SUNDRMFAST - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.9
| Stock Code | SUNDRMFAST | Market Cap | 19,429 Cr. | Current Price | 932 ₹ | High / Low | 1,080 ₹ |
| Stock P/E | 36.4 | Book Value | 183 ₹ | Dividend Yield | 0.77 % | ROCE | 17.4 % |
| ROE | 14.7 % | Face Value | 1.00 ₹ | DMA 50 | 939 ₹ | DMA 200 | 984 ₹ |
| Chg in FII Hold | -0.54 % | Chg in DII Hold | 0.55 % | PAT Qtr | 130 Cr. | PAT Prev Qtr | 140 Cr. |
| RSI | 50.6 | MACD | -4.60 | Volume | 31,546 | Avg Vol 1Wk | 54,538 |
| Low price | 831 ₹ | High price | 1,080 ₹ | PEG Ratio | 6.32 | Debt to equity | 0.14 |
| 52w Index | 40.4 % | Qtr Profit Var | 8.11 % | EPS | 25.4 ₹ | Industry PE | 28.0 |
💰 Financials: Sundram Fasteners (SUNDRMFAST) shows healthy fundamentals with ROE at 14.7% and ROCE at 17.4%, reflecting efficient capital usage. Debt-to-equity ratio of 0.14 highlights a conservative balance sheet with minimal leverage. Quarterly PAT declined slightly from ₹140 Cr. to ₹130 Cr., though year-on-year profit variation (+8.11%) indicates growth momentum. Cash flows remain stable, supported by strong demand in automotive and industrial components.
📊 Valuation: Current P/E of 36.4 is significantly above the industry average of 28.0, suggesting premium valuation. P/B ratio (~5.1) is high relative to book value of ₹183, indicating expensive pricing. PEG ratio of 6.32 signals overvaluation compared to growth prospects. Intrinsic value analysis suggests the stock is trading above fair value, requiring caution for new entries.
🏭 Business Model & Competitive Advantage: Sundram Fasteners is a leading manufacturer of automotive fasteners, industrial components, and engineering solutions. Its competitive advantage lies in strong OEM relationships, global presence, and diversified product portfolio. The company benefits from India’s automotive growth and export demand, though margins remain sensitive to raw material costs and global cycles.
📈 Entry Zone: Considering DMA 50 (₹939) and DMA 200 (₹984), accumulation is attractive in the ₹880–₹910 range. Long-term investors can hold for steady compounding returns, supported by strong fundamentals and sector growth.
Positive
- Strong ROCE (17.4%) and ROE (14.7%) indicate efficient operations.
- Low debt-to-equity ratio (0.14) ensures financial stability.
- Year-on-year profit growth (+8.11%).
- Strong OEM relationships and global presence.
Limitation
- High P/E (36.4) compared to industry average (28.0).
- P/B ratio (~5.1) suggests expensive valuation.
- PEG ratio of 6.32 signals overvaluation relative to growth.
- Quarterly PAT decline from ₹140 Cr. to ₹130 Cr.
Company Negative News
- Decline in FII holdings (-0.54%).
- Sequential profit decline raises short-term concerns.
Company Positive News
- Increase in DII holdings (+0.55%), signaling domestic institutional confidence.
- Stable demand outlook supported by automotive sector growth.
Industry
- Auto component industry P/E at 28.0 indicates Sundram Fasteners trades at a premium.
- Sector growth driven by rising automotive demand and exports.
- Raw material cost volatility remains a key risk factor.
Conclusion
🔑 Sundram Fasteners is a fundamentally strong company with efficient returns, low debt, and strong OEM relationships. However, stretched valuations and modest profit decline limit near-term attractiveness. Entry around ₹880–₹910 offers a favorable risk-reward balance. Long-term holding is justified for investors seeking exposure to India’s automotive and industrial growth story.
I can also prepare a comparative HTML snapshot against peers like Motherson Sumi and Bharat Forge to highlight Sundram Fasteners’ relative valuation and efficiency.