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INVESTMENT INSIGHTS

Check Before You Invest : Sterling Tools Ltd

BSE: 530759 NSE: STERTOOLS ISIN: INE334A01023
  |   Sector:  Automobiles   |   Industry:  Fasteners

Snapshot

Q.1 Which industry/sub-sector does Sterling Tools Ltd belong to?
Sterling Tools Ltd belongs to the Automobiles sector, operating specifically within the Fasteners segment.
Q.2 Is Sterling Tools Ltd a good quality company?
Sterling Tools Ltd is a average quality company, based on a somewhat consistent 10 year financial track record.
Q.3 Is Sterling Tools Ltd undervalued or overvalued?
Sterling Tools Ltd appears Undervalued, as its key valuation ratios are below with their past averages.
Q.4 Is Sterling Tools Ltd a good buy now?
Sterling Tools Ltd is a good buy now, based on strong price trend analysis suggesting prices may rise. However, you need to check its quality and valuation before making a decision

Performance Analysis

Q.1 Revenue growth of Sterling Tools Ltd?
Sterling Tools Ltd revenue growth is 6% for FY-2025 , which is below its 5 year CAGR of 12.1% , indicating slower growth.
Q.2 Gross Profit margin of Sterling Tools Ltd?
Sterling Tools Ltd Gross profit margin which is the profit after deduction of direct costs, is 13.5% for FY-2025 , which is below its 5 year median of 13.7% , indicating decreasing margins.
Q.3 Operating Profit Margin of Sterling Tools Ltd?
Sterling Tools Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 13.75% for FY-2025 , which is below its 5 year median of 14.49% indicating decreasing margins.
Q.4 Net Profit Margin of Sterling Tools Ltd?
Sterling Tools Ltd Net Profit Margin is 6.65% for FY-2025 , is in line with with its 5 year median of 6.65%, indicating stable margins.
Current Level Historic Median
Gross Profit Margin 13.5 13.7
Operating Profit Margin 13.75 14.49
Net Profit Margin 6.65 6.65
Q.5 Return on Asset of Sterling Tools Ltd?
Sterling Tools Ltd Return on Asset is 6.86%, which is above its 5 year historical median of 6.34%, indicating improved asset utilization efficiency.
Q.6 Return on Equity (ROE) of Sterling Tools Ltd?
Sterling Tools Ltd Return on equity is 9.66% for FY-2025 , which is above its historical median of 9.36%, indicating the business is making better use of its shareholders capital.
Q.7 Return on capital employed (ROCE) of Sterling Tools Ltd?
Sterling Tools Ltd Return on capital employed is 11.75% for FY-2025 , which is below its estimated weighted average cost of capital(WACC) 14%, indicating value preservation.
Q.8 Cash conversion cycle of Sterling Tools Ltd?
Sterling Tools Ltd Cash conversion cycle is 81 days, below its historical median of 90 days, indicating improved working capital management. However, you need to compare this with its peers in the industry.
Current Level Historic Median
Asset Turnover 1.05 1.02
ROE 9.66 9.36
ROCE 11.75 11.34
Cash Conversion Cycle 81 days 90 days
Q.9 Debt to Equity ratio of Sterling Tools Ltd?
Sterling Tools Ltd Debt-to-Equity ratio is 0.21 , which is lower with the industry average of 1.96 , indicating lower debt levels in the industry.
Q.10 Debt to cash flow from operations of Sterling Tools Ltd?
Sterling Tools Ltd Debt to cash flow from operations is 1.05 , which is at a healthy level.

Ownership & governance

Q.1 Promoter shareholding and pledge status of Sterling Tools Ltd?
Promoters hold 64.86% of the Sterling Tools Ltd, with 0.05% of their stake pledged, indicating low pledge risk.

Peer comparison (industry-wise, mcap)

Q.1 Revenue growth of Sterling Tools Ltd vs industry peers?
Sterling Tools Ltd revenue CAGR is 12.10% , compared to the industry median CAGR of 9.25% , indicating faster growth and gaining its market share.
Profit Metrics
Current Level Industry Median
Revenue 644.8 2,991.2
Gross Profit 87.1 424
Operating Profit 88 438.7
Net Profit 43 248.5
Operating Efficiency
Current Level Industry Median
Asset Turnover 1.05 1.08
ROE 9.66 4.25
ROCE 11.75 14.07
Cash Conversion Cycle (days) 80.9 162

Valuation & price assessment

Q.1 Stock return of Sterling Tools Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 9.7% based on the current price.
Q.2 What return has the stock given over the last decade?
9Y 5Y 3Y 1Y
Share Price 9.7% 5.6% -17.3% -24.6%
Q.3 Valuation ratios of Sterling Tools Ltd vs historical?
The current P/E is higher that its historical median.
Q.4 How do the current valuation ratios measure up against the historic numbers and the current industry numbers?
Valuation Ratios Current Historic Median Industry Median
Price to Earnings 17.1 0.00 27.78
Price to Book 1.73 2.10 2.65
Price to Sales 1.31 2.25 1.24
EV to EBITDA 8.7 15.78 13.88

Check more companies

1. Sundram Fasteners
2. Sterling Tools
3. Simmonds Marshall
4. Lakshmi Prec. Screws
5. Agarwal Bolts
6. Globe Exim
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