Sunflag Iron (SUNFLAG)
CyclicalFairStock Score: 18/100 — RISKY
Score breakdown: P/E: 1/3 · ROCE: 0/2 · Growth: 2/2 · Dividend: 0/1
Key Financials
| Current Price | ₹355.15 |
| Market Cap | ₹6,400.49 Cr |
| P/E Ratio | 31.04 |
| ROCE | 3.95% |
| ROE | 3.03% |
| Dividend Yield | 0.28% |
| Profit Growth | -95.55% |
| Debt/Equity | 0.06 |
| Sales Growth | -98.95% |
| Promoter Holding | 51.16% |
| 52-Week Range | ₹192.15 — ₹428 |
| Sector | Industrial Products |
| Book Value | ₹491.91 |
Strengths
- Balance sheet is conservative with Debt/Equity of just 0.07
- Stock trades at P/B of 0.76, below book value of ₹385.61
- Piotroski F-Score of 7/9 indicates improving fundamentals
- Promoter holding of 51.16% aligns management with minority shareholders
- Latest quarter net profit of ₹60 Cr on sales of ₹942 Cr shows operating traction
Concerns
- Weak ROE of 3.03% and ROCE of 3.95% suggest poor capital efficiency
- High P/E of 20.34 for a cyclical steel company with modest 5.66% sales growth
- Dividend yield of only 0.30% offers negligible income while waiting for value to unlock
- FairStock Score of 26/100 flags the stock as risky; wide 52-week range reflects volatility
AI Analysis
At first glance, Sunflag Iron looks like a value investor's dream: the stock trades at ₹291.49 against book value of ₹385.61, a 24% discount. But cheapness often comes with a reason. This is a commodity steel business, and my first test is always returns on capital. Sunflag earns an ROE of only 3.03% and an ROCE of 3.95%. Those are mediocre numbers, barely enough to compensate for risk, let alone create real wealth. A low-debt balance sheet is reassuring—debt/equity of just 0.07—and the Piotroski F-Score of 7/9 suggests the financial health is improving. The latest quarter sales of ₹942 Cr and net profit of ₹60 Cr are respectable, and profit growth of 32.83% sounds good, but sales growth is only 5.66%; steel earnings are volatile and margins can reverse. The 52-week range of ₹192.15 to ₹428.00 reminds me why I prefer predictable businesses. At a P/E of 20.34, the market is paying a fair multiple for earnings of a cyclical at a particular point in the cycle. With a dividend yield of only 0.30%, I am not being paid to wait. There is an asset cushion—book value is significant and debt is low—but an asset play only works if an owner can actually realize that value. For now, Sunflag appears cyclical, capital-intensive, and return-weak. I would wait for a better price and evidence of higher returns on capital before committing my money.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer