Buy Sundram Fasteners Ltd For Target Rs. 1,190 By Geojit Financial Services Ltd
Fundamental View
Sundram Fasteners Ltd (SFL), a TVS Group flagship founded in 1962, is a leading global automotive component manufacturer. Specializing in high-tensile fasteners (40% revenue), powertrain, and precision-engineered products, it serves automotive and industrial sectors. With exports contributing 30%, SFL has a strong presence in the U.S., Europe, and China, reinforcing its position as a trusted global supplier.
* Sundram Fasteners delivered a healthy Q2FY26 performance despite macro headwinds, supported by cost discipline and diversified revenue streams. It posted revenue of Rs.1,521cr, up 2.3% YoY, with EBITDA at Rs.252cr and margins at 17%. PAT stood at Rs.153cr, marking a 6.2% YoY growth, aided by softer commodity prices.
* SFL has completed its Rs.100cr wind energy expansion and is investing another Rs.80cr to support volume growth from FY27. It is also developing stainless steel and railway fasteners, with contributions to revenue expected within the next 12 months.
* Robust domestic PV and CV demand, supported by GST reductions and expected export recovery from Q1FY27, positions the company favorably. Management is aiming for a double-digit CAGR over the next three years.
* SFL’s medium-term growth outlook remains robust, driven by structural tailwinds in EV components and wind energy, alongside steady domestic demand recovery. Despite nearterm export weakness, the company is expected to deliver strong growth supported by new product introductions and capacity additions in high-margin segments. As per market consensus, the stock currently trades at 29x 1-year forward P/E, near its 5-year average.
Technical View
* The stock continues to trade within a sideways consolidation zone, reflecting indecision among market participants. The price action remains range-bound, oscillating between converging trendlines, suggesting an accumulation phase.
* The RSI hovers near the 50 mark, indicating a balanced momentum without clear directional bias. Meanwhile, the MACD shows a neutral crossover, aligning with the consolidation setup and hinting that a decisive breakout on either side could determine the next directional move.
* The stock remains in a sideways consolidation phase, with price action exhibiting limited directional bias. The overall setup suggests a period of base formation, and traders may continue to hold existing positions as long as the stock sustains above ?900. A decisive breakout from the consolidation range could trigger renewed momentum toward the profit objective of Rs.1,190 in the near to medium term.
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