HSBC’s target price implies a potential upside of 40% from Thursday’s closing level.
The brokerage said Sedemac’s advanced sensor-less motor control technology used in starter systems for two-wheelers and three-wheelers has been the key driver of its strong growth in recent years.
HSBC expects the company’s expansion into electric vehicles (EVs), commercial vehicles and power tools, supported by a broader product portfolio, to sustain its growth momentum.
The brokerage also highlighted Sedemac’s strong research and development capabilities, saying they support a premium valuation.
HSBC estimates the company will deliver revenue CAGR of around 32% between FY26 and FY29, along with EBITDA CAGR of 35% and PAT CAGR of 49% over the same period.
It also expects capital efficiency to improve, forecasting ROCE to rise to around 29% in FY29 from 24% in FY26, while ROIC is projected to increase to 40% from 27%.
HSBC cautioned that the emergence of competing technologies before Sedemac establishes meaningful market share remains a key downside risk, as it could affect both growth prospects and valuation multiples.
All three analysts currently tracking the stock have a ‘Buy’ recommendation.
Sedemac Mechatronics shares ended 0.5% lower at ₹2,645 on Thursday. Despite the day’s decline, the stock has surged more than 80% so far in 2026.
