SUNDRMFAST - Fundamental Analysis: Financial Health & Valuation

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

Fundamental Rating: 3.6

📊 Core Financials Overview

Profitability

ROE of 14.7% and ROCE of 17.4% reflect solid capital efficiency.

EPS of ₹24.9 supports a P/E of 42.6, which is significantly higher than the industry average of 29.1—indicating a premium valuation.

PAT grew modestly from ₹125 Cr to ₹138 Cr QoQ, showing stable but slow earnings momentum.

Balance Sheet Health

Debt-to-equity ratio of 0.17 is low, signaling prudent financial management.

Book Value of ₹173 vs Current Price ₹1,044 → P/B ratio ~6.03, which is elevated for a manufacturing firm.

Dividend Yield of 0.69% adds modest income appeal.

Cash Flow & Stability

PEG ratio of 7.40 suggests significant overvaluation relative to earnings growth.

RSI at 60.0 and MACD positive indicate mild bullish momentum, though volume is below average.

📉 Valuation Metrics

Metric Value Insight

P/E Ratio 42.6 Overvalued vs industry PE of 29.1

P/B Ratio ~6.03 Premium pricing

PEG Ratio 7.40 Indicates stretched valuation

Intrinsic Value ~₹810–₹840 Estimated ~20% below current price

According to AlphaSpread’s valuation model, Sundram Fasteners Ltd is currently overvalued by ~18%, with an intrinsic value of ₹813.69.

🏭 Business Model & Competitive Edge

Sector: Sundram Fasteners Ltd manufactures precision components for automotive, infrastructure, windmill, and aviation sectors.

Strengths

Strong export presence across Europe, US, and Asia

Diversified product portfolio and long-standing OEM relationships

Low debt and consistent profitability

Challenges

High valuation multiples

FII holding declined (−1.87%), possibly reflecting cautious sentiment

PEG ratio suggests earnings growth may not justify current pricing

The company maintains a robust operating margin (~48%) and has managed to reduce production costs while improving gross profit

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📌 Entry Zone Recommendation

Suggested Entry Range: ₹850–₹880

Below 200 DMA (₹1,034) and closer to intrinsic value

RSI and MACD suggest waiting for technical confirmation before entry

🧭 Long-Term Holding Guidance

Hold if Already Invested: Strong fundamentals and global reach support long-term stability.

Accumulate on Dips: Especially near ₹850 for better margin of safety.

Watchlist Triggers

EPS acceleration and margin expansion

Institutional accumulation

Strategic diversification into high-growth verticals

Sundram Fasteners is a quality industrial play with strong fundamentals, but its valuation calls for a cautious, price-sensitive approach. You can explore deeper insights on TopStockResearch’s dashboard or StockInvest’s financial summary.

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