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Check Before You Invest : Star Delta Transformers Ltd

BSE: 539255 NSE: ISIN: INE541K01014
  |   Sector:  Capital Goods & Industrial Consumables   |   Industry:  Electric Equipment

Snapshot

Q.1 Which industry/sub-sector does Star Delta Transformers Ltd belong to?
Star Delta Transformers Ltd belongs to the Capital Goods & Industrial Consumables sector, operating specifically within the Electric Equipment segment.
Q.2 Is Star Delta Transformers Ltd a good quality company?
Star Delta Transformers 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 Star Delta Transformers Ltd undervalued or overvalued?
Star Delta Transformers Ltd appears Somewhat 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 5-year
Historic Median
Price to Earnings 15.19 15.59
Price to Book 1.86 1.56
Price to Sales 1.05 1.27
EV to EBITDA 10.13 8.52
Q.4 Is Star Delta Transformers Ltd a good buy now?
Star Delta Transformers 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 Star Delta Transformers Ltd?
Star Delta Transformers Ltd revenue growth is 1.2% for FY-2025, which is below its 5-year CAGR of 16.76%, indicating slower growth.

Q.2 Gross Profit margin of Star Delta Transformers Ltd?
Star Delta Transformers Ltd Gross profit margin which is the profit after deduction of direct costs, is 10.6% for FY-2025, which is below its 5-year median of 11.9%, indicating decreasing margins.

Q.3 Operating Profit Margin of Star Delta Transformers Ltd?
Star Delta Transformers Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 10.35% for FY-2025, which is above its 5-year median of 7.66% indicating increasing margins.

Q.4 Net Profit Margin of Star Delta Transformers Ltd?
Star Delta Transformers Ltd Net Profit Margin is 7.49% for FY-2025, is below its 5-year median of 8.07%, indicating decreasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 10.6 11.9
Operating Profit Margin (%) 10.35 7.66
Net Profit Margin (%) 7.49 8.07

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Star Delta Transformers Ltd?
Star Delta Transformers Ltd Return on Asset is 11.35%, which is above its 5-year historical median of 7.77%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Star Delta Transformers Ltd?
Star Delta Transformers Ltd Return on capital employed is 18.78% for FY-2025, which is above its 5-year historical median of 13.54%. 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 Star Delta Transformers Ltd?
Star Delta Transformers Ltd Return on equity is 13.45% for FY-2025, which is above its 5-year historical median of 9.64%, indicating the business is making better use of its shareholders capital.

Q.8 Cash conversion cycle of Star Delta Transformers Ltd?
Star Delta Transformers Ltd Cash conversion cycle is 148 days, in line with its 5-year historical median of 148 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) 1.51 0.96
ROE (%) 13.45 9.64
ROCE (%) 18.78 13.54
Cash Conversion Cycle 148 days 148 days

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

Q.9 Debt to Equity ratio of Star Delta Transformers Ltd?
Star Delta Transformers Ltd Debt-to-Equity ratio is 0.03, which is lower the industry average of 0.29, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Star Delta Transformers Ltd?
Star Delta Transformers Ltd Debt to cash flow from operations is 0.74, which is at a healthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Star Delta Transformers Ltd?

Q.1 Promoter shareholding and pledge status of Star Delta Transformers Ltd?
Promoters hold 71.69% of the Star Delta Transformers Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Star Delta Transformers Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Star Delta Transformers Ltd vs industry peers?
Star Delta Transformers Ltd revenue CAGR is 16.76%, compared to the industry median CAGR of 13.19%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 1.2 13.2
Gross Profit Growth (%) -6.3 27.9
Operating Profit Growth (%) 15.4 28.4
Net Profit Growth (%) - 28.5
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 1.51 1.05
ROE (%) 13.45 9.8
ROCE (%) 18.78 13.56
Cash Conversion Cycle (days) 148.11 99

Valuation & price assessment

Q.1 Stock return of Star Delta Transformers Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 15.2% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
15.2% 48.6% 41.6% -15.7%
Q.2 Valuation ratios of Star Delta Transformers Ltd vs historical?
The current P/E ratio of 15.19 is in line with than its historical median of 15.59, indicating that the stock is trading near 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 15.19 15.59 38.08
Price to Book 1.86 1.56 3.97
Price to Sales 1.05 1.27 2.75
EV to EBITDA 10.13 8.52 18.75

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