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Check Before You Invest : Salasar Techno Engineering Ltd

BSE: 540642 NSE: SALASAR ISIN: INE170V01027
  |   Sector:  Capital Goods & Industrial Consumables   |   Industry:  Engineering - Industrial Equipments

Snapshot

Q.1 Which industry/sub-sector does Salasar Techno Engineering Ltd belong to?
Salasar Techno Engineering Ltd belongs to the Capital Goods & Industrial Consumables sector, operating specifically within the Engineering - Industrial Equipments segment.
Q.2 Is Salasar Techno Engineering Ltd a good quality company?
Salasar Techno Engineering Ltd is a average quality company, based on a somewhat consistent 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 Salasar Techno Engineering Ltd undervalued or overvalued?
Salasar Techno Engineering Ltd appears Somewhat Undervalued, as its key valuation ratios are lower 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 49.85 40.52
Price to Book 1.43 2.93
Price to Sales 0.79 1.29
EV to EBITDA 11.3 16.31
Q.4 Is Salasar Techno Engineering Ltd a good buy now?
Salasar Techno Engineering 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 Salasar Techno Engineering Ltd?
Salasar Techno Engineering Ltd revenue growth is 19.8% for FY-2025, which is below its 5-year CAGR of 22.43%, indicating slower growth.

Q.2 Gross Profit margin of Salasar Techno Engineering Ltd?
Salasar Techno Engineering Ltd Gross profit margin which is the profit after deduction of direct costs, is 4.7% for FY-2025, which is below its 5-year median of 6.8%, indicating decreasing margins.

Q.3 Operating Profit Margin of Salasar Techno Engineering Ltd?
Salasar Techno Engineering Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 8.1% for FY-2025, which is below its 5-year median of 9.55% indicating decreasing margins.

Q.4 Net Profit Margin of Salasar Techno Engineering Ltd?
Salasar Techno Engineering Ltd Net Profit Margin is 1.32% for FY-2025, is below its 5-year median of 4.38%, indicating decreasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 4.7 6.8
Operating Profit Margin (%) 8.1 9.55
Net Profit Margin (%) 1.32 4.38

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Salasar Techno Engineering Ltd?
Salasar Techno Engineering Ltd Return on Asset is 1.33%, which is below its 5-year historical median of 5.09%, indicating deteriorated asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Salasar Techno Engineering Ltd?
Salasar Techno Engineering Ltd Return on capital employed is 9.62% for FY-2025, which is below its 5-year historical median of 14.23%. 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 Salasar Techno Engineering Ltd?
Salasar Techno Engineering Ltd Return on equity is 3.15% for FY-2025, which is below its 5-year historical median of 11.8%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of Salasar Techno Engineering Ltd?
Salasar Techno Engineering Ltd Cash conversion cycle is 152 days, below its 5-year historical median of 163 days, indicating improved working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 1.01 1.17
ROE (%) 3.15 11.8
ROCE (%) 9.62 14.23
Cash Conversion Cycle 152 days 163 days

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

Q.9 Debt to Equity ratio of Salasar Techno Engineering Ltd?
Salasar Techno Engineering Ltd Debt-to-Equity ratio is 0.41, which is above the industry average of 0.18, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Salasar Techno Engineering Ltd?
Salasar Techno Engineering Ltd Debt to cash flow from operations is -57.83, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Salasar Techno Engineering Ltd?

Q.1 Promoter shareholding and pledge status of Salasar Techno Engineering Ltd?
Promoters hold 47.24% of the Salasar Techno Engineering Ltd, with 4.84% of their stake pledged, indicating low pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Salasar Techno Engineering Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Salasar Techno Engineering Ltd vs industry peers?
Salasar Techno Engineering Ltd revenue CAGR is 22.43%, compared to the industry median CAGR of 3.04%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 19.8 3
Gross Profit Growth (%) -17.1 23.6
Operating Profit Growth (%) -7.4 21.7
Net Profit Growth (%) -64.2 27.1
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 1.01 0.89
ROE (%) 3.15 12.09
ROCE (%) 9.62 14.64
Cash Conversion Cycle (days) 152.39 98

Valuation & price assessment

Q.1 Stock return of Salasar Techno Engineering Ltd over the last decade?
Over the last 5 year(s), the stock has delivered a CAGR of 3.37% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
- 3.4% -6.3% -21.1%
Q.2 Valuation ratios of Salasar Techno Engineering Ltd vs historical?
The current P/E ratio of 49.85 is higher than its historical median of 40.52, 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 49.85 40.52 29.36
Price to Book 1.43 2.93 2.91
Price to Sales 0.79 1.29 2.93
EV to EBITDA 11.3 16.31 15.77

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