Sharda Motor Industries Limited

Consumer Cyclical — Auto Parts · NSE

₹889.45+₹5.15 (+0.58%)

DalalBaazaar Score

68 / 100

🟢 Good

Verdict

REASONABLE

Risk

High

Driven by high debt relative to equity, small-cap size, which brings sharper price swings, falling profits.

In simple words: Strong business and financial position, though profits are falling even as sales grow. Debt is 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 Sharda Motor Industries Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Sharda Motor Industries Limited manufactures, assembles, trades in, and sells auto components to automobiles and electronics original equipment manufacturers in India.

IndustryAuto Parts

SectorConsumer Cyclical

Employees1,094

Annual revenue₹3,367 Cr

How does it make money?

Turns over ₹3,367 Cr a year. Of every ₹100 of sales, about ₹10 reaches shareholders as profit, with ₹13 left at the operating level before interest, tax and depreciation. Each of its 1,094 employees supports ₹3.08 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin13.2%

Net margin10.3%

Revenue / employee₹3.08 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?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 33.7%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 26.3% against a peer median of 23.0% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

ROCE33.7%

ROE26.3%

Peer median ROE23.0%

What is the outlook?

1 analysts covering the stock expect revenue to grow about 11.0% and earnings to grow about 15.0% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+11.0%

Est. earnings growth+15.0%

Analysts1

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +26% while net margin moved +32% 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+26%

Margin effect+32%

DalalBaazaar Score

68/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.56 — historically steadier than the index
✗ Small Cap: thinner liquidity and sharper drawdowns are normal
✗ High leverage magnifies any downturn in earnings
✓ Profits have been consistent from year to year

Quality vs. Valuation

Company Quality

69/ 100

Good

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

Valuation

77/ 100

Cheap

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

A good business currently available at an undemanding price — the combination this framework is built to look for.

Historical Valuation

Current P/E

15.4x

3Y Median

34.0x

40 monthly readings · mean 32.6x · range 14.7x–69.7x

Sector Median

45.7x

median of 4 sector peers

🟢Current valuation is approximately 55% below its 3y median of 34.0x. 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 66% below the peer median of 45.7x.

vs. its own history

Cheap

34.0x median over 40 months · -55%

vs. sector peers

Cheap

45.7x median of 4 peers · -66%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

15.4x

P/B

3.89x

EV/EBITDA

11.4x

PEG

0.84

Dividend Yield

2.25%

What's Good / What's Bad

🟢 What's Going Well4

Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
High return on capital employed
ROCE of 33.7% is the mark of a business that converts capital into profit efficiently.
Valuation below its historical average
At 15.4x the stock trades 55% below its own median of 34.0x.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Debt is rising
Total debt is up 99% over 3 years — worth checking what it funded.

Red Flags

2 items require attention · 2 high

🔴Debt has risen sharplyFinancial
Total debt is up 99% over 3 years, from ₹25 Cr to ₹49 Cr.
🔴High leverageFinancial
Debt/Equity of 3.74x — earnings must service borrowings before shareholders see anything.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 33.7% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Priced below its own history
The stock trades 55% 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 66% 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?

Leverage amplifies any setback
Debt/Equity of 3.74x. Interest is payable whether or not the business has a good year.
Growth barely outpaces inflation
Revenue compounding at 8.0% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
Size brings its own risk
Small 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.
Several serious flags at once
2 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

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

1EBITDA margin holds above 11%✓ 13.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Revenue growth stays above 6% a year✓ 8.0% CAGR
Latest reported year was 33.7%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
3Free cash flow remains positive✓ ₹271 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.1x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 31%✓ 33.7%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

9 / 12 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
✓ Analyst consensus isn't majority-sell
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

6 good · 3 neutral · 2 weak

Market Cap

₹5,106 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

15.4x

Fair

Fairly valued against the generic band

P/B Ratio

3.89x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹57.83

Profitable

Profitable on a per-share basis

ROE

26.3%

Strong

Strong capital efficiency

ROCE

33.7%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

3.74x

High

High leverage

Revenue Growth (YoY)

33.7%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-13.4%

Falling

Profits are shrinking

Dividend Yield

2.25%

Healthy

Meaningful cash return while you hold the stock

Free Cash Flow

₹271 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹889.45

P/E (Forward)

12.1x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

8.7%

Average

Average margins

Net Margin

9.1%

Average

Average bottom-line conversion

Current Ratio

1.98

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.56

Defensive

Steadier than the market

52W Range Position

39%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

930.1 / 916.0

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

33.4

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹2,673 Cr	₹2,782 Cr	₹2,810 Cr	₹3,367 Cr	+8.0%
EBITDA	₹315 Cr	₹454 Cr	₹482 Cr	₹446 Cr	+12.3%
EBITDA Margin	11.8%	16.3%	17.2%	13.2%	—
PAT (Net Profit)	₹208 Cr	₹300 Cr	₹315 Cr	₹345 Cr	+18.4%
EPS	₹35.04	₹50.39	₹27.43	₹60.17	+19.8%
ROE	27.5%	29.8%	29.7%	26.3%	—
ROCE	35.4%	38.6%	37.8%	33.7%	—
Total Debt	₹25 Cr	₹24 Cr	₹52 Cr	₹49 Cr	+25.9%
Free Cash Flow	-₹303 Cr	₹296 Cr	₹178 Cr	₹271 Cr	—

🟢 Revenue has grown at 8.0% a year over 3 years.

🟢 EBITDA has grown at 12.3% a year over 3 years.

🟢 EBITDA Margin has risen from 11.8% to 13.2% over 3 years (+1.5 pts).

🟢 PAT (Net Profit) has grown at 18.4% a year over 3 years.

🟢 EPS has grown at 19.8% a year over 3 years.

🔴 ROE has fallen from 27.5% to 26.3% over 3 years (-1.2 pts).

🔴 ROCE has fallen from 35.4% to 33.7% over 3 years (-1.7 pts).

🔴 Total Debt has grown at 25.9% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹303 Cr to ₹271 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹2,215 Cr

Total Liabilities

₹902 Cr

Total Debt

₹49 Cr

Cash & Equivalents

₹92 Cr

Operating Cash Flow

₹363 Cr

Capex

-₹92 Cr

Shareholding (proxy)

Institutional Holding

13.1%

Insider Holding

64.8%

Corporate Actions

Dividend Rate

₹20

Ex-Dividend Date

18 Sept 2026

Analyst Consensus

Recommendations

1 Buy · 0 Hold · 0 Sell

Target Price (Mean)

₹1,340

+50.7% vs CMP

Target Range

₹1,340 – ₹1,340

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

1 positive4 mixed1 general

We Think That There Are Some Issues For Sharda Motor Industries (NSE:SHARDAMOTR) Beyond Its Promising Earnings

Simply Wall Street, 29 MayResults

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

Sharda Motor Industries Share Price and Valuation After Fall

Univest, 08 OctPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Sharda Motor profit falls 13% to ₹865cr as revenue rises 34%

scanx.trade, 10 AugResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Sharda Motor Industries Q4 PAT rises 7% YoY to Rs 89 crore

Business Standard, 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.

Sharda Motor Standalone March 2026 Net Sales at Rs 971.76 crore, up 29.59% Y-o-Y

Moneycontrol.com, 22 May

Why Is Sharda Motor Industries Share Price Falling Key Reasons 2026?

Univest, 04 MayPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Watch Items

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

DalalBaazaar Thesis

🟢Business QualityStrong14.1/20

🟡Financial HealthAdequate12.5/20

🟢GrowthStrong13.1/20

🟢ProfitabilityStrong11.5/15

🟢ValuationAttractive11/15

🟡RiskModerate5.7/10

Attractive on both counts

A good business currently available at an undemanding price — the combination this framework exists to look for. The work left is qualitative: whether the advantage the numbers imply is one you can identify and expect to last. 2 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above 11%13.2%
✓Revenue growth stays above 6% a year8.0% CAGR
✓Free cash flow remains positive₹271 Cr
✓Debt / EBITDA stays below 2x0.1x
✓ROCE stays above 31%33.7%