Sterling Tools Limited (STERTOOLS) AI Stock Analysis

• Market Cap: ₹8.27B
• Dividend Yield: 0.87%
• Average Volume (3M): 8.83K
• Price to Earnings (P/E): 22.6
• 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): 0.43
• 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: 70 Outperform
• Price Target: ₹284.00 ▲(4.68% Upside)
• Action: Upgraded Date: 02/04/26
• Date: Action: Upgraded 02/04/26

The score is primarily driven by strong financial performance (notably revenue growth and improved operating efficiency), tempered by a mixed technical picture (below key longer-term moving averages with negative MACD) and a moderate valuation with a modest dividend yield.

Positive Factors

Strong Revenue Growth

Sustained multi-year revenue expansion more than doubles scale, indicating durable demand and successful customer qualification in OEM supply chains. Larger revenue base supports fixed-cost absorption, long-term supplier leverage, and provides capacity to invest in productivity and product diversification.

Improved EBIT Margin

A large, sustained rise in EBIT margin points to structural operational improvements and stronger pricing or mix enhancements. Higher operating profitability increases cash conversion potential and gives management room for strategic investments, debt service, and resilience through industry cycles.

Stronger Operating Cash Flow

Marked improvement in operating cash generation indicates core earnings are being converted into cash reliably. This durable cash flow strengthens funding for capex, working capital, and deleveraging, reducing reliance on external financing and supporting long-term financial flexibility.

Negative Factors

EBITDA Margin Compression

Declining EBITDA margins suggest rising operating costs, adverse mix, or lower contribution from certain product lines despite higher EBIT, signaling margin pressure at an intermediate profitability layer. Persistent EBITDA compression can limit free cash flow and constrain reinvestment capacity.

Volatile Free Cash Flow

Historical swings in free cash flow reduce predictability for dividends, buybacks or sustained capex. Even with a 2025 improvement, volatility implies sensitivity to working capital and capex timing, increasing execution risk for long-term projects and financial planning.

Exposure to Automotive OEM Cyclicality

High concentration of sales to automotive OEMs creates structural cyclicality risk; downturns in vehicle production or OEM sourcing shifts can cause sharp demand swings. Dependence on OEM qualification and volume contracts can also constrain pricing flexibility and margin stability.

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

Strong fundamentals supported by rapid revenue growth (2021–2025) and meaningful EBIT margin expansion, with a healthier equity base. Offsetting factors include EBITDA margin compression and historically volatile free cash flow despite improvement in 2025.

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	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 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: Negative
• 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 Negative. The current price of 271.3 is above the 20-day moving average (MA) of 236.38, above the 50-day MA of 250.59, and below the 200-day MA of 305.11, indicating a bearish trend. The MACD of -5.77 indicates Negative momentum. The RSI at 43.20 is Neutral, neither overbought nor oversold. The STOCH value of 41.19 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IN:STERTOOLS.

Sterling Tools Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MMFL	72 Outperform	₹22.23B	26.45	―	1.07%	-4.47%	-17.62%
GNA	72 Outperform	₹17.96B	15.95	―	0.95%	-4.65%	9.95%
STERTOOLS	70 Outperform	₹8.27B	22.65	―	0.87%	-19.33%	-26.30%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
HITECHGEAR	60 Neutral	₹11.75B	54.72	―	0.74%	-17.86%	-49.46%

Sterling Tools Limited Corporate Events

Sterling Tools Publishes Q3 FY26 Financials in National Dailies

Sterling Tools notified exchanges that its board-approved unaudited results for the third quarter and nine months ended 31 December 2025 have been published in national dailies, fulfilling disclosure duties under SEBI regulations. By circulating the approved figures via Financial Express and Jansatta on 4 February 2026, the fastener maker underscores compliance transparency, signaling orderly governance ahead of any deeper scrutiny of recent operational performance.