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Last Updated on: 23 February, 2024|Author: Getaka | Social: X Twitter Profile

Fundamental Analysis of Sterling Tools Ltd

About the Company - Sterling Tools Ltd

Sterling Tools Ltd. is a Public Limited Listed company incorporated on 07/06/1979 and has its registered office in the State of Delhi, India. Company’s Corporate Identification Number(CIN) is L29222DL1979PLC009668 and registration number is 009668. Currently Company is involved in the business activities of Manufacture of fabricated metal products, except machinery and equipment. Company’s Total Operating Revenue is Rs. 471.24 Cr. and Equity Capital is Rs. 7.20 Cr. for the Year ended 31/03/2022.
INDUSTRYADDRESSCONTACT
FastenersUnit No. 515, DLF Tower A, New Delhi Delhi 110025csec@stlfasteners.com
http://www.stlfasteners.com
Management
NamePosition Held
Mr. Anil AggarwalChairman & Managing Director
Mr. Atul AggarwalWhole Time Director
Mr. Akhill AggarwalNon Executive Director
Mr. Jaideep WadhwaNon Executive Director
Dr. Triloki Nath KapoorIndependent Director
Mr. Chhotu Ram SharmaIndependent Director
Ms. Malini SudIndependent Director
Mr. Shailendra SwarupIndependent Director
Mr. Rakesh BatraIndependent Director

Sterling Tools Ltd. Share Price Update

Share PriceValue
Today₹365.00
Previous Day₹365.10

Basic Stock Data of Sterling Tools Ltd

Market Cap 1,264 Cr.
Current Price 351
High / Low457/313
Stock P/E26.0
Book Value 116
Dividend Yield0.56 %
ROCE13.3 %
ROE11.8 %
Face Value 2.00

Data Source: screener.in

Competitors of Sterling Tools Ltd

Stock NameMarket CapCurrent PriceHigh / LowStock P/EBook ValueDividend YieldROCEROEFace Value
Industry Average0 Cr0000%0%0%0

Sterling Tools Ltd Quarterly Results

MonthDec 2020Mar 2021Jun 2021Sep 2021Dec 2021Mar 2022Jun 2022Sep 2022Dec 2022Mar 2023Jun 2023Sep 2023Dec 2023
Sales11112789128122169174179208212221210232
Expenses8910678108106152152154180189195185206
Operating Profit22211121161722252822252526
OPM %20%16%13%16%13%10%13%14%14%11%12%12%11%
Other Income101111171-2222
Interest2222222222232
Depreciation7777778888888
Profit before tax15124138913221810171618
Tax %25%14%26%25%32%25%26%24%25%22%23%24%22%
Net Profit1211310571017148131214
EPS in Rs3.202.920.872.801.521.912.664.613.862.163.633.463.77

Sterling Tools Ltd Quarterly Chart

Sterling Tools Ltd Profit & Loss

MonthMar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023TTM
Sales372371453512364355510772850
Expenses311295362426304293444674749
Operating Profit6176918660626698101
OPM %16%20%20%17%17%17%13%13%12%
Other Income176762362
Interest6644687910
Depreciation131718192426273232
Profit before tax436075703630356362
Tax %35%35%35%35%15%23%27%24%
Net Profit283949453024264847
EPS in Rs8.2011.4313.6212.528.476.537.0913.2913.11
Dividend Payout %37%17%7%16%24%15%14%15%

Sterling Tools Ltd Profit & Loss Yearly Chart

Sterling Tools Ltd Growth

Compounded Sales Growth
10 Years:%
5 Years:11%
3 Years:28%
TTM:20%
Compounded Profit Growth
10 Years:%
5 Years:-1%
3 Years:14%
TTM:16%
Stock Price CAGR
10 Years:33%
5 Years:3%
3 Years:20%
1 Year:0%
Return on Equity
10 Years:%
5 Years:10%
3 Years:9%
Last Year:12%

Sterling Tools Ltd Balance Sheet

MonthMar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Sep 2023
Equity Capital777777777
Reserves122153237273299324349393412
Borrowings6940349975105126133136
Other Liabilities48677278637983122120
Total Liabilities246267351458444516565656674
Fixed Assets139165159192263257280275281
CWIP1-01047101115
Investments-0156561726232015
Other Assets107101126163163233260349373
Total Assets246267351458444516565656674

Sterling Tools Ltd Reserves and Borrowings Chart

Sterling Tools Ltd Cash Flow

MonthMar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023
Cash from Operating Activity 5659474353162563
Cash from Investing Activity -26-25-75-922-49-39-53
Cash from Financing Activity -21-422652-422310-6
Net Cash Flow9-8-1312-11-44

Sterling Tools Ltd Financial Efficiency Indicators

MonthMar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023
Debtor Days3634372928434538
Inventory Days105125118146158330189153
Days Payable6978795856925255
Cash Conversion Cycle728176117130281182137
Working Capital Days434351628314712591
ROCE %31%32%22%11%9%9%13%

Sterling Tools Ltd Financial Efficiency Indicators Chart

Sterling Tools Ltd Share Holding Pattern

MonthMar 2021Jun 2021Sep 2021Dec 2021Mar 2022Jun 2022Sep 2022Dec 2022Mar 2023Jun 2023Sep 2023Dec 2023
Promoters65.77%65.77%65.77%65.77%65.77%65.77%65.77%65.77%65.77%65.77%65.77%65.77%
FIIs0.00%0.00%0.00%0.04%0.00%0.01%0.01%0.01%0.06%0.03%0.01%0.01%
DIIs8.00%7.16%6.67%6.56%6.56%6.60%5.93%5.33%5.43%5.56%5.71%5.68%
Public26.23%27.07%27.56%27.63%27.67%27.62%28.30%28.90%28.73%28.65%28.52%28.55%
No. of Shareholders9,53412,84918,09717,75218,02116,91317,46816,08318,11119,48321,32424,341

Sterling Tools Ltd Shareholding Pattern Chart

No. of Sterling Tools Ltd Shareholders

Sterling Tools Ltd Mutual Fund Holdings

Fund NameNo of SharesAUM (%)Amount Invested (Cr)
HSBC Small Cap Fund - Regular Plan16777590.4559.89
HDFC Retirement Savings Fund - Hybrid Equity - Regular Plan1600000.455.71
HDFC Retirement Savings Fund - Hybrid Debt - Regular Plan100000.260.4

Sterling Tools Ltd ROCE Trend

Sterling Tools Ltd EPS Trend

Sterling Tools Ltd Key Financial Ratios

MonthMar 23Mar 22Mar 21Mar 20Mar 19
FaceValue2.002.002.002.002.00
Basic EPS (Rs.)13.297.096.538.4712.52
Diluted EPS (Rs.)13.297.096.538.4712.52
Cash EPS (Rs.)22.0914.8513.9915.3617.77
Book Value[Excl.RevalReserv]/Share (Rs.)111.1698.7692.0285.0877.86
Book Value[Incl.RevalReserv]/Share (Rs.)111.1698.7692.0285.0877.86
Revenue From Operations / Share (Rs.)214.30141.4698.03101.11142.18
PBDIT / Share (Rs.)27.8819.3217.9918.6225.67
PBIT / Share (Rs.)19.0811.7310.6711.9020.38
PBT / Share (Rs.)17.589.828.5610.1619.36
Net Profit / Share (Rs.)13.297.266.678.6312.49
NP After MI And SOA / Share (Rs.)13.297.096.538.4712.52
PBDIT Margin (%)13.0113.6518.3518.4118.05
PBIT Margin (%)8.908.2910.8811.7614.33
PBT Margin (%)8.206.948.7310.0413.61
Net Profit Margin (%)6.205.136.808.538.78
NP After MI And SOA Margin (%)6.205.016.658.378.80
Return on Networth / Equity (%)11.957.177.099.9516.08
Return on Capital Employeed (%)14.609.759.4511.0019.84
Return On Assets (%)7.284.644.556.869.85
Long Term Debt / Equity (X)0.090.110.110.150.19
Total Debt / Equity (X)0.330.300.260.170.30
Asset Turnover Ratio (%)1.280.880.730.801.26
Current Ratio (X)1.842.062.122.782.24
Quick Ratio (X)0.961.061.121.701.30
Inventory Turnover Ratio (X)2.861.821.621.743.29
Dividend Payout Ratio (NP) (%)7.5214.100.0023.6119.25
Dividend Payout Ratio (CP) (%)4.526.810.0013.1613.53
Earning Retention Ratio (%)92.4885.900.0076.3980.75
Cash Earning Retention Ratio (%)95.4893.190.0086.8486.47
Interest Coverage Ratio (X)11.3710.138.5310.7125.23
Interest Coverage Ratio (Post Tax) (X)6.034.814.165.9713.27
Enterprise Value (Cr.)1525.68575.61758.95506.401244.24
EV / Net Operating Revenue (X)1.981.132.151.392.43
EV / EBITDA (X)15.198.2711.717.5513.46
MarketCap / Net Operating Revenue (X)1.880.961.991.292.27
Retention Ratios (%)92.4785.890.0076.3880.74
Price / BV (X)3.621.382.121.534.15
Price / Net Operating Revenue (X)1.880.961.991.292.27
EarningsYield0.030.050.030.060.03

Sterling Tools Ltd Profitability Ratios (%)

Sterling Tools Ltd Liquidity Ratios

Sterling Tools Ltd Liquidity Ratios (%)

Sterling Tools Ltd Interest Coverage Ratios (X)

Sterling Tools Ltd Valuation Ratios

YoY Net Profit Growth
Year2016-20172017-20182018-20192019-20202020-20212021-20222022-2023
YoY Net Profit Growth (%)39.29%25.64%-8.16%-33.33%-20.00%8.33%84.62%
Change in YoY Net Profit Growth (%)0.00%-13.64%-33.80%-25.17%13.33%28.33%76.28%

Fair Value / Intrinsic Value of Sterling Tools Ltd

Fair Value: ₹357.88

The stock is undervalued by 1.96% compared to the current price ₹351

*Investments are subject to market risks

Strength and Weakness of Sterling Tools Ltd

StrengthWeakness
  1. The stock has a high average ROCE of 15.88%, which is a positive sign.
  2. The company has higher reserves (284.67 cr) compared to borrowings (90.78 cr), indicating strong financial stability.
  3. The company has shown consistent growth in sales (506.56 cr) and profit (52.67 cr) over the years.
  1. The stock is trading at a high valuation with an average P/B ratio of 14.75 and average Dividend Yield of 10.83%.
  2. The stock has a high average Working Capital Days of 80.63, which may not be favorable.
  3. The stock has a high average Cash Conversion Cycle of 134.50, which may not be favorable.

Should I Buy Sterling Tools Ltd Share Now?

  • Considering various financial indicators, investors might exercise caution regarding investment in Sterling Tools Ltd:
    1. Net Profit Margin: 6.20%
      • Net Profit Margin: This metric indicates the percentage of profit a company makes from its total revenue. A higher net profit margin is generally desirable as it reflects better profitability.
    2. ROCE: 14.60% (Industry Average ROCE: 0%)
      • ROCE (Return on Capital Employed): ROCE measures a company's profitability and the efficiency with which its capital is employed. A higher ROCE indicates efficient use of capital.
    3. Interest Coverage Ratio (Post Tax): 6.03
      • Interest Coverage Ratio: The interest coverage ratio measures a company's ability to cover its interest payments on outstanding debt. A ratio greater than 2 is generally considered healthy as it indicates the company can meet its interest obligations comfortably.
    4. Quick Ratio: 0.96
      • Quick Ratio: The quick ratio assesses a company's ability to cover its short-term liabilities with its most liquid assets. A ratio higher than 1 suggests the company can meet its short-term obligations without relying heavily on inventory.
    5. ✗ Stock P/E: 26.5 (Industry average Stock P/E: 0)
      • Stock P/E (Price-to-Earnings) Ratio: The P/E ratio compares a company's current share price to its earnings per share. A lower P/E ratio relative to industry peers or historical values may indicate that the stock is undervalued.
    6. ✓ Total Debt / Equity: 0.33
      • Total Debt / Equity: This ratio measures a company's financial leverage by comparing its total debt to its total equity. A lower ratio indicates lower financial risk and greater financial stability.
    The current analysis suggests exercising caution. It's advisable to conduct further research or consult with financial experts before considering any investment.

About the Author

Author Avatar
Getaka

Getaka, CFA, a financial analyst with 15 years of experience in the industry. Getaka holds an MBA degree and the Chartered Financial Analyst designation, demonstrating his profound understanding of financial analysis and investment management. Throughout his career, he has conducted numerous financial analyses and due diligence processes for companies in the industry, and has a strong track record of identifying key trends and opportunities. He leverages his expertise to deliver a thorough financial analysis of a company, encompassing its financial performance, key ratios, future prospects, and risks. Getaka is committed to providing accurate, reliable, and trustworthy information to help readers make informed decisions about their finances and investments.

Disclaimer: This article is for informational purposes only and should not be construed as financial advice. The author is not a SEBI registered financial advisor and does not have any vested interest in Sterling Tools Ltd. Investors are advised to conduct their own due diligence and consult with a financial professional before making any investment decisions. The information provided in this article is based on publicly available data and the author's analysis, but it may not be comprehensive or up-to-date. The author and getaka.co.in are not responsible for any errors or omissions in the content. This article is not intended to promote any particular investment strategy or recommendation, and readers should consult with their own financial advisors before making any investment decisions. Data Source: NSE