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Check Before You Invest : Somi Conveyor Beltings Ltd

BSE: 533001 NSE: SOMICONVEY ISIN: INE323J01019
  |   Sector:  Agriculture & Allied activities   |   Industry:  Rubber Products

Snapshot

Q.1 Which industry/sub-sector does Somi Conveyor Beltings Ltd belong to?
Somi Conveyor Beltings Ltd belongs to the Agriculture & Allied activities sector, operating specifically within the Rubber Products segment.
Q.2 Is Somi Conveyor Beltings Ltd a good quality company?
Somi Conveyor Beltings 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 Somi Conveyor Beltings Ltd undervalued or overvalued?
Somi Conveyor Beltings 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 25.38 28.68
Price to Book 1.67 1.23
Price to Sales 1.26 1.15
EV to EBITDA 13.27 12.92
Q.4 Is Somi Conveyor Beltings Ltd a good buy now?
Somi Conveyor Beltings 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 Somi Conveyor Beltings Ltd?
Somi Conveyor Beltings Ltd revenue growth is -0.9% for FY-2025, which is below its 5-year CAGR of 16.95%, indicating slower growth.

Q.2 Gross Profit margin of Somi Conveyor Beltings Ltd?
Somi Conveyor Beltings Ltd Gross profit margin which is the profit after deduction of direct costs, is 8.9% for FY-2025, which is above its 5-year median of 7.1%, indicating increasing margins.

Q.3 Operating Profit Margin of Somi Conveyor Beltings Ltd?
Somi Conveyor Beltings Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 10.28% for FY-2025, which is in line with its 5-year median of 10.28% indicating stable margins.

Q.4 Net Profit Margin of Somi Conveyor Beltings Ltd?
Somi Conveyor Beltings Ltd Net Profit Margin is 5.42% for FY-2025, is above its 5-year median of 3.76%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 8.9 7.1
Operating Profit Margin (%) 10.28 10.28
Net Profit Margin (%) 5.42 3.76

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Somi Conveyor Beltings Ltd?
Somi Conveyor Beltings Ltd Return on Asset is 4.73%, which is above its 5-year historical median of 3.31%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Somi Conveyor Beltings Ltd?
Somi Conveyor Beltings Ltd Return on capital employed is 10.35% for FY-2025, which is above its 5-year historical median of 7.92%. 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 Somi Conveyor Beltings Ltd?
Somi Conveyor Beltings Ltd Return on equity is 7.43% for FY-2025, which is above its 5-year historical median of 5.31%, indicating the business is making better use of its shareholders capital.

Q.8 Cash conversion cycle of Somi Conveyor Beltings Ltd?
Somi Conveyor Beltings Ltd Cash conversion cycle is 190 days, in line with its 5-year historical median of 197 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) 0.87 0.87
ROE (%) 7.43 5.31
ROCE (%) 10.35 7.92
Cash Conversion Cycle 190 days 197 days

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

Q.9 Debt to Equity ratio of Somi Conveyor Beltings Ltd?
Somi Conveyor Beltings Ltd Debt-to-Equity ratio is 0.28, which is lower the industry average of 0.44, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Somi Conveyor Beltings Ltd?
Somi Conveyor Beltings Ltd Debt to cash flow from operations is -2.59, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Somi Conveyor Beltings Ltd?

Q.1 Promoter shareholding and pledge status of Somi Conveyor Beltings Ltd?
Promoters hold 59.09% of the Somi Conveyor Beltings Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Somi Conveyor Beltings Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Somi Conveyor Beltings Ltd vs industry peers?
Somi Conveyor Beltings Ltd revenue CAGR is 16.95%, compared to the industry median CAGR of 8.96%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) -0.9 9
Gross Profit Growth (%) 28.6 18.5
Operating Profit Growth (%) 11.1 13.1
Net Profit Growth (%) - 20.1
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.87 1.31
ROE (%) 7.43 5.31
ROCE (%) 10.35 7.92
Cash Conversion Cycle (days) 190.03 76

Valuation & price assessment

Q.1 Stock return of Somi Conveyor Beltings Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 9.3% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
9.3% 16.8% 33.7% -35.3%
Q.2 Valuation ratios of Somi Conveyor Beltings Ltd vs historical?
The current P/E ratio of 25.38 is lower than its historical median of 28.68, 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 25.38 28.68 25.04
Price to Book 1.67 1.23 2.69
Price to Sales 1.26 1.15 1.31
EV to EBITDA 13.27 12.92 13.74

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