opportunities in consumer electronics and semiconductor component manufacturing, with Motilal Oswal noting that consumer electronics and semiconductors are optionality plays. The brokerage believes Shaily's expertise in niche and complex plastic engineering products could help it enter specialised component supply chains linked to electronics manufacturing. However, Motilal Oswal cautioned that valuations have already risen significantly, stating that any large miss could lead to a de-rating in the scrip's valuation. The analysis is based on a brokerage report by Motilal Oswal and should be viewed for informational purposes only, with investors advised to conduct independent research before making investment decisions.
