Sunita Tools Limited

Industrials — Specialty Industrial Machinery · BSE

₹1,275.00−₹6.75 (−0.53%)

DalalBaazaar Score

54 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

Driven by negative free cash flow, micro-cap size, which brings thin liquidity, a very high earnings multiple, which leaves little margin for disappointment.

In simple words: Reasonable but unspectacular business quality, 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, 6:09 pm

Caution warranted. Multiple fundamental metrics — flagged in red below — point to either valuation stretch, leverage risk, or weakening profitability. This doesn't mean avoid the stock outright, but it does mean the burden of proof is on the growth story to justify the current price.

Understanding the Business

Company site ↗

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

What does this company do?

Sunita Tools Limited, together with its subsidiaries, engages in the manufacturing, machining and grinding, and engineering of goods, steel plates, and mould base and dies sets in India and internationally.

IndustrySpecialty Industrial Machinery

SectorIndustrials

Employees77

Annual revenue₹47 Cr

How does it make money?

Turns over ₹47 Cr a year. Of every ₹100 of sales, about ₹13 reaches shareholders as profit, with ₹21 left at the operating level before interest, tax and depreciation. Each of its 77 employees supports ₹61.4 lakh of revenue a year, the signature of a people-led business.

EBITDA margin20.8%

Net margin13.4%

Revenue / employee₹61.4 lakh

Who are its competitors?

The closest listed comparisons in its industry are SIEMENS LTD, ABB INDIA LIMITED, LARSEN & TOUBRO LTD., HAVELLS INDIA LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

SIEMENS LTDP/E 88.8x · ROE 10.5%

ABB INDIA LIMITEDP/E 92.6x · ROE 19.1%

LARSEN & TOUBRO LTD.P/E 30.1x · ROE 15.2%

HAVELLS INDIA LIMITEDP/E 43.5x · ROE 17.1%

What is its competitive advantage?Little sign of one

Returns on capital of 10.4% 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.

ROCE10.4%

ROE10.5%

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 +242% while net margin moved -38% 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+242%

Margin effect-38%

DalalBaazaar Score

54/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ P/E of 127.2x is demanding — it needs sustained high growth to justify
✗ P/E is 56% above its own historical median of 81.4x — expensive by its own standards
✗ P/B of 11.40x is a steep premium to book

Quality vs. Valuation

Company Quality

61/ 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

127.2x

3Y Median

81.4x

38 monthly readings · mean 85.4x · range 31.3x–149.5x

Sector Median

66.2x

median of 4 sector peers

⚠️Current valuation is approximately 56% above its 3y median of 81.4x. 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 92% above the peer median of 66.2x.

vs. its own history

Expensive

81.4x median over 38 months · +56%

vs. sector peers

Expensive

66.2x median of 4 peers · +92%

vs. generic bands

Expensive

Above 35x

P/E (Trailing)

127.2x

P/B

11.40x

EV/EBITDA

84.0x

PEG

4.50

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well1

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

🔴 What Needs Attention7

Margins are compressing
EBITDA margin has slipped from 35.9% to 20.8% over 3 years.
Debt is rising
Total debt is up 160% over 3 years — worth checking what it funded.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Return on equity is falling
ROE has dropped from 93.1% to 9.0% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 33.6% to 10.4% — often a sign of competition or overexpansion.
Receivables growing faster than sales
Receivables are up 355% against revenue growth of 242% — customers are taking longer to pay.
Valuation above its historical average
At 127.2x the stock trades 56% above its own median of 81.4x.

Red Flags

4 items require attention · 4 high

🔴Debt has risen sharplyFinancial
Total debt is up 160% over 3 years, from ₹17 Cr to ₹43 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.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 15.1 points, from 35.9% to 20.8%.
🔴Receivables growing faster than salesFinancial
Receivables up 355% against revenue up 242% — sales are being booked faster than they are collected.

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 35.9% to 20.8%. 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 4.4x 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 355% against revenue up 242%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
The price already assumes success
The stock trades 56% 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.
Returns on shareholder capital are falling
ROE has dropped from 93.1% to 9.0%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.

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

1Revenue growth stays above 38% a year✓ 50.6% CAGR
Latest reported year was 114.2%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 19%✓ 20.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA falls below 3x✗ 4.4x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
4Free cash flow remains positive✗ -₹38 Cr
Profit that never becomes cash eventually stops being profit.
5ROCE stays above 8%✓ 10.4%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

6 / 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 · 5 neutral · 3 weak

Market Cap

₹801 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

127.2x

Expensive

Expensive — verify against sector peers

P/B Ratio

11.40x

Rich

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

EPS (TTM)

₹10.02

Profitable

Profitable on a per-share basis

ROE

10.5%

Moderate

Moderate capital efficiency

ROCE

10.4%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.61x

Moderate

Moderate leverage

Revenue Growth (YoY)

114.2%

Healthy

Healthy top-line growth

Profit Growth (YoY)

97.5%

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

-₹37 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹1,275

ROA

5.4%

Average

Average asset productivity

Operating Margin

14.4%

Average

Average margins

Net Margin

13.4%

Good

Strong bottom-line conversion

Current Ratio

1.45

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

-0.26

Defensive

Steadier than the market

52W Range Position

93%

Near high

Near its 52-week high

Technical Snapshot

SMA 20 / SMA 50

1172.4 / 1070.1

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

65.1

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹14 Cr	₹26 Cr	₹30 Cr	₹47 Cr	+50.6%
EBITDA	₹5 Cr	₹8 Cr	₹8 Cr	₹10 Cr	+25.6%
EBITDA Margin	35.9%	30.0%	27.1%	20.8%	—
PAT (Net Profit)	₹3 Cr	₹5 Cr	₹5 Cr	₹6 Cr	+28.2%
EPS	₹5.34	₹9.83	₹8.58	—	—
ROE	93.1%	18.9%	10.8%	9.0%	—
ROCE	33.6%	24.0%	15.2%	10.4%	—
Total Debt	₹17 Cr	₹8 Cr	₹5 Cr	₹43 Cr	+37.5%
Free Cash Flow	-₹5 Cr	-₹6 Cr	-₹13 Cr	-₹38 Cr	—

🟢 Revenue has grown at 50.6% a year over 3 years.

🟢 EBITDA has grown at 25.6% a year over 3 years.

🔴 EBITDA Margin has fallen from 35.9% to 20.8% over 3 years (-15.1 pts).

🟢 PAT (Net Profit) has grown at 28.2% a year over 3 years.

🔴 ROE has fallen from 93.1% to 9.0% over 3 years (-84.1 pts).

🔴 ROCE has fallen from 33.6% to 10.4% over 3 years (-23.2 pts).

🔴 Total Debt has grown at 37.5% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹136 Cr

Total Liabilities

₹65 Cr

Total Debt

₹43 Cr

Cash & Equivalents

₹17 Cr

Operating Cash Flow

-₹3 Cr

Capex

-₹35 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

72.0%

Peer Comparison

Company	P/E	ROE
SIEMENS LTD	88.8x	10.5%
ABB INDIA LIMITED	92.6x	19.1%
LARSEN & TOUBRO LTD.	30.1x	15.2%
HAVELLS INDIA LIMITED	43.5x	17.1%

Recent News

1 positive5 general

Sunita Tools Ltd. 52 Week High Streak and Valuation View

Univest, 16 Oct

Sunita Tools Gets First Advance for NATO 155mm Shell Supply

HDFC Sky, 20 Jul

BSE SME stock Sunita Tools zooms 76% in 5 weeks; hits all-time high

Business Standard, 12 Mar

Sunita Tools Upper Circuit Today: Price, Data and Peers

Univest, 12 Oct

Sunita Tools Q4 Results: Net Profit Doubles YoY to ₹34M, Revenue Surges to ₹311M

scanx.trade, 15 MayResults

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

Sunita Tools signs five-year defence MoU with legacy Indian OEM

scanx.trade, 25 Aug

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.

DalalBaazaar Thesis

🟡Business QualityAdequate11.8/20

🟡Financial HealthAdequate11/20

🟢GrowthStrong14.7/20

🟡ProfitabilityModerate8.2/15

🔴ValuationDemanding3.3/15

🟡RiskModerate4.5/10

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.

This thesis breaks if

✓Revenue growth stays above 38% a year50.6% CAGR
✓EBITDA margin holds above 19%20.8%
✗Debt / EBITDA falls below 3x4.4x
✗Free cash flow remains positive-₹38 Cr
✓ROCE stays above 8%10.4%