Sterling Tools Ltd. share price target

MCU foray to fasten' growth

STL's net revenue declined 81% YoY to Rs 203mn, due to slowdown of demand across segments (mainly CVs), impacted by production cuts due to lockdown imposed across India. EBITDA turned negative to Rs 49mn, due to negative operating leverage. Higher depreciation and interest costs led to net loss of Rs 88mn. Exports declined by ~85% in Q1 due to lockdowns imposed across geographies. STRT's addition of Hyundai to its new customer list will lead to incremental revenues from FY22. This along with its long-term...

STL's net revenue de-grew by 27% YoY to Rs 879mn, due to the ongoing slowdown across the automobile sector and production cuts taken by major OEMs. Although EBITDA declined 12% YoY to Rs139mn, margin rose 300bps YoY to 16.7%, due to declining commodity prices...

Sterling (STL) reported weak results in Q4FY19. The revenue/EBITDA fell 10/22% YoY in the quarter, due to the slowdown in the automobile segment (especially CVs). The EBITDA margins was 13.7% (-205bps YoY/77bps QoQ), on account of a weak product mix, commodity inflation, and negative operating leverage. Given the overall tepid demand for vehicles, higher inventory levels with dealers, and production cuts by the OEMs, we believe STL will likely remain under pressure for Q1FY20. However, we expect earnings will improve from Q2FY20, due to pre-buying on account of BS VI and a likely revival in economic activities. As STL focuses on...

Sterling tools (STRT) number were broadly in line with estimates. Margins on a sequential basis have started showing signs of improvement at gross level. Considering that raw material pressure has been easing, we expect margins to remain stable / expand from current levels. This will b driven by increase in proportion of specialized fasteners. With capacity expansion on schedule, we believe that STRT will continue to grow on revenue front with strong margins. Effort to expand customer base will also augur well in long term. Considering the market outlook and increase in risk free rate, we...

One of the largest manufacturer of fasteners in India with supplier of high tensile (HT) fasteners to Honda & Maruti . It is one of the progressive OEM suppliers in India with a client base that spans automotive companies in India, Europe and USA. Some of its marquee list of customers includes Hero, Ashok Leyland, TAFE, Mahindra and Mahindra, Volvo, Suzuki, Fiat, Eicher, General Motors, etc. Further, management has a vision to expand exports to North America and other Latin countries in years to come. Tie - up with Meidoh - Gain additional business in PV segments STL will get the technical know-how from Meidoh for all its facilities that will enable STL to manufacture specialized fasteners. Meidoh already has global tie ups with Suzuki that will enable STL to push for specialized fastener supply to Maruti...

One of the largest manufacturer of fasteners in India with supplier of high tensile (HT) fasteners to Honda & Maruti . It is one of the progressive OEM suppliers in India with a client base that spans automotive companies in India, Europe and USA. Some of its marquee list of customers includes Hero, Ashok Leyland, TAFE, Mahindra and Mahindra, Volvo, Suzuki, Fiat, Eicher, General Motors, etc. Further, management has a vision to expand exports to North America and other Latin countries in years to come. Tie - up with Meidoh - Gain additional business in PV segments STL will get the technical know-how from Meidoh for all its facilities that will enable STL to manufacture specialized fasteners. Meidoh already has global tie ups with Suzuki that will enable STL to push for specialized fastener supply to Maruti...

Sterling Tools (STL) continues to strengthen its relationship with OEMs enabling it to expand product portfolio. Higher grade / specialised fasteners proportion are on a constant rise and margin expansion was the logical outcome. We expect the proportion of specialised fasteners to rise gradually for the foreseeable future. Volatility in raw material prices can impact margins for a couple of quarters as the raw material impact is passed on with a lag. Meidoh tie up will open up significant opportunities for STL. The capacity augmentation through a greenfield capacity in Karnataka will...

Sterling Tools Limited (STL), founded in 1979, engages in manufacturing of high-tensile (HT) cold forged fasteners mainly for automobiles OEMs. STL is one of top 3 fasteners manufacturers in India and caters to leading automotive companies in India and Europe. STL's product range includes over 2,000 types of fasteners ranging from 5 mm to 24 mm in diameter. These include special fasteners, standard fasteners, surface treatment and coatings, chassis fasteners and engine fasteners. STL has three manufacturing plants in Haryana...

Auto and Farm Equipment Demand Pick-up Holds Key: Subdued growth and increase in steel prices reduce the QoQ margins - Sterling Tools Ltd posted marginal revenue growth of 1.1% QoQ in Q2FY17 to Rs.962 Mn, on a subdued volume growth. For STL, steel is a main cost component, which amounts to about 40% of raw material cost. The steel prices for the last fewweeks have risen, which lowered EBITDA of Q2FY17 by -1.2% on YoY basis, at Rs. 192 Mn when compared to Rs. 195 Mn in Q1FY17.