SARDAEN - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Investment Rating: 4.2

📊 Sarda Energy & Minerals Ltd (SARDAEN) — Long-Term Investment Analysis

Sarda Energy is a well-established integrated steel and power producer with strong fundamentals, consistent profitability, and a diversified business model. It’s a solid candidate for long-term investment, especially for investors seeking exposure to the metals and energy sectors.

🔍 Key Financial Metrics

Metric Value Interpretation

P/E Ratio 22.5 Fairly valued vs. industry PE (22.4)

PEG Ratio -4.92 Likely distorted due to cyclical earnings

ROE / ROCE 13.8% / 15.6% Strong capital efficiency

Dividend Yield 0.22% Low, but consistent

Debt-to-Equity 0.46 Healthy leverage

EPS ₹19.9 Solid earnings base

Book Value ₹178 P/B ~2.5 — reasonable for growth stock

Qtr Profit Var +13.4% Positive momentum

📈 Technical & Trend Indicators

Current Price: ₹446

DMA50 / DMA200: ₹446 / ₹435 — bullish alignment

RSI: 52.4 — neutral zone

MACD: 0.08 — mild bullish crossover

Volume: Slightly above average — stable interest

📌 Ideal Entry Price Zone

Accumulation Zone: ₹410–₹430

Near DMA200 and historical support

Offers margin of safety with upside potential toward ₹560+

🧭 If You Already Hold SARDAEN

🕒 Holding Strategy

Time Horizon: 3–5 years

Catalysts

Expansion in coal and hydro power projects

Strong domestic steel demand

Operational efficiency and backward integration

🚪 Exit Strategy

Partial Profit Booking: Near ₹560–₹580 (52W high)

Stop-Loss: ₹395 (below key support)

Re-evaluate: If ROE drops below 10% or debt spikes above 0.8x

🧠 Final Verdict

Sarda Energy is a high-quality mid-cap compounder with strong ROE, healthy debt levels, and consistent earnings. While the PEG ratio appears negative due to cyclical distortions, the underlying fundamentals support a long-term growth story. It’s a buy-on-dips candidate for investors with a multi-year view.

Would you like a peer comparison with JSW Steel or Tata Steel to see how SARDAEN stacks up in the sector?

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