SUNDRMFAST - Investment Analysis

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

Investment Rating: 3.7

📊 Fundamental & Valuation Analysis

Sundram Fasteners Ltd shows solid fundamentals but is currently overvalued based on several key metrics

P/E Ratio: 39.2 vs Industry PE of 31.2 — indicates overvaluation

PEG Ratio: 6.65 — very high, suggesting poor value for growth

Price to Book: ~5.5 — expensive compared to book value

ROE / ROCE: 14.9% / 17.1% — decent but not exceptional

Dividend Yield: 0.72% — low, not attractive for income investors

Debt to Equity: 0.22 — healthy and conservative

Despite strong profitability and low debt, the valuation metrics suggest the stock is priced for perfection, leaving little margin for error.

📉 Technical & Trend Analysis

Current Price: ₹1,005

DMA 50 / DMA 200: ₹1,006 / ₹1,049 — trading below long-term average

RSI: 47 — neutral zone, not oversold

MACD: -0.54 — bearish crossover

Volume: Below 1-week average — waning interest

The stock has corrected ~33% from its 52-week high of ₹1,498, indicating a potential value zone but not yet a confirmed reversal.

✅ Ideal Entry Price Zone

Based on valuation and technical indicators, the ideal entry zone would be

₹880–₹940 range

This aligns with support near the 52-week low and offers better risk-reward

Wait for RSI to dip below 40 and MACD to flatten or turn positive for confirmation

📈 Long-Term Holding Strategy

If you already hold the stock

Holding Period: 3–5 years minimum, given consistent revenue and profit growth

Exit Strategy

Partial exit near ₹1,400–₹1,500 if valuation stretches again

Full exit if ROE/ROCE deteriorates or PEG remains above 5 for multiple quarters

Reassess if quarterly PAT continues to decline (currently down 6.83%)

🔍 Summary

Metric Value Verdict

ROE / ROCE 14.9% / 17.1% Solid

PEG Ratio 6.65 Overvalued

Dividend Yield 0.72% Low

Debt to Equity 0.22 Healthy

RSI / MACD 47 / -0.54 Neutral / Bearish

PAT Trend -6.83% QoQ Weakening

Sundram Fasteners is a quality business, but not a value buy at current levels. A patient investor should wait for a better entry point or hold with a long-term view if already invested.

Would you like a comparison with similar auto component stocks like Motherson or Bosch?

Edit in a page