Sarda Energy gains 5% after HDFC Sec initiates coverage with 'buy' rating

Stock up 14% year-to-date even as Nifty has declined nearly 9%

Shares of Sarda Energy & Minerals gained more than 5 per cent on Monday after domestic brokerage HDFC Securities initiated coverage with a ‘buy’ recommendation.

The stock settled at ₹ 583 on the NSE, up ₹ 28.4, or 5.12 per cent, even as the Nifty 50 index declined nearly a per cent.

 

On a year-to-date basis, Sarda Energy has gained over 14 per cent, outperforming the Nifty, which is down around 9 per cent.

 

HDFC Securities cited the company’s diversified business model, improving operational leverage and favourable demand outlook as key positives.

 

The brokerage has set a ‘base’ and ‘bear’ case target price of ₹ 610 and ₹664, respectively, positioning the stock as an attractive mid-cap industrial pick. The target is based on 10–12 times FY28 estimated EV/Ebitda.

 

 

“Our projections incorporate realistic revenue growth of 11 per cent year-on-year (Y-o-Y) over FY25-28, fuelled by volume accretion and pricing stability, alongside aggressive Ebitda expansion at 20 per cent year-on-year through cost optimisations, operational efficiencies, and economies of scale from brownfield projects. Profit growth is expected to accelerate further to 28 per cent Y-o-Y, supported by deleveraging, tax efficiencies, and higher contribution from value-added products, positioning Sarda Energy to deliver superior returns amid moderating steel prices and improving power utilisation rates,” said the brokerage.

 

Headquartered in Raipur, Chhattisgarh, Sarda Energy is a vertically integrated player with operations across steel manufacturing, ferroalloys, mining and power generation.