Sonam Limited

Consumer Cyclical — Furnishings, Fixtures & Appliances · NSE

₹77.18+₹0.95 (+1.25%)

DalalBaazaar Score

63 / 100

🟢 Good

Verdict

REASONABLE

Risk

Low

Driven by micro-cap size, which brings thin liquidity.

In simple words: Strong business and financial position, with both sales and profits growing well. Valuation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:03 pm

Understanding the Business

Company site ↗

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

What does this company do?

Sonam Limited engages in the manufacture and sale of horological items, clocks, clock movements, and related items in India. The company also provides rotating pendulum musical, light sensor, sweep office, economy, diamond series, classy dial, and corporate clocks.

IndustryFurnishings, Fixtures & Appliances

SectorConsumer Cyclical

Employees174

Annual revenue₹171 Cr

How does it make money?

Turns over ₹171 Cr a year. Of every ₹100 of sales, about ₹4 reaches shareholders as profit, with ₹9 left at the operating level before interest, tax and depreciation. Each of its 174 employees supports ₹98.1 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹98.1 lakh

Who are its competitors?

The closest listed comparisons in its industry are HAVELLS INDIA LIMITED, VOLTAS LTD, TITAN COMPANY LIMITED. 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?Some evidence

ROCE of 15.2% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

Peer median ROE17.1%

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 +108% while net margin moved -12% 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+108%

Margin effect-12%

DalalBaazaar Score

63/ 100

Good

Weighted across six categories. Every point is explained below.

• ROE of 10.2% is moderate

Quality vs. Valuation

Company Quality

67/ 100

Good

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

Valuation

55/ 100

Fair

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

42.2x

3Y Median

36.3x

40 monthly readings · mean 38.0x · range 25.1x–63.2x

Sector Median

68.5x

median of 3 sector peers

⚠️Current valuation is approximately 16% above its 3y median of 36.3x. 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 38% below the peer median of 68.5x.

vs. its own history

Fair

36.3x median over 40 months · +16%

vs. sector peers

Cheap

68.5x median of 3 peers · -38%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

22.3x

PEG

1.89

What's Good / What's Bad

🟢 What's Going Well4

Debt is being paid down
Total debt is down 18% over 3 years.
Return on capital is rising
ROCE has improved from 11.4% to 15.2%.
Very low debt
Debt/Equity of 0.30x leaves the balance sheet with plenty of headroom.
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

2 items require attention · 1 high · 1 watch

🔴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.
🟡Margins are compressingFinancial
EBITDA margin is down 2.6 points over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Deleveraging frees up earnings
Debt is down 18% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Cheaper than its peers
It trades 38% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹4 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.
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 11.3% to 8.7%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
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

1Revenue growth stays above 21% a year✓ 27.6% CAGR
Latest reported year was 76.0%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 7%✓ 8.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✓ ₹4 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.4x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 12%✓ 15.2%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

7 / 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

6 good · 4 neutral · 1 weak

Market Cap

₹309 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

42.2x

Expensive

Expensive — verify against sector peers

P/B Ratio

4.32x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹1.83

Profitable

Profitable on a per-share basis

ROE

10.2%

Moderate

Moderate capital efficiency

ROCE

15.2%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.30x

Low

Conservative leverage

Revenue Growth (YoY)

76.0%

Healthy

Healthy top-line growth

Profit Growth (YoY)

127.3%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.78%

Modest

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

Free Cash Flow

₹4 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

6.6%

Average

Average margins

Net Margin

4.5%

Average

Average bottom-line conversion

Current Ratio

1.57

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

-0.01

Defensive

Steadier than the market

52W Range Position

93%

Near high

Near its 52-week high

Technical Snapshot

SMA 20 / SMA 50

70.5 / 67.3

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

77.6

Overbought zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹82 Cr	₹87 Cr	₹104 Cr	₹171 Cr	+27.6%
EBITDA	₹9 Cr	₹13 Cr	₹14 Cr	₹15 Cr	+16.9%
EBITDA Margin	11.3%	14.4%	13.2%	8.7%	—
PAT (Net Profit)	₹4 Cr	₹6 Cr	₹6 Cr	₹7 Cr	+22.3%
EPS	₹1	₹1.38	₹1.58	—	—
ROE	7.7%	9.7%	10.1%	10.2%	—
ROCE	11.4%	15.5%	15.7%	15.2%	—
Total Debt	₹26 Cr	₹22 Cr	₹18 Cr	₹21 Cr	-6.3%
Free Cash Flow	₹6 Cr	₹6 Cr	₹9 Cr	₹4 Cr	-12.2%

🟢 Revenue has grown at 27.6% a year over 3 years.

🟢 EBITDA has grown at 16.9% a year over 3 years.

🔴 EBITDA Margin has fallen from 11.3% to 8.7% over 3 years (-2.6 pts).

🟢 PAT (Net Profit) has grown at 22.3% a year over 3 years.

🟢 ROE has risen from 7.7% to 10.2% over 3 years (+2.6 pts).

🟢 ROCE has risen from 11.4% to 15.2% over 3 years (+3.8 pts).

🟢 Total Debt has shrunk at 6.3% a year over 3 years.

🔴 Free Cash Flow has shrunk at 12.2% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹115 Cr

Total Liabilities

₹43 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

₹6 Cr

Capex

-₹2 Cr

Corporate Actions

Dividend Rate

₹0.6

Ex-Dividend Date

04 Aug 2026

Peer Comparison

Company	P/E	ROE
HAVELLS INDIA LIMITED	43.5x	17.1%
VOLTAS LTD	75.8x	7.0%
TITAN COMPANY LIMITED	68.5x	36.7%

Recent News

1 positive1 mixed4 general

Sonam Ltd is Rated Buy

MarketsMojo, 15 Oct

SONAM Share Price Target 2027 to 2030: Analyst Outlook

Univest, 18 AugAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Sonam Clock Ltd. Key Financial Ratios – Valuation, Profitability & More

Value Research, 01 Sept

Sonam declares interim dividend of Re 0.30 per share

scanx.trade, 26 JulCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Sonam Ltd. Share Price: 52-Week High, Valuation, Sector

Univest, 19 Aug

Sonam Wangchuk's condition stable, under continuous monitoring: Safdarjung Hospital

The Economic Times, 19 Jul

Watch Items

Trading very close to its 52-week high — momentum-driven entries here carry more mean-reversion risk.
Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in overbought territory — momentum entries here carry more short-term pullback risk.

DalalBaazaar Thesis

StrongFinancial Health · Growth

MiddlingBusiness Quality · Valuation · Risk

WeakProfitability

Points for each in the Score ↑

Good business at a fair price

A sound business at a reasonable valuation. Suitable for a long-term holding, with the valuation and the direction of margins worth watching rather than the business itself. 1 high-severity red flag sits above this conclusion and should be read first.

All 5 tripwires holding · see Key things to watch ↑