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Check Before You Invest : Stratmont Industries Ltd

BSE: 530495 NSE: ISIN: INE473C01025
  |   Sector:  Miscellaneous   |   Industry:  Trading

Snapshot

Q.1 Which industry/sub-sector does Stratmont Industries Ltd belong to?
Stratmont Industries Ltd belongs to the Miscellaneous sector, operating specifically within the Trading segment.
Q.2 Is Stratmont Industries Ltd a good quality company?
Stratmont Industries Ltd is a weak quality company, based on a inconsistent 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 Stratmont Industries Ltd undervalued or overvalued?
Stratmont Industries Ltd appears Fair, as its key valuation ratios are in line with 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 62.25 25.38
Price to Book 5.3 4.86
Price to Sales 1.12 0.40
EV to EBITDA 29.69 25.15
Q.4 Is Stratmont Industries Ltd a good buy now?
Stratmont Industries 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 Stratmont Industries Ltd?
Stratmont Industries Ltd revenue growth is 6.3% for FY-2025, which is below its 5-year CAGR of 191.56%, indicating slower growth.

Q.2 Gross Profit margin of Stratmont Industries Ltd?
Stratmont Industries Ltd Gross profit margin which is the profit after deduction of direct costs, is 2.2% for FY-2025, which is in line with its 5-year median of 2.2%, indicating stable margins.

Q.3 Operating Profit Margin of Stratmont Industries Ltd?
Stratmont Industries Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 4.52% for FY-2025, which is above its 5-year median of 2.33% indicating increasing margins.

Q.4 Net Profit Margin of Stratmont Industries Ltd?
Stratmont Industries Ltd Net Profit Margin is 1.12% for FY-2025, is below its 5-year median of 1.4%, indicating decreasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 2.2 2.2
Operating Profit Margin (%) 4.52 2.33
Net Profit Margin (%) 1.12 1.4

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Stratmont Industries Ltd?
Stratmont Industries Ltd Return on Asset is 1.77%, which is in line with its 5-year historical median of 1.77%, indicating stable asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Stratmont Industries Ltd?
Stratmont Industries Ltd Return on capital employed is 6.1% for FY-2025, which is below its 5-year historical median of 7.16%. The current ROCE is below its estimated weighted average cost of capital (WACC) of 14%, indicating value preservation.

Q.7 Return on Equity (ROE) of Stratmont Industries Ltd?
Stratmont Industries Ltd Return on equity is 6.2% for FY-2025, which is below its 5-year historical median of 22.87%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of Stratmont Industries Ltd?
Stratmont Industries Ltd Cash conversion cycle is 94 days, above its 5-year historical median of 34 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) 1.59 1.94
ROE (%) 6.2 22.87
ROCE (%) 6.1 7.16
Cash Conversion Cycle 94 days 34 days

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

Q.9 Debt to Equity ratio of Stratmont Industries Ltd?
Stratmont Industries Ltd Debt-to-Equity ratio is 0.54, which is above the industry average of 0.03, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Stratmont Industries Ltd?
Stratmont Industries Ltd Debt to cash flow from operations is -0.68, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Stratmont Industries Ltd?

Q.1 Promoter shareholding and pledge status of Stratmont Industries Ltd?
Promoters hold 67.58% of the Stratmont Industries Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

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

Q.1 Revenue growth of Stratmont Industries Ltd vs industry peers?
Stratmont Industries Ltd revenue CAGR is 191.56%, compared to the industry median CAGR of 0%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 6.3 -
Gross Profit Growth (%) - 17.9
Operating Profit Growth (%) 50 16.4
Net Profit Growth (%) - 17.3
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 1.59 0.52
ROE (%) 6.2 2.05
ROCE (%) 6.1 3.6
Cash Conversion Cycle (days) 93.77 46

Valuation & price assessment

Q.1 Stock return of Stratmont Industries Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 30.2% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
30.2% 25% 42.6% -18.8%
Q.2 Valuation ratios of Stratmont Industries Ltd vs historical?
The current P/E ratio of 62.25 is higher than its historical median of 25.38, 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 62.25 25.38 33.62
Price to Book 5.3 4.86 1.57
Price to Sales 1.12 0.40 2.21
EV to EBITDA 29.69 25.15 14.09

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