Sterling Tools Limited (STL) (BSE: 530759) (NSE: STERTOOLS), one of the leading automotive fastener manufacturers in India, has been awarded the long-term rating of [ICRA]AA- (Positive). The outlook has been revised from Stable to Positive by ICRA Limited, one of the leading Credit Rating Agency in India. This upgrade is driven by STL's strong credit profile and robust growth in the electric vehicle (EV) components segment, which has led to increased diversification of STL's earnings.
STL has managed to uphold its market position over the years and Sterling Gtake E-mobility Limited (SGEM), wholly owned subsidiary, has gained a significant early-mover advantage in the EV sector, particularly in supply chain management and technical expertise, positioning Sterling Tools Limited well for the anticipated growth in EV penetration.
Despite stiff competition from both organized and numerous unorganized players in the fastener segment, STL has maintained its market standing over the years. STL reported a healthy EBITDA Margin of 14.7% in FY2024. STL is likely to maintain a healthy financial risk profile and comfortable debt metrics, supported by robust earnings and improved accruals.
Alongside this, SGEM has recorded 40% of the market share in the high-speed scooter segment and achieved an overall share of 30% in the electric two-wheeler (e-2W) segment in FY 2024. Supported by a robust order book and increasing demand for EVs, SGEM has expanded its production capacity from 4 lakh MCUs to more than 6 lakh MCUs per annum. The Government's focus on promoting EVs is also supporting to SGEM's revenue prospects.
Through consistent investments in innovations and developments in fasteners and EV product sectors, the company has successfully increased its share of business (SoB) with leading automobile OEMs across the country. The revenue visibility over the medium term is expected to be driven by consistent demand for EVs, the addition of new customers, and healthy sales volumes and realizations.
Shares of Sterling Tools Limited was last trading in BSE at Rs. 559.80 as compared to the previous close of Rs. 548.75. The total number of shares traded during the day was 75470 in over 4904 trades.
The stock hit an intraday high of Rs. 595.00 and intraday low of 544.85. The net turnover during the day was Rs. 43441068.00. |
