share price declined over 3% on Tuesday, 13 October, giving up some of the previous session’s sharp gains despite the company’s strong September-quarter results. The stock had surged nearly 15% on Monday, outperforming a weak broader market, after the company reported robust growth in revenue, profit and engine sales for Q2FY27.
Centrum Institutional Research has maintained a ‘Buy’ rating on Swaraj Engines, with a target price of ₹4,500 against the current market price of ₹3,621.55, implying an upside potential of around 24%.
According to a regulatory filing, Swaraj Engines’ net profit rose 21.9% year-on-year (YoY) to ₹60.57 crore in Q2FY27, compared with ₹49.68 crore in the corresponding quarter of the previous financial year.
Revenue from operations increased 26% YoY to ₹635.19 crore from ₹504.04 crore in Q2FY26, reflecting sustained demand and higher engine sales.
The company continued to benefit from steady customer demand, selling 61,216 engines in the quarter ended 30 September 2026, up from 51,164 units in the year-ago period.
Operating profit also registered healthy growth, rising 27.1% YoY to ₹86.45 crore from ₹68.03 crore in the corresponding quarter last year.
The growth momentum extended into the first half of FY27. Swaraj Engines reported engine sales of 118,019 units in H1FY27, up 17.8% from 100,204 units in the corresponding period of the previous financial year, underscoring continued demand for its products.
Here’s why Centrum maintains ‘Buy’
Centrum Institutional Research said Swaraj Engines’ Q2FY27 performance exceeded its estimates, primarily driven by better-than-expected volume growth. The company is the sole supplier of engines for Mahindra & Mahindra-owned Swaraj tractors, giving it a strong position in the domestic tractor market.
After delivering 22% year-on-year (YoY) volume growth in FY25, Swaraj Engines sustained its momentum in FY26, recording growth of around 20% and crossing the 200,000-unit annual volume mark. However, following this sharp expansion, Centrum expects the Indian tractor industry to grow at a more moderate compound annual growth rate (CAGR) of 4% over FY26–FY28. New product launches and steady availability of tractor financing are expected to remain key growth drivers.
Despite the company’s strong relationship with Mahindra & Mahindra, debt-free balance sheet and the government’s push towards farm mechanisation, the brokerage remains cautious about the industry’s high base and volume growth in the second half of FY27. Deficient rainfall and El Niño-related risks could weigh on farm sentiment and tractor demand.
Centrum expects Swaraj Engines to deliver an earnings CAGR of around 5% over FY26–FY28. It continues to value the stock at 25 times its estimated FY28 earnings.
Indian tractor industry likely to grow at 4% CAGR over FY26–FY28
Centrum noted that the Indian tractor industry grew at a CAGR of around 5% between FY20 and FY25, followed by a sharp growth of approximately 22% in FY26. The brokerage expects growth to moderate to a CAGR of around 4% over FY26–FY28 as the industry normalises after the strong expansion.
With Mahindra tractors commanding approximately 40% of the market, Centrum expects Swaraj Engines to benefit from its parent company’s strong market position and record a volume CAGR of around 4% during FY26–FY28.
Debt-free balance sheet and strong returns support business model
Centrum highlighted Swaraj Engines’ steady business model, supported by its exclusive engine-supply arrangement for Swaraj tractors, which account for around 17% of India’s annual tractor market of approximately 12 lakh units.
New product launches and stable tractor financing are expected to support growth. The company also maintains a debt-free balance sheet and generates healthy returns, with return on equity (ROE) and return on capital employed (ROCE) of around 38%.
The brokerage expects the company to incur capital expenditure of approximately ₹40 crore over FY26–FY28. While the company’s financial strength and established relationship with Mahindra & Mahindra remain positives, the pace of future growth will depend on tractor demand, rural sentiment and weather conditions.
Swaraj Engines share price today
Swaraj Engines share price today opened at ₹3,730 apiece on the BSE, the stock touched an intraday high of ₹3,862.75 per share, and an intraday low of ₹3,621.55 per share.
Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities, said Swaraj Engines has been consolidating within the ₹3,417–4,394 range since April 2026. On the weekly chart, the stock continues to trade largely between its 50-week and 100-week exponential moving averages (EMAs), indicating a sideways trend. The declining Average Directional Index (ADX) also points to a lack of strong directional momentum.
Shah said the ₹3,400–3,450 zone is likely to act as immediate support, and a decisive break below this range could trigger further weakness. On the upside, the ₹4,400–4,450 zone remains a key resistance area.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.