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Check Before You Invest : Synergy Green Industries Ltd

BSE: 541929 NSE: SGIL ISIN: INE00QT01015
  |   Sector:  Automobiles   |   Industry:  Castings/Forgings

Snapshot

Q.1 Which industry/sub-sector does Synergy Green Industries Ltd belong to?
Synergy Green Industries Ltd belongs to the Automobiles sector, operating specifically within the Castings/Forgings segment.
Q.2 Is Synergy Green Industries Ltd a good quality company?
Synergy Green Industries Ltd is a good quality company, based on a consistently good multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Synergy Green Industries Ltd undervalued or overvalued?
Synergy Green Industries Ltd appears Somewhat overvalued, as its key valuation ratios are higher than their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 5-year
Historic Median
Price to Earnings 168.84 51.47
Price to Book 7.08 7.56
Price to Sales 2.15 1.39
EV to EBITDA 20.78 13.16
Q.4 Is Synergy Green Industries Ltd a good buy now?
Synergy Green Industries Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Synergy Green Industries Ltd?
Synergy Green Industries Ltd revenue growth is 11% for FY-2025, which is below its 5-year CAGR of 11.75%, indicating slower growth.

Q.2 Gross Profit margin of Synergy Green Industries Ltd?
Synergy Green Industries Ltd Gross profit margin which is the profit after deduction of direct costs, is 10.5% for FY-2025, which is above its 5-year median of 6.9%, indicating increasing margins.

Q.3 Operating Profit Margin of Synergy Green Industries Ltd?
Synergy Green Industries Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 14.43% for FY-2025, which is above its 5-year median of 12.04% indicating increasing margins.

Q.4 Net Profit Margin of Synergy Green Industries Ltd?
Synergy Green Industries Ltd Net Profit Margin is 4.66% for FY-2025, is above its 5-year median of 1.6%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 10.5 6.9
Operating Profit Margin (%) 14.43 12.04
Net Profit Margin (%) 4.66 1.6

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Synergy Green Industries Ltd?
Synergy Green Industries Ltd Return on Asset is 6.26%, which is above its 5-year historical median of 1.98%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Synergy Green Industries Ltd?
Synergy Green Industries Ltd Return on capital employed is 20.85% for FY-2025, which is above its 5-year historical median of 16.81%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 14%, indicating value creation.

Q.7 Return on Equity (ROE) of Synergy Green Industries Ltd?
Synergy Green Industries Ltd Return on equity is 21.88% for FY-2025, which is above its 5-year historical median of 9.97%, indicating the business is making better use of its shareholders capital.

Q.8 Cash conversion cycle of Synergy Green Industries Ltd?
Synergy Green Industries Ltd Cash conversion cycle is 53 days, above its 5-year historical median of 47 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 1.34 1.54
ROE (%) 21.88 9.97
ROCE (%) 20.85 16.81
Cash Conversion Cycle 53 days 47 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of Synergy Green Industries Ltd?
Synergy Green Industries Ltd Debt-to-Equity ratio is 1.45, which is above the industry average of 0.28, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Synergy Green Industries Ltd?
Synergy Green Industries Ltd Debt to cash flow from operations is -9.51, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Synergy Green Industries Ltd?

Q.1 Promoter shareholding and pledge status of Synergy Green Industries Ltd?
Promoters hold 69.50% of the Synergy Green Industries Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Synergy Green Industries Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Synergy Green Industries Ltd vs industry peers?
Synergy Green Industries Ltd revenue CAGR is 11.75%, compared to the industry median CAGR of 7.17%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 11 7.2
Gross Profit Growth (%) 35.7 22.1
Operating Profit Growth (%) 33.3 17.9
Net Profit Growth (%) 41.7 32
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 1.34 1.2
ROE (%) 21.88 9.78
ROCE (%) 20.85 11.21
Cash Conversion Cycle (days) 52.52 73

Valuation & price assessment

Q.1 Stock return of Synergy Green Industries Ltd over the last decade?
Over the last 5 year(s), the stock has delivered a CAGR of 38.71% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
- 38.7% 53.5% 10.6%
Q.2 Valuation ratios of Synergy Green Industries Ltd vs historical?
The current P/E ratio of 168.84 is higher than its historical median of 51.47, indicating that the stock is trading above its historical average valuation.
Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median
5-year
Industry Median
Price to Earnings 168.84 51.47 21.74
Price to Book 7.08 7.56 2.46
Price to Sales 2.15 1.39 1.52
EV to EBITDA 20.78 13.16 11.88

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