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Check Before You Invest : Shayona Engineering Ltd

BSE: 544686 NSE: ISIN: INE0UCL01011
  |   Sector:  Automobiles   |   Industry:  Castings/Forgings

Snapshot

Q.1 Which industry/sub-sector does Shayona Engineering Ltd belong to?
Shayona Engineering Ltd belongs to the Automobiles sector, operating specifically within the Castings/Forgings segment.
Q.2 Is Shayona Engineering Ltd a good quality company?
Shayona Engineering Ltd is a quality company, based on a 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 Shayona Engineering Ltd undervalued or overvalued?
Shayona Engineering Ltd appears Overvalued, as its key valuation ratios are higher 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 3-year
Historic Median
Price to Earnings 22.31 21.64
Price to Book 2.18 2.12
Price to Sales 2.34 2.27
EV to EBITDA 13.22 12.91
Q.4 Is Shayona Engineering Ltd a good buy now?
Shayona Engineering 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 Shayona Engineering Ltd?
Shayona Engineering Ltd revenue growth is 51.3% for FY-2025, which is below its 3-year CAGR of 71.47%, indicating slower growth.

Q.2 Gross Profit margin of Shayona Engineering Ltd?
Shayona Engineering Ltd Gross profit margin which is the profit after deduction of direct costs, is 18.1% for FY-2025, which is above its 3-year median of 16.5%, indicating increasing margins.

Q.3 Operating Profit Margin of Shayona Engineering Ltd?
Shayona Engineering Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 22.15% for FY-2025, which is above its 3-year median of 19.77% indicating increasing margins.

Q.4 Net Profit Margin of Shayona Engineering Ltd?
Shayona Engineering Ltd Net Profit Margin is 10.48% for FY-2025, is in line with its 3-year median of 10.48%, indicating stable margins.
Current Level 3-year
Historic Median
Gross Profit Margin (%) 18.1 16.5
Operating Profit Margin (%) 22.15 19.77
Net Profit Margin (%) 10.48 10.48

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Shayona Engineering Ltd?
Shayona Engineering Ltd Return on Asset is 11.54%, which is in line with its 3-year historical median of 11.54%, indicating stable asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Shayona Engineering Ltd?
Shayona Engineering Ltd Return on capital employed is 29.31% for FY-2025, which is in line with its 3-year historical median of 29.31%. 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 Shayona Engineering Ltd?
Shayona Engineering Ltd Return on equity is 34.81% for FY-2025, which is below its 3-year historical median of 40.45%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of Shayona Engineering Ltd?
Shayona Engineering Ltd Cash conversion cycle is 102 days, above its 3-year historical median of 75 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.
Current Level 3-year
Historic Median
Asset Turnover (x) 1.1 1.56
ROE (%) 34.81 40.45
ROCE (%) 29.31 29.31
Cash Conversion Cycle 102 days 75 days

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

Q.9 Debt to Equity ratio of Shayona Engineering Ltd?
Shayona Engineering Ltd Debt-to-Equity ratio is 1.41, which is above the industry average of 0.28, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Shayona Engineering Ltd?
Shayona Engineering Ltd Debt to cash flow from operations is -6.06, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Shayona Engineering Ltd?

Q.1 Promoter shareholding and pledge status of Shayona Engineering Ltd?
Promoters hold 64.14% of the Shayona Engineering Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

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

Q.1 Revenue growth of Shayona Engineering Ltd vs industry peers?
Shayona Engineering Ltd revenue CAGR is 71.47%, compared to the industry median CAGR of 8.95%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 3-year
Industry Median
Revenue Growth (%) 51.3 9
Gross Profit Growth (%) 65.9 33.5
Operating Profit Growth (%) 66.9 28.8
Net Profit Growth (%) 41.5 55.7
Operating Efficiency
Current Level 3-year
Industry Median
Asset Turnover (x) 1.1 1.27
ROE (%) 34.81 10.75
ROCE (%) 29.31 12.56
Cash Conversion Cycle (days) 102.01 75

Valuation & price assessment

Q.1 Stock return of Shayona Engineering 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 Shayona Engineering Ltd vs historical?
The current P/E ratio of 22.31 is in line with than its historical median of 21.64, indicating that the stock is trading near 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 22.31 21.64 22.23
Price to Book 2.18 2.12 2.77
Price to Sales 2.34 2.27 1.98
EV to EBITDA 13.22 12.91 12.16

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