Salzer Electronics Limited (SALZERELEC) AI Stock Analysis

• Market Cap: ₹9.99B
• Dividend Yield: 0.36%
• Average Volume (3M): 42.24K
• Price to Earnings (P/E): 17.9
• Beta (1Y): 1.58
• Revenue Growth: 21.51%
• EPS Growth: -17.75%
• Country: IN
• Employees: 749
• Sector: Industrials
• Sector Strength: 72
• Industry: Electrical Equipment & Parts
• EPS (TTM): 7.35
• Shares Outstanding: 17,682,737
• 10 Day Avg. Volume: 116,994
• 30 Day Avg. Volume: 42,240
• PEG Ratio: 5.75
• Price to Book (P/B): 2.57
• Price to Sales (P/S): 0.98
• P/FCF Ratio: -17.32
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 61 Neutral
• Price Target: ₹596.00 ▼(-11.80% Downside)

Salzer Electronics Limited shows strong revenue growth and profitability, but faces significant challenges in cash flow management, which could impact financial stability. The technical indicators suggest bearish momentum, and the valuation is moderate with a low dividend yield. These factors combined result in a cautious outlook for the stock.

Positive Factors

Revenue Growth

Sustained ~21.5% revenue growth indicates durable demand across OEM, project and aftermarket channels for Salzer’s electrical components. Over 2-6 months this supports scale economies, stronger bargaining with suppliers, and underpins reinvestment in capacity and product development.

Margin Expansion

A marked gross margin improvement reflects better cost management or pricing power in core switchgear products. Sustained higher gross margins provide a structural buffer against input cost volatility and allow reinvestment in R&D, channel support, and incremental profitability over the medium term.

Manageable Capital Structure

Moderate leverage and a ~46% equity ratio indicate a stable capital structure that can support working capital and project financing without immediate solvency stress. This provides financial flexibility for strategic investments if revenue momentum continues.

Negative Factors

Free Cash Flow Deterioration

Sharp negative free cash flow signals structural liquidity pressure that can limit capital expenditures, R&D and working capital funding. Persistent FCF deficits over months increase reliance on external financing, raising interest costs and constraining long-term growth optionality.

Operating Cash Conversion Weakness

Negative operating cash conversion shows earnings are not translating into cash, likely from working capital build or receivable concentration. This undermines the sustainability of reported profits and creates ongoing funding needs that can pressure margins and credit metrics.

Low Net Profit Margin

A thin ~3.2% net margin despite strong revenue growth suggests limited downstream capture of value or higher operating/financial costs. Over time, low net margins restrict internal cash generation and reduce the company’s ability to self-fund growth or absorb downside industry cycles.

Salzer Electronics Limited Business Overview & Revenue Model

Company Description

Salzer Electronics Limited manufactures and supplies CAM operated rotary switches, selector switches, wiring ducts, voltmeter switches, and allied products primarily in India. The company offers industrial components, including cable ducts; changeover switches and solar isolators; general purpose relays; load break and photovoltaic isolators; and changeovers; relays; sensors; limit and foot switches; terminal connectors; customized control panels; and industrial plug and sockets. It also provides toroidal transformers, CT's and rogowski coils, inductors, chokes, filters, and three phase dry type transformers; building segment products, including automatic source changeover with current limiter, distribution boards, miniature circuit breakers, modular switches and speciality, movement sensors, remote switches, single phase motor starters, and house wires; industrial wires and cables, busbars and wire harness, enamelled copper wire, bunched copper conductors, tinned copper wires, and lan cables; motor control products, which include contractors and overload relays, motor protection circuit breaker, and miniature circuit breakers; and energy savers and panels, and street light controllers, as well as angle and batten holders, and wire duct cutters. Salzer Electronics Limited also exports its products. The company was incorporated in 1985 and is based in Coimbatore, India.

How the Company Makes Money

Salzer Electronics generates revenue through multiple streams primarily by selling its electronic products and solutions to various industries. Key revenue streams include the sale of electrical switchgear, automation equipment, and control systems, which cater to sectors such as manufacturing, energy, and construction. The company also benefits from long-term contracts and partnerships with major industrial players, providing consistent income from recurring orders and service agreements. Additionally, Salzer Electronics invests in research and development to innovate and expand its product offerings, which helps capture new market segments and boosts its revenue potential.

Salzer Electronics Limited Financial Statement Overview

Summary

Salzer Electronics Limited demonstrates robust revenue growth and improved profitability margins, reflecting effective business operations. However, the company faces challenges in cash flow management, which could pose risks to its financial stability if not addressed. The balance sheet remains stable, but increasing leverage needs careful monitoring to prevent financial strain.

Income Statement

Salzer Electronics Limited shows strong revenue growth and improving profitability. The gross profit margin increased to 25.4% in 2025 from 12.6% in 2024, indicating enhanced cost management. The net profit margin remained stable at 3.2% despite a significant rise in total revenue, reflecting consistent profitability. However, the decline in EBITDA margin from 10.2% in 2024 to 9.8% in 2025 suggests some operational efficiency challenges.

Balance Sheet

The company's balance sheet exhibits moderate leverage with a debt-to-equity ratio of 0.77, indicating manageable debt levels. The equity ratio of 46.2% reflects a stable capital structure. Return on Equity (ROE) improved to 8.5% in 2025 from 9.7% in 2024, suggesting efficient use of equity. However, the increase in total debt raises potential risk if revenue growth does not continue to outpace debt growth.

Cash Flow

Cash flow management remains a challenge for Salzer Electronics Limited. The free cash flow has been negative, with a decline from -231.8 million in 2024 to -809.6 million in 2025, indicating potential liquidity constraints. The operating cash flow to net income ratio turned negative in 2025, which could impact future investments and debt servicing capabilities. The company needs to improve cash flow efficiency to support its growth trajectory.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	15.05B	14.24B	11.64B	10.37B	8.01B	6.21B
Gross Profit	3.83B	3.62B	1.47B	2.23B	1.66B	1.36B
EBITDA	1.63B	1.39B	1.19B	976.18M	615.49M	566.82M
Net Income	695.30M	460.31M	458.75M	387.05M	225.93M	205.17M
Balance Sheet
Total Assets	0.00	11.80B	9.93B	8.95B	7.52B	6.85B
Cash, Cash Equivalents and Short-Term Investments	180.58M	180.58M	182.78M	170.31M	103.34M	134.48M
Total Debt	0.00	4.22B	3.12B	2.82B	2.52B	2.04B
Total Liabilities	-5.53B	6.27B	5.13B	4.82B	3.94B	3.48B
Stockholders Equity	5.53B	5.45B	4.73B	4.08B	3.54B	3.32B
Cash Flow
Free Cash Flow	0.00	-809.62M	-231.82M	-151.33M	-317.92M	-47.84M
Operating Cash Flow	0.00	-112.86M	237.69M	226.73M	-122.37M	137.76M
Investing Cash Flow	0.00	-789.56M	-420.23M	-348.52M	-160.82M	-160.45M
Financing Cash Flow	0.00	905.09M	174.20M	178.22M	261.31M	44.10M

Salzer Electronics Limited Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 675.70
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IN:SALZERELEC, the sentiment is Negative. The current price of 675.7 is above the 20-day moving average (MA) of 595.26, above the 50-day MA of 659.13, and below the 200-day MA of 820.49, indicating a bearish trend. The MACD of -34.43 indicates Negative momentum. The RSI at 32.47 is Neutral, neither overbought nor oversold. The STOCH value of 40.13 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IN:SALZERELEC.

Salzer Electronics Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
INDOTECH	68 Neutral	₹14.13B	15.71	―	―	34.48%	40.61%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
SALZERELEC	61 Neutral	₹9.99B	17.93	―	0.36%	21.51%	-17.75%
WENDT	59 Neutral	₹13.98B	62.55	―	0.62%	―	―
INDNIPPON	58 Neutral	₹15.90B	17.79	―	1.57%	22.67%	24.50%
HIRECT	58 Neutral	₹21.52B	45.26	―	0.13%	35.05%	99.65%
WHEELS	58 Neutral	₹18.59B	13.75	―	1.34%	2.22%	29.00%