Sar Auto Products Limited

Consumer Cyclical — Auto Parts · BSE

₹4,879.35−₹256.80 (−5.00%)

DalalBaazaar Score

43 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

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

In simple words: The business is earning a fairly low return on the money invested in it, 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, 6:57 pm

Understanding the Business

Company site ↗

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

What does this company do?

Sar Auto Products Limited manufactures and sells auto components in India.

IndustryAuto Parts

SectorConsumer Cyclical

Employees6

Annual revenue₹14 Cr

How does it make money?

Turns over ₹14 Cr a year. Of every ₹100 of sales, about ₹5 reaches shareholders as profit, with ₹22 left at the operating level before interest, tax and depreciation. Each of its 6 employees supports ₹2.37 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹2.37 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.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 4.4% 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.

Peer median ROE23.0%

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +30% while net margin moved -17% 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+30%

Margin effect-17%

DalalBaazaar Score

43/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ P/E of 2528.2x is demanding — it needs sustained high growth to justify
✗ P/E is 49% above its own historical median of 1692.3x — expensive by its own standards
✗ P/B of 129.30x is a steep premium to book

Quality vs. Valuation

Company Quality

47/ 100

Average

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

Valuation

23/ 100

Expensive

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

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

2528.2x

3Y Median

1692.3x

40 monthly readings · mean 1839.5x · range 622.4x–6083.7x

Sector Median

45.7x

median of 4 sector peers

⚠️Current valuation is approximately 49% above its 3y median of 1692.3x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

⚠️Against its sector it trades 5431% above the peer median of 45.7x.

vs. its own history

Expensive

1692.3x median over 40 months · +49%

vs. sector peers

Expensive

45.7x median of 4 peers · +5431%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

753.2x

PEG

992.98

What's Good / What's Bad

🟢 What's Going Well1

Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

5 items require attention · 4 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 272% over 3 years, from ₹7 Cr to ₹26 Cr.
🔴Free cash flow negative for 4 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🔴Inventory building faster than salesFinancial
Inventory up 353% against revenue up 30% — stock may not be moving.
🟡Margins are compressingFinancial
EBITDA margin is down 2.0 points over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

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?

Margins are being competed away
EBITDA margin has fallen from 23.9% to 21.8%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The debt load needs earnings to hold up
Debt is 8.3x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
The price already assumes success
The stock trades 49% above its own median multiple. At this level the business has to deliver just to stand still, and a stumble is repriced twice — lower earnings on a lower multiple.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
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 20%✓ 21.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 8.3x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Free cash flow remains positive✗ -₹7 Cr
Profit that never becomes cash eventually stops being profit.
4Revenue growth stays above 7% a year✓ 9.1% CAGR
Latest reported year was 134.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
5ROCE stays above 8%✗ 4.4%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

5 / 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 · 3 neutral · 5 weak

Market Cap

₹2,325 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

2528.2x

Expensive

Expensive — verify against sector peers

P/B Ratio

129.30x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹1.93

Profitable

Profitable on a per-share basis

ROE

3.7%

Weak

Weak capital efficiency

ROCE

4.4%

Weak

Low return on total capital employed

Debt/Equity

1.44x

Moderate

Moderate leverage

Revenue Growth (YoY)

134.9%

Healthy

Healthy top-line growth

Profit Growth (YoY)

225.0%

Healthy

Profits growing at a healthy clip

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹7 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

1.5%

Weak

Thin margins leave little room for error

Net Margin

5.3%

Average

Average bottom-line conversion

Current Ratio

1.07

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

-0.16

Defensive

Steadier than the market

52W Range Position

42%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

6943.1 / 5345.4

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

13.0

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹11 Cr	₹20 Cr	₹14 Cr	₹14 Cr	+9.1%
EBITDA	₹3 Cr	₹3 Cr	₹3 Cr	₹3 Cr	+5.9%
EBITDA Margin	23.9%	13.2%	21.0%	21.8%	—
PAT (Net Profit)	₹1 Cr	₹1 Cr	₹0 Cr	₹1 Cr	+2.5%
EPS	₹1.3	₹2.45	₹0.88	₹1.41	+2.7%
ROE	3.9%	6.9%	2.4%	3.7%	—
ROCE	6.3%	9.0%	4.6%	4.4%	—
Total Debt	₹7 Cr	₹16 Cr	₹18 Cr	₹26 Cr	+55.0%
Free Cash Flow	-₹3 Cr	-₹2 Cr	-₹2 Cr	-₹7 Cr	—

🟢 Revenue has grown at 9.1% a year over 3 years.

🟢 EBITDA has grown at 5.9% a year over 3 years.

🔴 EBITDA Margin has fallen from 23.9% to 21.8% over 3 years (-2.0 pts).

🟢 PAT (Net Profit) has grown at 2.5% a year over 3 years.

🟢 EPS has grown at 2.7% a year over 3 years.

🟡 ROE has held roughly flat at 3.7% over 3 years.

🔴 ROCE has fallen from 6.3% to 4.4% over 3 years (-1.9 pts).

🔴 Total Debt has grown at 55.0% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹45 Cr

Total Liabilities

₹27 Cr

Cash & Equivalents

₹6 Cr

Operating Cash Flow

-₹3 Cr

Capex

-₹4 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

95.6%

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

6 general

Sar Auto Products Ltd. Upper Circuit Today: Price, Data and Peers

Univest, 21 Sept

SAR Auto Prod Standalone March 2026 Net Sales at Rs 6.08 crore, up 164.28% Y-o-Y

Moneycontrol.com, 27 May

Sar Auto Products 39th AGM passes all 7 resolutions with majority

scanx.trade, 28 Sept

Sar Auto Products Ltd. Key Financial Ratios – Valuation, Profitability & More

Value Research, 29 Aug

Compare with

Equitymaster, 30 Sept

Sar Auto Products Limited Announces Appointment of Harsh Mukeshbhai Raidya as Independent Director, Effective August 3, 2026

marketscreener.com, 29 Sept

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

MiddlingBusiness Quality · Financial Health · Growth

WeakProfitability · Valuation · Risk

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 4 high-severity red flags sit above this conclusion and should be read first.

3 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Free cash flow remains positive; ROCE stays above 8% · see Key things to watch ↑