Suprajit Engineering nears completion of Stahlschmidt Cable Systems deal, adding €15m in annual revenue

Suprajit Engineering Limited has successfully completed the second tranche of its Stahlschmidt Cable Systems (SCS) acquisition deal, further solidifying its position in the global automotive supply chain. The agreement involves the purchase of assets and liabilities related to SCS China (Stahlschmidt Zhejiang Automotive Co., Ltd.) and SCS Canada (Stahlschmidt Ltd.), expanding Suprajit’s international operations.

This milestone follows the first tranche of the Stahlschmidt Cable Systems acquisition deal, which was completed on July 16, 2024, and is set to be fully executed on April 1, 2025, pending final closing conditions. The latest transaction will integrate €15 million in annual revenue under the same valuation disclosed in June 2024.

Strategic Expansion Across Canada and China

The latest acquisition is being executed through Suprajit USA Inc.’s subsidiaries—Suprajit Canada Limited and Suprajit (Jiaxing) Automotive Systems Company Limited—which will oversee operations in Canada and China, respectively. These regions house key global automotive OEMs and Tier-1 suppliers, making them strategically significant to Suprajit’s global supply network.

Beyond expanding Suprajit’s geographic footprint, the acquisition strengthens its global manufacturing capabilities. The SCS Canada facility is strategically positioned near Detroit, a major automotive hub, while the China plant is located close to Suprajit’s existing operations, enabling improved logistics and cost efficiencies.

Stock Performance and Investor Sentiment

The market has responded with cautious optimism to Suprajit’s expansion. On March 28, 2025, Suprajit Engineering Limited (NSE: SUPRAJIT) closed at ₹376.15, reflecting a 1.06% rise from its recent low of ₹372.20 (January 27, 2025). Over the past year, the stock has seen a 52-week high of ₹639.60 (August 16, 2024), indicating significant volatility.

Suprajit currently trades at a Price-to-Earnings (P/E) ratio of 39.8, higher than the industry average of 30.15, suggesting strong growth expectations. However, its Return on Equity (ROE) of 13.9% over the last three years remains modest compared to competitors.

Despite these valuation concerns, investor sentiment remains largely positive. 86% of analysts recommend a ‘Buy’ or ‘Hold’ position, with only 14% suggesting a ‘Sell’. The company’s consistent dividend payouts—such as its ₹1.25 per share interim dividend declared on February 12, 2025—have further reinforced investor confidence.

Leadership Insights on the Acquisition

Suprajit’s leadership has emphasized the long-term value of the SCS acquisition deal, highlighting its role in advancing the company’s global expansion strategy.

Ajith Rai, Founder and Chairman of Suprajit Engineering Limited, stated that the deal completes the company’s global production footprint and reinforces its China operations. N.S. Mohan, Managing Director and Group CEO, pointed to the synergies between product lines and personnel, positioning SCS as a long-term asset for Suprajit. Akhilesh Rai, Director and Chief Strategy Officer, underscored the logistical advantages of the acquisition, with the Canada plant serving the North American automotive industry and the China facility enhancing regional manufacturing efficiencies. Jim Ryan, President of Suprajit USA, remarked that Stahlschmidt Cable Systems now has a revitalized future following its insolvency, with a stabilized supply chain and strengthened customer confidence.

Investment Considerations

While the SCS acquisition deal positions Suprajit Engineering Limited for global growth, investors should remain mindful of integration risks and the time required to fully capitalize on these synergies. Given the company’s expansion efforts and current market valuation, a ‘Hold’ position may be advisable for existing investors, while new investors should monitor valuation trends for a more favorable entry point.

Financial and Legal Advisory for the Transaction

To facilitate the acquisition, Suprajit Engineering Limited engaged the expertise of Grant Thornton Bharat LLP, India, as its financial advisor. Legal advisory services were provided by Oppenhoff & Partner, Germany, in collaboration with their Canadian and Chinese associates, ensuring regulatory compliance across all jurisdictions involved.

About Suprajit Engineering Limited

As India’s largest manufacturer of automotive cables and halogen bulbs, Suprajit Engineering Limited operates with an annual global capacity of 400 million cables and 110 million halogen bulbs. The company serves a broad base of global automotive majors, with manufacturing facilities, technology centers, and warehouses across four continents.

With this acquisition, Suprajit Engineering Limited is poised to strengthen its global supply chain, enhance its client portfolio, and boost revenue streams, reinforcing its competitive edge in the automotive sector.