Sterling Tools Limited (STERTOOLS) AI Stock Analysis

• Market Cap: ₹9.18B
• Dividend Yield: 0.87%
• Average Volume (3M): 8.83K
• Price to Earnings (P/E): 18.9
• Beta (1Y): 1.96
• Revenue Growth: -19.33%
• EPS Growth: -26.30%
• Country: IN
• Employees: 613
• Sector: Industrials
• Sector Strength: 72
• Industry: Manufacturing - Tools & Accessories
• EPS (TTM): 4.75
• Shares Outstanding: 36,184,320
• 10 Day Avg. Volume: 9,282
• 30 Day Avg. Volume: 8,827
• PEG Ratio: 3.85
• Price to Book (P/B): 2.34
• Price to Sales (P/S): 1.14
• P/FCF Ratio: 24.46
• 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: 62 Neutral
• Price Target: ₹242.00 ▼(-10.80% Downside)

Sterling Tools Limited's overall stock score is driven primarily by its strong financial performance, which indicates a solid foundation and growth potential. However, the technical analysis suggests bearish momentum, which poses a risk to short-term investors. The valuation is moderate, offering a balanced view of the stock's current market position. Investors should be cautious of the technical indicators while considering the company's robust financial health.

Positive Factors

Sustained revenue growth

Multi-year revenue growth to ~10.26bn by 2025 indicates durable demand and strong OEM relationships. This scale supports better utilization, bargaining power with suppliers, and deeper integration into customer supply chains, underpinning long-term competitive position and growth optionality.

Strong operating cash generation

Material improvement in operating cash flow to 1,235m demonstrates core business cash conversion strength. Reliable OCF supports capex, working capital needs, debt servicing and strategic investments, providing financial flexibility through industry cycles and enabling reinvestment without overreliance on external funding.

Improved equity and capital structure

Rising shareholders' equity and an improved equity ratio signal a stronger capital base. This enhances resilience to cyclical downturns, supports qualification for OEM contracts requiring financial stability, and gives room for measured leverage or investment without materially weakening balance sheet health.

Negative Factors

Rising debt-related risk

Noted increase in debt levels raises long-term financial flexibility concerns; higher leverage can amplify earnings volatility during vehicle production downturns and increase interest obligations. If managed poorly, this could constrain capex, slow deleveraging, and weaken supplier or customer confidence over multiple quarters.

Volatile free cash flow

Historic swings in free cash flow imply inconsistent post-investment cash conversion, driven by capex or working-capital cycles. Even with a positive 2025 FCF, variability reduces predictability for dividends, debt paydown or acquisitions and raises execution risk for sustainable returns across business cycles.

Declining EBITDA margins

A marked fall in EBITDA margin over several years signals rising operating cost pressure or lower underlying profitability. Sustained margin compression can erode cash generation and limit reinvestment capacity; the divergence versus improved EBIT margin also raises questions about margin quality and non‑operating or amortization impacts.

Sterling Tools Limited Business Overview & Revenue Model

Company Description

Sterling Tools Limited manufactures and markets high tensile cold forged fasteners to original equipment manufacturers in India. The company offers standard, special, chassis, and engine fasteners for use in passenger vehicles, commercial vehicles, two wheelers, farm and construction equipment, and off-roadways. It also engages in leasing of immovable property; and manufacture and trading of motor control unit used in automobile industry. The company exports its products to Europe, the United States, South America, and the Middle East. Sterling Tools Limited was incorporated in 1979 and is based in Faridabad, India.

How the Company Makes Money

STERTOOLS generates revenue through several key streams, including direct sales of its tools and fasteners to industrial clients, retailers, and distributors. The company also engages in online sales through its e-commerce platform, expanding its reach to a broader customer base. Additionally, STERTOOLS has established strategic partnerships with major retailers and wholesalers, enabling bulk sales and increasing market penetration. The company may also earn revenue from value-added services, such as custom tool manufacturing and repair services, which cater to specific customer needs. Overall, its focus on maintaining high-quality standards and customer satisfaction contributes significantly to its earnings.

Sterling Tools Limited Financial Statement Overview

Summary

Sterling Tools Limited exhibits strong financial health with significant revenue and profit growth, indicating a positive trajectory in the manufacturing sector. The balance sheet is robust, showcasing effective equity management and a manageable debt position, although caution is advised due to rising debt levels. Cash flow operations are solid, supporting net income effectively, though historical volatility in free cash flow suggests a need for continued focus on cash management.

Income Statement

Sterling Tools Limited has demonstrated strong revenue growth with a consistent upward trajectory, increasing from 3,482.8 million in 2021 to 10,262.995 million by 2025. The gross profit margin has remained healthy, improving from 50.3% in 2021 to approximately 50.1% in 2025. Net profit margin was stable, with a slight increase from 6.8% in 2021 to about 5.7% in 2025. The EBIT margin improved significantly from 10.5% in 2021 to 41.2% in 2025, showcasing enhanced operational efficiency. However, EBITDA margins dropped from 18.4% in 2021 to 10.7% in 2025, indicating increased operational expenses relative to EBITDA.

Balance Sheet

Improvements in the balance sheet are evident with an increase in stockholders' equity from 3,064.592 million in 2020 to 4,996.744 million in 2025. The debt-to-equity ratio decreased from 0.24 in 2020 to 0.31 in 2025, reflecting manageable leverage. The equity ratio improved, indicating a strong capital structure with equity as a larger component of total assets. Return on Equity (ROE) displayed stability, showing the company's effective use of equity to generate profits, with a slight drop from 9.9% in 2021 to 11.7% in 2025. However, the increasing debt level poses potential risks if not managed prudently.

Cash Flow

The cash flow statement reflects a robust operating cash flow, increasing from 158.218 million in 2021 to 1,235.3 million in 2025, indicative of strong cash generation from core operations. The free cash flow experienced fluctuations, with negative values in earlier years but reached 477.68 million in 2025, suggesting improved cash management. The operating cash flow to net income ratio remained healthy, ensuring that net income is backed by sufficient cash flow. However, the free cash flow to net income ratio indicates some volatility, reflecting capital expenditure impacts.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	9.37B	10.26B	9.32B	7.72B	5.07B	3.52B
Gross Profit	4.94B	5.14B	3.17B	1.15B	2.10B	1.75B
EBITDA	1.05B	1.10B	1.15B	1.04B	685.81M	641.54M
Net Income	488.74M	582.93M	553.65M	478.78M	255.37M	235.02M
Balance Sheet
Total Assets	0.00	7.91B	7.13B	6.57B	5.67B	5.16B
Cash, Cash Equivalents and Short-Term Investments	1.63B	1.63B	1.00B	570.96M	319.01M	448.59M
Total Debt	0.00	1.55B	1.18B	1.33B	1.26B	1.05B
Total Liabilities	-5.00B	2.91B	2.66B	2.56B	2.11B	1.85B
Stockholders Equity	5.00B	5.00B	4.47B	4.00B	3.56B	3.31B
Cash Flow
Free Cash Flow	0.00	477.68M	724.56M	296.51M	-269.69M	-16.71M
Operating Cash Flow	0.00	1.24B	1.02B	628.57M	248.23M	158.22M
Investing Cash Flow	0.00	-1.25B	-487.39M	-533.88M	-392.13M	-493.19M
Financing Cash Flow	0.00	944.00K	-328.89M	-56.91M	100.87M	229.41M

Sterling Tools Limited Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 271.30
• 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:STERTOOLS, the sentiment is Neutral. The current price of 271.3 is above the 20-day moving average (MA) of 249.24, above the 50-day MA of 265.15, and below the 200-day MA of 311.74, indicating a neutral trend. The MACD of -9.29 indicates Negative momentum. The RSI at 51.39 is Neutral, neither overbought nor oversold. The STOCH value of 58.39 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for IN:STERTOOLS.

Sterling Tools Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GNA	73 Outperform	₹15.46B	14.72	―	0.95%	-4.65%	9.95%
MMFL	72 Outperform	₹19.72B	20.64	―	1.07%	-4.47%	-17.62%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
STERTOOLS	62 Neutral	₹9.18B	18.87	―	0.87%	-19.33%	-26.30%
HITECHGEAR	60 Neutral	₹12.51B	43.72	―	0.74%	-17.86%	-49.46%

Sterling Tools Limited Corporate Events

Sterling Tools Limited Schedules Earnings Conference Call for Q2 & H1FY26

Sterling Tools Limited has announced an upcoming earnings conference call scheduled for November 12, 2025, to discuss its financial and operational performance for the quarter and half-year ending September 30, 2025. This call aims to engage with investors and analysts, potentially impacting the company’s market positioning and providing insights into its operational strategies.