SCHAEFFLER - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 4.1

📊 Core Financials Overview

Profitability

ROE of 19.2% and ROCE of 25.7% signal excellent capital efficiency.

EPS of ₹67.7 is robust, backed by consistent PAT growth (₹296 Cr vs ₹265 Cr).

Profit variation of 16.8% QoQ shows healthy momentum with operational stability.

Balance Sheet Strength

Debt-to-equity ratio of 0.01 reflects near-zero leverage — a major strength.

Dividend yield of 0.68% adds modest income potential.

Cash Flow & Stability

Book Value of ₹352 vs Current Price ₹4,138 implies a high P/B ratio (~11.76) — premium valuation.

PEG ratio of 3.87 suggests overvaluation relative to earnings growth.

📉 Valuation Metrics

Metric Value Insight

P/E Ratio 61.2 Overvalued vs industry PE of 29.1

P/B Ratio ~11.76 Premium pricing

PEG Ratio 3.87 Indicates stretched valuation

Intrinsic Value ~₹2,442 Overvalued by ~39%

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Despite strong fundamentals, the stock is significantly overvalued based on intrinsic valuation models

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⚙️ Business Model & Competitive Edge

Sector: Schaeffler India Ltd is a leading manufacturer of precision automotive and industrial components — bearings, transmission systems, and mechatronics.

Strengths

Global parentage (Schaeffler Group) with access to advanced tech and R&D

Strong solvency score of 97/100 and profitability score of 57/100

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Near-zero debt and consistent earnings growth

Challenges

High valuation multiples

Limited upside unless earnings accelerate

RSI at 65.8 suggests nearing overbought territory

📌 Entry Zone Recommendation

Suggested Entry Range: ₹3,500–₹3,700

Below 50 DMA (₹3,974) and closer to intrinsic value

MACD positive, but RSI nearing overbought zone

Volume stable, indicating consolidation

🧭 Long-Term Holding Guidance

Hold if Already Invested: Strong fundamentals and global backing support long-term growth.

Wait for Better Entry if New Investor: Valuation is stretched; a dip would offer better risk-reward.

Watchlist Triggers

EPS acceleration

Margin expansion

Institutional accumulation

Schaeffler India is a high-quality industrial play with excellent financial health, but current pricing demands patience. You can explore more on AlphaSpread’s valuation dashboard

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or TopStockResearch’s fundamentals

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www.alphaspread.com

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www.topstockresearch.com

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