SUNDRMFAST - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 3.6
| Stock Code | SUNDRMFAST | Market Cap | 19,986 Cr. | Current Price | 950 ₹ | High / Low | 1,080 ₹ |
| Stock P/E | 37.5 | Book Value | 183 ₹ | Dividend Yield | 0.76 % | ROCE | 17.4 % |
| ROE | 14.7 % | Face Value | 1.00 ₹ | DMA 50 | 941 ₹ | 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 | 53.8 | MACD | 2.46 | Volume | 4,99,660 | Avg Vol 1Wk | 1,50,552 |
| Low price | 831 ₹ | High price | 1,080 ₹ | PEG Ratio | 6.51 | Debt to equity | 0.14 |
| 52w Index | 47.7 % | Qtr Profit Var | 8.11 % | EPS | 25.4 ₹ | Industry PE | 28.7 |
📊 Analysis: SUNDRMFAST shows decent fundamentals with ROE at 14.7% and ROCE at 17.4%, indicating efficient capital use. The P/E of 37.5 is higher than the industry average of 28.7, suggesting overvaluation. The PEG ratio of 6.51 highlights expensive growth prospects. Dividend yield of 0.76% is modest, offering limited passive returns. Technical support lies around 940–980 ₹ (DMA 50 & 200), with resistance near 1,050–1,080 ₹. The ideal entry zone is 880–930 ₹ for margin of safety. For existing holders, a medium-to-long horizon is viable, but partial profit booking near 1,050–1,080 ₹ resistance is advisable unless earnings growth accelerates.
✅ Positive
- Strong ROCE (17.4%) and ROE (14.7%) support efficient capital allocation.
- Low debt-to-equity ratio (0.14) ensures financial stability.
- DII holdings increased by 0.55%, showing domestic investor confidence.
- Quarterly PAT growth of 8.11% indicates operational improvement.
- EPS of 25.4 ₹ provides valuation support.
⚠️ Limitation
- High P/E (37.5) compared to industry average (28.7).
- PEG ratio of 6.51 highlights expensive growth valuation.
- Dividend yield of 0.76% is modest.
- FII holdings decreased by -0.54%, showing reduced foreign confidence.
📉 Company Negative News
- Sequential decline in quarterly PAT (130 Cr. vs 140 Cr.).
- Stock trading at only 47.7% of 52-week index range, reflecting weak momentum.
📈 Company Positive News
- Quarterly profit variation (+8.11%) shows earnings recovery.
- Strong fundamentals with double-digit ROE and ROCE.
- Domestic institutional investors increasing stake.
🏭 Industry
- Auto components sector benefits from rising vehicle demand and exports.
- Industry P/E at 28.7 suggests SUNDRMFAST trades at a premium.
- Structural drivers: EV adoption, global supply chain diversification, and OEM demand.
🔎 Conclusion
SUNDRMFAST earns a rating of 3.6 due to strong ROE/ROCE but expensive valuations and modest dividend yield. Long-term investors should consider entry in the 880–930 ₹ zone for margin of safety. Current holders may adopt a medium-to-long horizon, with partial profit booking near 1,050–1,080 ₹ resistance unless profitability improves. The stock remains a stable auto component play but requires caution due to valuation risks.