Sundaram Fasteners
Stock Snapshot
Price Performance
Vista Outlook
Basis of our Recommendation
Sundaram Fasteners is positioned for robust growth, driven by management's strategic pivot towards electric vehicles (EVs) and non-automotive sectors, which is expected to enhance revenue streams significantly. The company's recent earnings call highlighted strong demand visibility and a disciplined INR 400 crore capex program aimed at expanding capacity and modernizing operations. This aligns with Vista's forecast of accelerating revenue growth beyond historical levels, supported by a stable margin outlook. The anticipated increase in non-automotive revenue to 50% and a substantial EV contract further bolster the company's competitive position. However, challenges such as rising material costs and geopolitical tensions could impact margins. Overall, the favorable macro environment, characterized by improving auto sales and government incentives for EVs, supports a positive outlook. Key opportunities include the successful execution of EV projects and expansion into high-growth sectors, while watchpoints include potential tariff impacts and supply chain uncertainties over the next 12-24 months
Why We Like This Stock
- Management's focus on expanding non-automotive revenue to 50% enhances growth potential
- Strong demand visibility and a disciplined capex program support revenue acceleration
- Government incentives and favorable market conditions for EVs provide a solid growth foundation
Things To Watch Out For
- Rising steel and aluminum prices may pressure profit margins
- Geopolitical tensions could create uncertainty in demand and supply chains
- Evolving US tariffs on auto components pose risks to export competitiveness
Key Parameters
Financial Snapshot
View Technicals Analysis →| Actuals | Forecast | ||||
|---|---|---|---|---|---|
| FY24 | FY25 | FY26 | FY27 | FY28 | |
| Revenue (Cr.) | 5,666 | 5,955 | 6,289 | 6,921 | 7,449 |
| Profit Before Tax (Cr.) | 696 | 716 | 801 | 850 | 924 |
| PBT Margin | 12.3% | 12.0% | 12.7% | 12.3% | 12.4% |
| Net Profit (Cr.) | 526 | 554 | 607 | 642 | 695 |
| Earnings Per Share | 24.8 | 26.2 | 28.8 | 30.5 | 33.1 |
Analyst Recommendations
No analyst recommendations available.
Company Overview
Show Company Profile
Sundram Fasteners Limited manufactures and sells components for the automotive, infrastructure, wind energy, aerospace, defense, farm equipment, industrial, aviation, and other sectors in India, China, the Americas, and internationally. The company's products include high tensile fasteners, such as wind energy, automotive, engine, chassis, and aerospace and aviation fasteners; cold extruded parts, including gear blanks, transmission shafts, cams, starter sleeves and pinions, CV joint parts, and fan hubs; and hot forged parts, such as bevel gears and pinions, hub rings, clutch hubs, crankshafts sprockets, stainless steel turbocharger parts, and connecting rods. It also provides powertrain components, such as turbine and output shafts, sungear shafts, slip yokes, clutch hubs, and crankshaft sprockets; powder metallurgy parts comprising rotors and gears, synchronizer hubs, shock absorber components, valve train components, bushes, and structural parts; metal and nylon radiator caps; pumps and assemblies comprising water and oil pumps, mechanical fuel pumps, manual and auto belt tensioners, rocker assemblies, suspension and precision parts, and fan support and camshafts products, as well as iron powder units, including powders for press and sinter applications, plain iron powders, diffusion bonded powders, pre-alloyed powders, and press ready mixes units. In addition, the company generates power using non-conventional sources; manufactures spokes and nipples, automobile kits, tools, dowel pins, small screws, cold extruded parts and other parts; and engages in information technology business providing enterprise solutions for core industries like manufacturing, automotive and distribution. Sundram Fasteners Limited was incorporated in 1962 and is headquartered in Chennai, India.