Sal Automotive Limited

Consumer Cyclical — Auto Parts · BSE

₹200.00+₹1.00 (+0.50%)

DalalBaazaar Score

46 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

High

Driven by moderate debt load, negative free cash flow, micro-cap size, which brings thin liquidity.

In simple words: Reasonable but unspectacular business quality, with both sales and profits growing well. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:09 pm

Mixed / neutral. No major red flags jump out, but nothing here screams "obviously cheap" either. This is a name that needs a peer comparison and a view on near-term earnings triggers before sizing a position.

Understanding the Business

Company site ↗

The 60-second version of Sal Automotive Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Sal Automotive Limited manufactures and sells automobile components in India. The company operates through two segments: Automobile Components and Agriculture Implements.

IndustryAuto Parts

SectorConsumer Cyclical

Employees342

Annual revenue₹381 Cr

How does it make money?

Turns over ₹381 Cr a year. Of every ₹100 of sales, about ₹1 reaches shareholders as profit, with ₹3 left at the operating level before interest, tax and depreciation. Each of its 342 employees supports ₹1.11 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin3.5%

Net margin1.1%

Revenue / employee₹1.11 Cr

Who are its competitors?

The closest listed comparisons in its industry are BOSCH LIMITED, MARUTI SUZUKI INDIA LTD., TVS MOTOR COMPANY LTD, EICHER MOTORS LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

BOSCH LIMITEDP/E 56.9x · ROE 15.9%

MARUTI SUZUKI INDIA LTD.P/E 25.2x · ROE 13.4%

TVS MOTOR COMPANY LTDP/E 56.8x · ROE 35.8%

EICHER MOTORS LTDP/E 34.7x · ROE 23.0%

What is its competitive advantage?Little sign of one

Returns on capital of 14.1% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

ROCE14.1%

ROE9.2%

Peer median ROE23.0%

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +27% while net margin moved -29% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+27%

Margin effect-29%

DalalBaazaar Score

46/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROE of 9.2% is weak
✗ ROE has fallen by 4.2 points over the period

Quality vs. Valuation

Company Quality

40/ 100

Weak

How good the business is, ignoring the share price entirely.

Valuation

75/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

Optically cheap, but the underlying business scores poorly. Cheap-and-weak is what a value trap looks like from the outside — the low price may be deserved.

Historical Valuation

Current P/E

17.5x

3Y Median

23.4x

40 monthly readings · mean 23.6x · range 14.7x–32.0x

Sector Median

45.7x

median of 4 sector peers

🟢Current valuation is approximately 25% below its 3y median of 23.4x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 62% below the peer median of 45.7x.

vs. its own history

Cheap

23.4x median over 40 months · -25%

vs. sector peers

Cheap

45.7x median of 4 peers · -62%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

17.5x

P/B

2.01x

EV/EBITDA

10.2x

PEG

—

Dividend Yield

1.00%

What's Good / What's Bad

🟢 What's Going Well2

Valuation below its historical average
At 17.5x the stock trades 25% below its own median of 23.4x.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention4

Free cash flow is negative
The business is not currently covering its capital spending from operations.
Return on equity is falling
ROE has dropped from 13.4% to 9.2% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 18.3% to 14.1% — often a sign of competition or overexpansion.
Receivables growing faster than sales
Receivables are up 54% against revenue growth of 27% — customers are taking longer to pay.

Red Flags

2 items require attention · 2 watch

🟡Free cash flow is negativeFinancial
Free cash flow was -₹9 Cr in the latest year.
🟡Receivables growing faster than salesFinancial
Receivables up 54% against revenue up 27% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 25% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Cheaper than its peers
It trades 62% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Sales are being booked faster than collected
Receivables are up 54% against revenue up 27%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Returns on shareholder capital are falling
ROE has dropped from 13.4% to 9.2%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 1%✓ 3.5%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA stays below 2x✗ 2.9x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
3Free cash flow remains positive✗ -₹9 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✓ 3.5x
How much operating profit can fall before interest stops being comfortably covered.
5Revenue growth stays above 6% a year✓ 8.2% CAGR
Latest reported year was 15.8%. The bar is set below the established compounding rate, so ordinary variation does not trip it.

Investment Checklist

6 / 11 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

3 good · 7 neutral · 1 weak

Market Cap

₹96 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

17.5x

Fair

Fairly valued against the generic band

P/B Ratio

2.01x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹11.44

Profitable

Profitable on a per-share basis

ROE

9.2%

Moderate

Moderate capital efficiency

ROCE

14.1%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.84x

Moderate

Moderate leverage

Revenue Growth (YoY)

15.8%

Healthy

Healthy top-line growth

Profit Growth (YoY)

139.1%

Healthy

Profits growing at a healthy clip

Dividend Yield

1.00%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

-₹9 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹200

Operating Margin

2.8%

Weak

Thin margins leave little room for error

Net Margin

1.4%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.06

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.40

Defensive

Steadier than the market

52W Range Position

38%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

195.5 / 196.0

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

59.7

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹300 Cr	₹304 Cr	₹373 Cr	₹381 Cr	+8.2%
EBITDA	₹12 Cr	₹14 Cr	₹14 Cr	₹13 Cr	+3.2%
EBITDA Margin	4.0%	4.5%	3.9%	3.5%	—
PAT (Net Profit)	₹5 Cr	₹5 Cr	₹5 Cr	₹4 Cr	-3.2%
EPS	₹9.61	₹10.63	₹11.25	₹8.88	-2.6%
ROE	13.4%	13.1%	12.5%	9.2%	—
ROCE	18.3%	22.7%	20.0%	14.1%	—
Total Debt	₹39 Cr	₹27 Cr	₹24 Cr	₹39 Cr	-0.4%
Free Cash Flow	₹5 Cr	₹7 Cr	₹3 Cr	-₹9 Cr	—

🟢 Revenue has grown at 8.2% a year over 3 years.

🟢 EBITDA has grown at 3.2% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 3.5% over 3 years.

🔴 PAT (Net Profit) has shrunk at 3.2% a year over 3 years.

🔴 EPS has shrunk at 2.6% a year over 3 years.

🔴 ROE has fallen from 13.4% to 9.2% over 3 years (-4.2 pts).

🔴 ROCE has fallen from 18.3% to 14.1% over 3 years (-4.2 pts).

🟡 Total Debt has been broadly flat over 3 years (-0.4% a year).

🔴 Free Cash Flow has turned negative, from ₹5 Cr to -₹9 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹151 Cr

Total Liabilities

₹105 Cr

Total Debt

₹39 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹4 Cr

Capex

-₹5 Cr

Shareholding (proxy)

Institutional Holding

4.4%

Insider Holding

77.7%

Corporate Actions

Dividend Rate

₹2

Ex-Dividend Date

11 Sept 2026

Peer Comparison

Company	P/E	ROE
BOSCH LIMITED	56.9x	15.9%
MARUTI SUZUKI INDIA LTD.	25.2x	13.4%
TVS MOTOR COMPANY LTD	56.8x	35.8%
EICHER MOTORS LTD	34.7x	23.0%

Recent News

2 mixed4 general

SAL Automotive accepts Kulvinder Singh's resignation as Finance Controller

scanx.trade, 28 Jul

Sal Automotive Q1 FY27 Results: Revenue Rs 115 Cr, PAT Surges 138%

Univest, 17 AugResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Compare with

Equitymaster, 26 Sept

SAT stays SEBI order against Setco Automotive promoters in fund diversion case

Moneycontrol.com, 10 May

SAL Automotive Limited Schedules Board Meeting on May 22, 2026 to Approve FY26 Audited Financial Results

scanx.trade, 22 MayResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

The 10 Most Valuable Car Companies in the World | Investing

U.S. News - Money, 26 Jun

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🔴Business QualityWeak7.5/20

🟡Financial HealthAdequate10.5/20

🔴GrowthWeak7.7/20

🔴ProfitabilityWeak4.6/15

🟢ValuationAttractive10.7/15

🟡RiskModerate5.4/10

Cheap, but for a reason

The low price is the whole case here, and the business underneath scores poorly. Cheap-and-weak is what a value trap looks like from the outside — it needs a specific reason the numbers are about to improve, not just the observation that they are low.

This thesis breaks if

✓EBITDA margin holds above 1%3.5%
✗Debt / EBITDA stays below 2x2.9x
✗Free cash flow remains positive-₹9 Cr
✓Interest cover stays above 3x3.5x
✓Revenue growth stays above 6% a year8.2% CAGR