Sundaram Brake Linings Limited

Consumer Cyclical — Auto Parts · NSE

₹657.00−₹2.85 (−0.43%)

DalalBaazaar Score

40 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

Driven by micro-cap size, which brings thin liquidity, a very high earnings multiple, which leaves little margin for disappointment, falling profits.

In simple words: The business is earning a fairly low return on the money invested in it, but sales are shrinking. 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 Sundaram Brake Linings Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Sundaram Brake Linings Limited manufactures and sells asbestos free friction materials in India and internationally. The company offers brake linings, such as CV linings, PV linings, brake pads and clutch facings.

IndustryAuto Parts

SectorConsumer Cyclical

Employees976

Annual revenue₹342 Cr

How does it make money?

Turns over ₹342 Cr a year. Of every ₹100 of sales, about ₹1 reaches shareholders as profit, with ₹4 left at the operating level before interest, tax and depreciation. Each of its 976 employees supports ₹35.1 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹35.1 lakh

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 5.8% 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?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -3% while net margin moved -155% 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-3%

Margin effect-155%

DalalBaazaar Score

40/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 1.0% a year
✗ Profit fell 50.4% in the latest year

Quality vs. Valuation

Company Quality

41/ 100

Weak

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

Valuation

29/ 100

Expensive

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

Weak on business quality and not cheap enough to compensate.

Historical Valuation

Current P/E

72.1x

2Y Median

46.7x

28 monthly readings · mean 53.1x · range 28.6x–118.2x

Sector Median

45.7x

median of 4 sector peers

⚠️Current valuation is approximately 54% above its 2y median of 46.7x. 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 58% above the peer median of 45.7x.

vs. its own history

Expensive

46.7x median over 28 months · +54%

vs. sector peers

Expensive

45.7x median of 4 peers · +58%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

22.9x

PEG

—

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 1.3% to 3.9% over 3 years.
Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
Return on equity is rising
ROE has improved from -5.6% to 2.5%.
Return on capital is rising
ROCE has improved from -1.7% to 5.8%.

🔴 What Needs Attention0

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

Red Flags

No automated checks triggered

None of the automated financial checks below were triggered on the years of data available. That is not the same as a clean bill of health — see what could not be checked.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 1.3% to 3.9%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹14 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.

🔴 Bear CaseWhat could go wrong?

The debt load needs earnings to hold up
Debt is 3.4x 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 54% 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 2%✓ 3.9%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 3.4x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Interest cover stays above 3x✗ 2.0x
How much operating profit can fall before interest stops being comfortably covered.
4Free cash flow remains positive✓ ₹14 Cr
Profit that never becomes cash eventually stops being profit.
5ROCE stays above 8%✗ 5.8%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

4 / 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

₹259 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

72.1x

Expensive

Expensive — verify against sector peers

P/B Ratio

2.53x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹9.11

Profitable

Profitable on a per-share basis

ROE

2.5%

Weak

Weak capital efficiency

ROCE

5.8%

Weak

Low return on total capital employed

Debt/Equity

0.45x

Low

Conservative leverage

Revenue Growth (YoY)

-1.1%

Shrinking

Sales are contracting

Profit Growth (YoY)

-50.4%

Falling

Profits are shrinking

Dividend Yield

0.10%

Modest

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

Free Cash Flow

₹14 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

0.8%

Weak

Thin margins leave little room for error

Net Margin

1.0%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.39

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.62

Defensive

Steadier than the market

52W Range Position

43%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

678.0 / 737.2

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

45.4

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹353 Cr	₹350 Cr	₹349 Cr	₹342 Cr	-1.0%
EBITDA	₹4 Cr	₹21 Cr	₹16 Cr	₹13 Cr	+44.2%
EBITDA Margin	1.3%	6.1%	4.6%	3.9%	—
PAT (Net Profit)	-₹5 Cr	₹10 Cr	₹5 Cr	₹3 Cr	—
EPS	₹-12.15	₹25.65	₹13.15	₹6.52	—
ROE	-5.6%	10.6%	5.2%	2.5%	—
ROCE	-1.7%	13.6%	9.0%	5.8%	—
Total Debt	₹50 Cr	₹44 Cr	₹56 Cr	₹46 Cr	-2.9%
Free Cash Flow	-₹5 Cr	₹9 Cr	-₹8 Cr	₹14 Cr	—

🟡 Revenue has been broadly flat over 3 years (-1.0% a year).

🟢 EBITDA has grown at 44.2% a year over 3 years.

🟢 EBITDA Margin has risen from 1.3% to 3.9% over 3 years (+2.6 pts).

🟢 PAT (Net Profit) has turned positive, from -₹5 Cr to ₹3 Cr.

🟢 EPS has turned positive, from ₹-12.15 to ₹6.52.

🟢 ROE has risen from -5.6% to 2.5% over 3 years (+8.1 pts).

🟢 ROCE has risen from -1.7% to 5.8% over 3 years (+7.5 pts).

🟢 Total Debt has shrunk at 2.9% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹5 Cr to ₹14 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹209 Cr

Total Liabilities

₹107 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

₹21 Cr

Capex

-₹7 Cr

Shareholding (proxy)

Institutional Holding

2.0%

Insider Holding

66.1%

Corporate Actions

Dividend Rate

₹0.65

Ex-Dividend Date

17 Jul 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 positive1 mixed3 general

Sundaram Brake Linings Ltd. Share Price Near 52-Week High

Univest, 14 Aug

Sundaram Brake Linings Q1 Results: Net Profit Turns Positive To ₹48.21 Cr

scanx.trade, 08 AugResults

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

Penny Stock Below Rs 100: This Multibagger Microcap Industrial Products Company Secures Rs 15,660,960 Crore Order; Shares Hit 20% Upper Circuit

Dalal Street Investment Journal, 17 JulOrder win

🟢Potentially positiveAn order or contract win, which adds to future revenue. How much depends on its size against annual sales and on when it is executed.

Sundaram Brake Linings Ltd. Upper Circuit Today: Price, Data and Peers

Univest, 24 Sept

Sundaram Brake Linings appoints Hari S as CFO

Business Standard, 09 Mar

Sundaram Brake Linings Board Meet on May 25, 2026 to Consider FY26 Results and Final Dividend

scanx.trade, 25 MayCapital return

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

Watch Items

Revenue growth is negative (-1.1%) on the latest reported period — check if this is one-off or a trend.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

MiddlingFinancial Health · Profitability

WeakBusiness Quality · Growth · Valuation · Risk

Points for each in the Score ↑

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation.

3 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Interest cover stays above 3x; ROCE stays above 8% · see Key things to watch ↑