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Check Before You Invest : Scoda Tubes Ltd

BSE: 544411 NSE: SCODATUBES ISIN: INE090501011
  |   Sector:  Metals & Mining   |   Industry:  Steel & Iron Products

Snapshot

Q.1 Which industry/sub-sector does Scoda Tubes Ltd belong to?
Scoda Tubes Ltd belongs to the Metals & Mining sector, operating specifically within the Steel & Iron Products segment.
Q.2 Is Scoda Tubes Ltd a good quality company?
Scoda Tubes 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 Scoda Tubes Ltd undervalued or overvalued?
Scoda Tubes 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 3-year
Historic Median
Price to Earnings 21.8 29.84
Price to Book 2.23 2.52
Price to Sales 1.65 1.95
EV to EBITDA 10.9 12.56
Q.4 Is Scoda Tubes Ltd a good buy now?
Scoda Tubes 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 Scoda Tubes Ltd?
Scoda Tubes Ltd revenue growth is 21.3% for FY-2025, which is below its 3-year CAGR of 35.7%, indicating slower growth.

Q.2 Gross Profit margin of Scoda Tubes Ltd?
Scoda Tubes Ltd Gross profit margin which is the profit after deduction of direct costs, is 12.4% for FY-2025, which is above its 3-year median of 10.6%, indicating increasing margins.

Q.3 Operating Profit Margin of Scoda Tubes Ltd?
Scoda Tubes Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 16.1% for FY-2025, which is above its 3-year median of 14.7% indicating increasing margins.

Q.4 Net Profit Margin of Scoda Tubes Ltd?
Scoda Tubes Ltd Net Profit Margin is 6.55% for FY-2025, is above its 3-year median of 4.58%, indicating increasing margins.
Current Level 3-year
Historic Median
Gross Profit Margin (%) 12.4 10.6
Operating Profit Margin (%) 16.1 14.7
Net Profit Margin (%) 6.55 4.58

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Scoda Tubes Ltd?
Scoda Tubes Ltd Return on Asset is 8.17%, which is above its 3-year historical median of 6.41%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Scoda Tubes Ltd?
Scoda Tubes Ltd Return on capital employed is 20.38% for FY-2025, which is in line with its 3-year historical median of 19.97%. 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 Scoda Tubes Ltd?
Scoda Tubes Ltd Return on equity is 29.66% for FY-2025, which is in line with its 3-year historical median of 29.66%, indicating the business is making similar use of its shareholders capital.

Q.8 Cash conversion cycle of Scoda Tubes Ltd?
Scoda Tubes Ltd Cash conversion cycle is 117 days, in line with its 3-year historical median of 113 days, indicating stable working capital management. However, you need to compare this with its peers in the industry.
Current Level 3-year
Historic Median
Asset Turnover (x) 1.25 1.4
ROE (%) 29.66 29.66
ROCE (%) 20.38 19.97
Cash Conversion Cycle 117 days 113 days

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

Q.9 Debt to Equity ratio of Scoda Tubes Ltd?
Scoda Tubes Ltd Debt-to-Equity ratio is 1.40, which is above the industry average of 0.31, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Scoda Tubes Ltd?
Scoda Tubes Ltd Debt to cash flow from operations is 11.42, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Scoda Tubes Ltd?

Q.1 Promoter shareholding and pledge status of Scoda Tubes Ltd?
Promoters hold 66.43% of the Scoda Tubes Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Scoda Tubes Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Scoda Tubes Ltd vs industry peers?
Scoda Tubes Ltd revenue CAGR is 35.70%, compared to the industry median CAGR of 6.94%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 3-year
Industry Median
Revenue Growth (%) 21.3 6.9
Gross Profit Growth (%) 42.9 10.1
Operating Profit Growth (%) 32.2 8.2
Net Profit Growth (%) 77.8 11.6
Operating Efficiency
Current Level 3-year
Industry Median
Asset Turnover (x) 1.25 1.4
ROE (%) 29.66 9.64
ROCE (%) 20.38 12.04
Cash Conversion Cycle (days) 116.84 67

Valuation & price assessment

Q.1 Stock return of Scoda Tubes Ltd over the last decade?
Over the last - year(s), the stock has delivered a CAGR of N/A% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
- - - -
Q.2 Valuation ratios of Scoda Tubes Ltd vs historical?
The current P/E ratio of 21.8 is lower than its historical median of 29.84, indicating that the stock is trading below its historical average valuation.
Q.3 How do the current valuation ratios compare with 3-year historical median and industry numbers?
Valuation Ratios Current 3-year
Historic Median
3-year
Industry Median
Price to Earnings 21.8 29.84 20.20
Price to Book 2.23 2.52 1.84
Price to Sales 1.65 1.95 0.91
EV to EBITDA 10.9 12.56 11.48

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