Sundaram-Clayton Limited

Industrials — Metal Fabrication · NSE

₹1,122.30−₹12.50 (−1.10%)

DalalBaazaar Score

50 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

High

Driven by moderate debt load, short-term liabilities exceed short-term assets, negative free cash flow.

In simple words: Strong business and financial position, 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, 7:01 pm

Understanding the Business

Company site ↗

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

What does this company do?

Sundaram-Clayton Limited engages in manufacturing and sale of non-ferrous gravity and pressure die castings in India.

IndustryMetal Fabrication

SectorIndustrials

Employees1,189

Annual revenue₹2,012 Cr

How does it make money?

Turns over ₹2,012 Cr a year. Of every ₹100 of sales, about ₹13 reaches shareholders as profit, with ₹6 left at the operating level before interest, tax and depreciation. Each of its 1,189 employees supports ₹1.69 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.69 Cr

Who are its competitors?

The closest listed comparisons in its industry are TATA STEEL LIMITED, JSW STEEL LIMITED, HINDALCO INDUSTRIES LTD, VEDANTA 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 19.8% 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 ROE18.7%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -1% while net margin moved -336% 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-1%

Margin effect-336%

DalalBaazaar Score

50/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 0.2% a year

Quality vs. Valuation

Company Quality

46/ 100

Average

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

9.9x

Sector Median

12.2x

median of 4 sector peers

🟢Against its sector it trades 19% below the peer median of 12.2x.

vs. its own history

Not enough price and earnings history

vs. sector peers

Fair

12.2x median of 4 peers · -19%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

30.8x

PEG

—

What's Good / What's Bad

🟢 What's Going Well2

Return on equity is rising
ROE has improved from -13.9% to 19.5%.
Return on capital is rising
ROCE has improved from -1.6% to 19.8%.

🔴 What Needs Attention0

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

Red Flags

3 items require attention · 1 high · 2 watch

🔴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.
🟡Receivables growing faster than salesFinancial
Receivables up 45% against revenue up -1% — sales are being booked faster than they are collected.
🟡Short-term liquidity is tightFinancial
Current ratio of 0.88 — near-term obligations exceed near-term assets.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 19.8% 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.

🔴 Bear CaseWhat could go wrong?

The debt load needs earnings to hold up
Debt is 10.7x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Sales are being booked faster than collected
Receivables are up 45% against revenue up -1%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
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 4%✓ 6.0%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 10.7x
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✗ -₹280 Cr
Profit that never becomes cash eventually stops being profit.
4ROCE stays above 17%✓ 19.8%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Interest cover stays above 4x✓ 4.0x
How much operating profit can fall before interest stops being comfortably covered.

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

₹2,474 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

9.9x

Cheap

Cheap against the generic band

P/B Ratio

1.91x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹113.77

Profitable

Profitable on a per-share basis

ROE

19.5%

Strong

Strong capital efficiency

ROCE

19.8%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

1.00x

Moderate

Moderate leverage

Revenue Growth (YoY)

14.8%

Healthy

Healthy top-line growth

Profit Growth (YoY)

2469.8%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.40%

Modest

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

Free Cash Flow

-₹280 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

-6.1%

Weak

Thin margins leave little room for error

Net Margin

11.9%

Good

Strong bottom-line conversion

Current Ratio

0.88

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.75

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

1196.8 / 1241.1

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

35.0

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹2,026 Cr	₹1,401 Cr	₹2,239 Cr	₹2,012 Cr	-0.2%
EBITDA	₹134 Cr	₹65 Cr	₹119 Cr	₹121 Cr	-3.3%
EBITDA Margin	6.6%	4.6%	5.3%	6.0%	—
PAT (Net Profit)	-₹108 Cr	-₹120 Cr	-₹11 Cr	₹252 Cr	—
EPS	₹-53.3	₹-59.38	₹-5.05	₹114.48	—
ROE	-13.9%	-20.0%	-1.1%	19.5%	—
ROCE	-1.6%	-2.9%	7.2%	19.8%	—
Total Debt	₹1,107 Cr	₹1,426 Cr	₹1,493 Cr	₹1,298 Cr	+5.4%
Free Cash Flow	-₹61 Cr	-₹228 Cr	-₹597 Cr	-₹280 Cr	—

🟡 Revenue has been broadly flat over 3 years (-0.2% a year).

🔴 EBITDA has shrunk at 3.3% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 6.0% over 3 years.

🟢 PAT (Net Profit) has turned positive, from -₹108 Cr to ₹252 Cr.

🟢 EPS has turned positive, from ₹-53.3 to ₹114.48.

🟢 ROE has risen from -13.9% to 19.5% over 3 years (+33.4 pts).

🟢 ROCE has risen from -1.6% to 19.8% over 3 years (+21.4 pts).

🔴 Total Debt has grown at 5.4% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹3,282 Cr

Total Liabilities

₹1,986 Cr

Cash & Equivalents

₹44 Cr

Operating Cash Flow

-₹4 Cr

Capex

-₹275 Cr

Shareholding (proxy)

Institutional Holding

20.0%

Insider Holding

64.5%

Corporate Actions

Dividend Rate

₹4.5

Ex-Dividend Date

02 Apr 2026

Peer Comparison

Company	P/E	ROE
TATA STEEL LIMITED	19.8x	10.8%
JSW STEEL LIMITED	12.0x	24.7%
HINDALCO INDUSTRIES LTD	12.3x	12.0%
VEDANTA LIMITED	10.4x	18.7%

Recent News

1 positive5 general

Sundaram-Clayton Share Price with valuation and sector view

Univest, 09 Oct

Sundaram Clayton (SUNCLAY) Share/Stock Price Live, NSE

TechGraph, 08 Oct

Sundaram Clayton Stock Falls 7% Despite Strong Top-Line Growth; Here’s What Spooked Investors By Trade Brains

Investing.com India, 28 Jul

Is Sundaram-Clayton (NSE:SUNCLAY) A Risky Investment?

Simply Wall Street, 04 Feb

Sundaram Clayton revenue rises 19% in Q1FY27 as margins compress

scanx.trade, 28 JulResults

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

Sundaram-Clayton Share Price: price action near yearly low

Univest, 07 Oct

Watch Items

Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongBusiness Quality · Profitability · Valuation

WeakFinancial Health · Growth · 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. 1 high-severity red flag sits above this conclusion and should be read first.

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