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Check Before You Invest : Sika Interplant Systems Ltd

BSE: 523606 NSE: SIKA ISIN: INE438E01032
  |   Sector:  Capital Goods & Industrial Consumables   |   Industry:  Defence

Snapshot

Q.1 Which industry/sub-sector does Sika Interplant Systems Ltd belong to?
Sika Interplant Systems Ltd belongs to the Capital Goods & Industrial Consumables sector, operating specifically within the Defence segment.
Q.2 Is Sika Interplant Systems Ltd a good quality company?
Sika Interplant Systems 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 Sika Interplant Systems Ltd undervalued or overvalued?
Sika Interplant Systems Ltd appears 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 53.39 41.35
Price to Book 12.49 5.71
Price to Sales 9.23 6.89
EV to EBITDA 38.28 28.69
Q.4 Is Sika Interplant Systems Ltd a good buy now?
Sika Interplant Systems Ltd is not a good buy now, based on weak price trend analysis suggesting prices may fall. 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 Sika Interplant Systems Ltd?
Sika Interplant Systems Ltd revenue growth is 37.3% for FY-2025, which is above its 5-year CAGR of 18.32%, indicating faster growth.

Q.2 Gross Profit margin of Sika Interplant Systems Ltd?
Sika Interplant Systems Ltd Gross profit margin which is the profit after deduction of direct costs, is 24% for FY-2025, which is in line with its 5-year median of 23.5%, indicating stable margins.

Q.3 Operating Profit Margin of Sika Interplant Systems Ltd?
Sika Interplant Systems Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 20.77% for FY-2025, which is above its 5-year median of 19.17% indicating increasing margins.

Q.4 Net Profit Margin of Sika Interplant Systems Ltd?
Sika Interplant Systems Ltd Net Profit Margin is 17.68% for FY-2025, is in line with its 5-year median of 16.93%, indicating stable margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 24 23.5
Operating Profit Margin (%) 20.77 19.17
Net Profit Margin (%) 17.68 16.93

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Sika Interplant Systems Ltd?
Sika Interplant Systems Ltd Return on Asset is 18.82%, which is above its 5-year historical median of 17.45%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Sika Interplant Systems Ltd?
Sika Interplant Systems Ltd Return on capital employed is 29.64% for FY-2025, which is in line with its 5-year historical median of 29.01%. 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 Sika Interplant Systems Ltd?
Sika Interplant Systems Ltd Return on equity is 22.59% for FY-2025, which is above its 5-year historical median of 20.7%, indicating the business is making better use of its shareholders capital.

Q.8 Cash conversion cycle of Sika Interplant Systems Ltd?
Sika Interplant Systems Ltd Cash conversion cycle is 22 days, above its 5-year historical median of 19 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) 1.06 1.06
ROE (%) 22.59 20.7
ROCE (%) 29.64 29.01
Cash Conversion Cycle 22 days 19 days

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

Q.9 Debt to Equity ratio of Sika Interplant Systems Ltd?
Sika Interplant Systems Ltd Debt-to-Equity ratio is 0.00, which is lower the industry average of 0.09, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Sika Interplant Systems Ltd?
Sika Interplant Systems Ltd Debt to cash flow from operations is 0, which is at a healthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Sika Interplant Systems Ltd?

Q.1 Promoter shareholding and pledge status of Sika Interplant Systems Ltd?
Promoters hold 71.72% of the Sika Interplant Systems Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Sika Interplant Systems Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Sika Interplant Systems Ltd vs industry peers?
Sika Interplant Systems Ltd revenue CAGR is 18.32%, compared to the industry median CAGR of 17.94%, indicating stable growth and maintaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 37.3 17.9
Gross Profit Growth (%) 40 30.8
Operating Profit Growth (%) 50 31.2
Net Profit Growth (%) 30 33.2
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 1.06 0.56
ROE (%) 22.59 11.9
ROCE (%) 29.64 14.13
Cash Conversion Cycle (days) 21.56 150

Valuation & price assessment

Q.1 Stock return of Sika Interplant Systems Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 42.9% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
42.9% 70% 105.5% 18.5%
Q.2 Valuation ratios of Sika Interplant Systems Ltd vs historical?
The current P/E ratio of 53.39 is higher than its historical median of 41.35, 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 53.39 41.35 64.82
Price to Book 12.49 5.71 7.10
Price to Sales 9.23 6.89 8.19
EV to EBITDA 38.28 28.69 33.96

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