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Check Before You Invest : Sandhar Technologies Ltd

BSE: 541163 NSE: SANDHAR ISIN: INE278H01035
  |   Sector:  Automobiles   |   Industry:  Auto Ancillary

Snapshot

Q.1 Which industry/sub-sector does Sandhar Technologies Ltd belong to?
Sandhar Technologies Ltd belongs to the Automobiles sector, operating specifically within the Auto Ancillary segment.
Q.2 Is Sandhar Technologies Ltd a good quality company?
Sandhar Technologies 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 Sandhar Technologies Ltd undervalued or overvalued?
Sandhar Technologies 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 17.79 22.14
Price to Book 2.8 2.49
Price to Sales 0.73 0.75
EV to EBITDA 8.64 8.94
Q.4 Is Sandhar Technologies Ltd a good buy now?
Sandhar Technologies 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

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 Sandhar Technologies Ltd?
Sandhar Technologies Ltd revenue growth is 10.3% for FY-2025, which is below its 5-year CAGR of 14.86%, indicating slower growth.

Q.2 Gross Profit margin of Sandhar Technologies Ltd?
Sandhar Technologies Ltd Gross profit margin which is the profit after deduction of direct costs, is 8.8% for FY-2025, which is in line with its 5-year median of 8.5%, indicating stable margins.

Q.3 Operating Profit Margin of Sandhar Technologies Ltd?
Sandhar Technologies Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 9.94% for FY-2025, which is in line with its 5-year median of 9.69% indicating stable margins.

Q.4 Net Profit Margin of Sandhar Technologies Ltd?
Sandhar Technologies Ltd Net Profit Margin is 3.65% for FY-2025, is above its 5-year median of 3.1%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 8.8 8.5
Operating Profit Margin (%) 9.94 9.69
Net Profit Margin (%) 3.65 3.1

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Sandhar Technologies Ltd?
Sandhar Technologies Ltd Return on Asset is 5.45%, which is above its 5-year historical median of 3.91%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Sandhar Technologies Ltd?
Sandhar Technologies Ltd Return on capital employed is 13.39% for FY-2025, which is above its 5-year historical median of 9.56%. 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 Sandhar Technologies Ltd?
Sandhar Technologies Ltd Return on equity is 13.14% for FY-2025, which is above its 5-year historical median of 8.27%, indicating the business is making better use of its shareholders capital.

Q.8 Cash conversion cycle of Sandhar Technologies Ltd?
Sandhar Technologies Ltd Cash conversion cycle is 33 days, in line with its 5-year historical median of 34 days, indicating stable working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 1.5 1.41
ROE (%) 13.14 8.27
ROCE (%) 13.39 9.56
Cash Conversion Cycle 33 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 Sandhar Technologies Ltd?
Sandhar Technologies Ltd Debt-to-Equity ratio is 0.72, which is above the industry average of 0.40, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Sandhar Technologies Ltd?
Sandhar Technologies Ltd Debt to cash flow from operations is 3.33, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Sandhar Technologies Ltd?

Q.1 Promoter shareholding and pledge status of Sandhar Technologies Ltd?
Promoters hold 70.38% of the Sandhar Technologies Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Sandhar Technologies Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Sandhar Technologies Ltd vs industry peers?
Sandhar Technologies Ltd revenue CAGR is 14.86%, compared to the industry median CAGR of 11.89%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 10.3 11.9
Gross Profit Growth (%) 14.3 16.2
Operating Profit Growth (%) 12.3 14.7
Net Profit Growth (%) 29.1 20.1
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 1.5 1.24
ROE (%) 13.14 11.65
ROCE (%) 13.39 13.5
Cash Conversion Cycle (days) 33.25 46

Valuation & price assessment

Q.1 Stock return of Sandhar Technologies Ltd over the last decade?
Over the last 5 year(s), the stock has delivered a CAGR of 21.27% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
- 21.3% 38% 39%
Q.2 Valuation ratios of Sandhar Technologies Ltd vs historical?
The current P/E ratio of 17.79 is lower than its historical median of 22.14, indicating that the stock is trading below 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 17.79 22.14 28.71
Price to Book 2.8 2.49 2.99
Price to Sales 0.73 0.75 1.35
EV to EBITDA 8.64 8.94 11.85

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