⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
SARDAEN - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.6
| Stock Code | SARDAEN | Market Cap | 16,664 Cr. | Current Price | 472 ₹ | High / Low | 640 ₹ |
| Stock P/E | 17.9 | Book Value | 181 ₹ | Dividend Yield | 0.32 % | ROCE | 16.6 % |
| ROE | 12.9 % | Face Value | 1.00 ₹ | DMA 50 | 498 ₹ | DMA 200 | 497 ₹ |
| Chg in FII Hold | -0.60 % | Chg in DII Hold | 0.06 % | PAT Qtr | 240 Cr. | PAT Prev Qtr | 386 Cr. |
| RSI | 42.6 | MACD | -7.43 | Volume | 1,46,936 | Avg Vol 1Wk | 2,53,125 |
| Low price | 397 ₹ | High price | 640 ₹ | PEG Ratio | -5.87 | Debt to equity | 0.23 |
| 52w Index | 31.2 % | Qtr Profit Var | 95.5 % | EPS | 26.4 ₹ | Industry PE | 20.7 |
📊 Core Financials
- Quarterly PAT declined to 240 Cr from 386 Cr, showing earnings pressure despite strong prior growth.
- ROE at 12.9% and ROCE at 16.6% reflect healthy capital efficiency.
- Debt-to-equity ratio at 0.23 indicates low leverage and manageable debt levels.
- EPS at 26.4 ₹ provides a solid earnings base, though recent profit decline is a concern.
💹 Valuation Indicators
- P/E ratio: 17.9, slightly below industry average of 20.7, suggesting fair valuation.
- P/B ratio: ~2.6 (472 ₹ / 181 ₹ book value), moderate premium pricing.
- PEG ratio: -5.87, negative due to inconsistent earnings growth, highlighting valuation risk.
- Intrinsic value appears close to current price, offering limited margin of safety.
🏢 Business Model & Competitive Advantage
- Sarda Energy operates in steel and ferro alloys, with integrated operations providing cost advantages.
- Competitive advantage lies in diversified product mix and efficient manufacturing base.
- Exposure to cyclical steel demand impacts earnings stability.
📈 Entry Zone & Long-Term Guidance
- Entry zone: 450–470 ₹ range (near 200 DMA support at 497 ₹).
- Long-term holding viable for investors seeking exposure to steel and alloys with moderate risk.
- Accumulation should be cautious due to profit volatility and negative PEG ratio.
Positive
- Healthy ROCE (16.6%) and ROE (12.9%).
- Low debt-to-equity ratio (0.23), ensuring financial stability.
- Stock trading at fair valuation compared to industry PE.
Limitation
- Quarterly PAT decline (240 Cr vs 386 Cr).
- Negative PEG ratio (-5.87) indicates poor growth-adjusted valuation.
- Dividend yield at 0.32% is modest.
Company Negative News
- FII holdings decreased (-0.60%), showing reduced foreign investor confidence.
- Stock trading below 50 DMA (498 ₹), reflecting short-term weakness.
Company Positive News
- DII holdings increased slightly (+0.06%).
- Strong historical profit growth (+95.5% YoY variation).
Industry
- Industry PE at 20.7, slightly higher than Sarda Energy’s 17.9, suggesting sector valuations are richer.
- Steel and ferro alloys sector remains cyclical but benefits from infrastructure demand.
Conclusion
- Sarda Energy is financially stable with decent returns and low debt.
- Valuations are fair, but profit volatility and negative PEG ratio limit attractiveness.
- Accumulation near 450–470 ₹ is suitable for long-term investors seeking cyclical exposure with moderate risk.
I can also prepare a peer comparison with Jindal Steel and Tata Steel to highlight how Sarda Energy stacks up in valuation and profitability. Would you like me to draft that next?