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Check Before You Invest : Wendt (India) Ltd

BSE: 505412 NSE: WENDT ISIN: INE274C01019
  |   Sector:  Capital Goods & Industrial Consumables   |   Industry:  Abrasives

Snapshot

Q.1 Which industry/sub-sector does Wendt (India) Ltd belong to?
Wendt (India) Ltd belongs to the Capital Goods & Industrial Consumables sector, operating specifically within the Abrasives segment.
Q.2 Is Wendt (India) Ltd a good quality company?
Wendt (India) 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 Wendt (India) Ltd undervalued or overvalued?
Wendt (India) 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 60.27 53.17
Price to Book 5.86 10.22
Price to Sales 6.64 9.35
EV to EBITDA 30.5 32.79
Q.4 Is Wendt (India) Ltd a good buy now?
Wendt (India) 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 Wendt (India) Ltd?
Wendt (India) Ltd revenue growth is 3% for FY-2025, which is below its 5-year CAGR of 11.75%, indicating slower growth.

Q.2 Gross Profit margin of Wendt (India) Ltd?
Wendt (India) Ltd Gross profit margin which is the profit after deduction of direct costs, is 27.7% for FY-2025, which is in line with its 5-year median of 27.7%, indicating stable margins.

Q.3 Operating Profit Margin of Wendt (India) Ltd?
Wendt (India) Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 24.02% for FY-2025, which is in line with its 5-year median of 24.11% indicating stable margins.

Q.4 Net Profit Margin of Wendt (India) Ltd?
Wendt (India) Ltd Net Profit Margin is 17.82% for FY-2025, is in line with its 5-year median of 17.82%, indicating stable margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 27.7 27.7
Operating Profit Margin (%) 24.02 24.11
Net Profit Margin (%) 17.82 17.82

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Wendt (India) Ltd?
Wendt (India) Ltd Return on Asset is 15.07%, which is in line with its 5-year historical median of 15.59%, indicating stable asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Wendt (India) Ltd?
Wendt (India) Ltd Return on capital employed is 24.33% for FY-2025, which is below its 5-year historical median of 27.02%. 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 Wendt (India) Ltd?
Wendt (India) Ltd Return on equity is 18.6% for FY-2025, which is below its 5-year historical median of 20.09%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of Wendt (India) Ltd?
Wendt (India) Ltd Cash conversion cycle is 96 days, above its 5-year historical median of 80 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) 0.85 0.92
ROE (%) 18.6 20.09
ROCE (%) 24.33 27.02
Cash Conversion Cycle 96 days 80 days

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

Q.9 Debt to Equity ratio of Wendt (India) Ltd?
Wendt (India) Ltd Debt-to-Equity ratio is 0.01, which is lower the industry average of 0.01, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Wendt (India) Ltd?
Wendt (India) Ltd Debt to cash flow from operations is 0.04, which is at a healthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Wendt (India) Ltd?

Q.1 Promoter shareholding and pledge status of Wendt (India) Ltd?
Promoters hold 37.50% of the Wendt (India) Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Wendt (India) Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Wendt (India) Ltd vs industry peers?
Wendt (India) Ltd revenue CAGR is 11.75%, compared to the industry median CAGR of 12.01%, indicating stable growth and maintaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 3 12
Gross Profit Growth (%) -1.6 14.1
Operating Profit Growth (%) -3.7 14.6
Net Profit Growth (%) -5 14.6
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.85 0.92
ROE (%) 18.6 19.91
ROCE (%) 24.33 26.45
Cash Conversion Cycle (days) 96.49 80

Valuation & price assessment

Q.1 Stock return of Wendt (India) Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 14.1% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
14.1% 15.1% -9.3% -19.1%
Q.2 Valuation ratios of Wendt (India) Ltd vs historical?
The current P/E ratio of 60.27 is higher than its historical median of 53.17, 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 60.27 53.17 52.95
Price to Book 5.86 10.22 10.22
Price to Sales 6.64 9.35 9.26
EV to EBITDA 30.5 32.79 32.78

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