⚠ 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.
SCHAEFFLER - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.0
| Stock Code | SCHAEFFLER | Market Cap | 56,210 Cr. | Current Price | 3,600 ₹ | High / Low | 4,393 ₹ |
| Stock P/E | 50.3 | Book Value | 352 ₹ | Dividend Yield | 0.78 % | ROCE | 25.7 % |
| ROE | 19.2 % | Face Value | 2.00 ₹ | DMA 50 | 3,795 ₹ | DMA 200 | 3,851 ₹ |
| Chg in FII Hold | -0.01 % | Chg in DII Hold | -0.02 % | PAT Qtr | 307 Cr. | PAT Prev Qtr | 296 Cr. |
| RSI | 36.0 | MACD | -65.9 | Volume | 20,405 | Avg Vol 1Wk | 51,612 |
| Low price | 2,823 ₹ | High price | 4,393 ₹ | PEG Ratio | 3.18 | Debt to equity | 0.01 |
| 52w Index | 49.5 % | Qtr Profit Var | 24.1 % | EPS | 71.5 ₹ | Industry PE | 28.0 |
📊 Core Financials
- Quarterly PAT at 307 Cr vs 296 Cr previously, showing steady earnings growth (+24.1% YoY).
- ROE at 19.2% and ROCE at 25.7% reflect strong capital efficiency and profitability.
- Debt-to-equity ratio at 0.01 indicates a virtually debt-free balance sheet.
- EPS at 71.5 ₹ provides a solid earnings base, backed by consistent performance.
💹 Valuation Indicators
- P/E ratio: 50.3, significantly higher than industry average of 28.0, suggesting overvaluation.
- P/B ratio: ~10.2 (3,600 ₹ / 352 ₹ book value), showing premium pricing.
- PEG ratio: 3.18, indicating valuation is expensive relative to growth.
- Intrinsic value appears lower than current price, limited margin of safety.
🏢 Business Model & Competitive Advantage
- Schaeffler operates in automotive and industrial bearings, precision components, and motion systems.
- Competitive advantage lies in advanced engineering, global presence, and strong OEM partnerships.
- Exposure to EV and industrial automation provides long-term growth opportunities.
📈 Entry Zone & Long-Term Guidance
- Entry zone: 3,300–3,500 ₹ range (near support levels and RSI at 36.0, oversold zone).
- Long-term holding viable for investors seeking exposure to auto and industrial engineering growth.
- Accumulation should be cautious due to stretched valuations despite strong fundamentals.
Positive
- Strong ROCE (25.7%) and ROE (19.2%).
- Debt-free balance sheet (Debt-to-equity 0.01).
- Consistent PAT growth and solid EPS base.
Limitation
- High P/E (50.3) compared to industry average (28.0).
- PEG ratio at 3.18 indicates expensive growth-adjusted valuation.
- Dividend yield at 0.78% is modest.
Company Negative News
- FII holdings decreased slightly (-0.01%) and DII holdings also declined (-0.02%).
- Stock trading below 50 DMA (3,795 ₹) and 200 DMA (3,851 ₹), reflecting bearish trend.
Company Positive News
- Quarterly PAT growth (+24.1% YoY) demonstrates strong operational performance.
- Debt-free operations provide financial resilience.
Industry
- Industry PE at 28.0, much lower than Schaeffler’s 50.3, highlighting sector undervaluation relative to Schaeffler.
- Automotive and industrial engineering sector expected to grow steadily with EV adoption and automation demand.
Conclusion
- Schaeffler is fundamentally strong with high returns and debt-free operations.
- Valuations remain stretched, making accumulation near 3,300–3,500 ₹ more attractive.
- Best suited for long-term investors seeking exposure to auto and industrial engineering growth, but caution advised due to premium valuations.
I can also extend this into a peer comparison with SKF India and Timken India to highlight how Schaeffler stacks up in valuation and profitability. Would you like me to draft that next?