Prabhudas Lilladher has upgraded Harsha Engineers International from 'HOLD' to 'Accumulate' rating with a target price of ₹462 in its research report dated August 12, 2026. According to the brokerage's report, the upgrade comes after a recent correction in the stock price, with the target price remaining unchanged from earlier estimates. The stock is currently trading at a P/E ratio of 20.7x/17.8x on FY27/28E earnings.
Harsha Engineers International delivered a robust Q1FY27 performance with consolidated revenue growing 25.2% year-on-year to ₹4.5 billion, driven by strong India Engineering growth and broad-based industrial demand. As reported by Prabhudas Lilladher, management expects India Engineering to grow approximately 15% YoY and consolidated revenue by around 12% YoY in FY27, with sustainable margins of 20-22%. Raw-material inflation and ramp-up costs impacted margins, though passthrough is expected to support recovery. Consolidated Engineering revenue rose 20.7% YoY to ₹4.2 billion, with Engineering India revenue increasing 20.9% YoY to ₹3.1 billion and Solar EPC revenue surging 121% YoY to ₹364 million.
Cages remained a key growth driver, while bushings and stampings demonstrated strong performance with 35% and 31% YoY growth respectively. According to Prabhudas Lilladher's analysis, the company targets 30% growth for FY27 across these segments. Large-size cages offer further growth potential, with management targeting approximately 50% growth. Japanese customer sales grew 25% YoY, though FY27 growth is expected at around 10% due to longer conversion cycles. The company's greenfield capacity expansion supports medium-term growth prospects alongside multiple growth levers including capex by global bearing players in India and growing demand for bronze bushings.
Advantek remains in ramp-up mode, targeting ₹1.4 billion revenue and breakeven by FY27-end. As reported by Prabhudas Lilladhar, China operations remain profitable with approximately 10% growth expected, while Romania continues to impact profitability despite ongoing mix and cost-improvement initiatives. Solar EPC is expected to deliver around ₹2 billion revenue at 7-8% EBITDA margin. The company's greenfield capacity expansion supports medium-term growth prospects alongside multiple growth levers including capex by global bearing players in India and growing demand for bronze bushings.
Prabhudas Lilladher's upgrade is supported by strong demand across cages, bushings, stampings and exports, alongside capacity expansion, which supports medium-term growth prospects. However, the brokerage notes that raw-material volatility, ramp-up costs and overseas losses remain key factors to monitor. The valuation is based on a PE of 20x March 2028E earnings, maintaining consistency with earlier estimates. Despite the momentary revival in Romania, the company's long-term outlook remains positive given its market leadership in bearing cages, greenfield capacity expansion, and multiple growth levers. The stock's current trading at 20.7x/17.8x on FY27/28E earnings reflects the recent correction, presenting an attractive entry point for investors.
