Is Sundram Fasteners Limited a Sound Investment for the Long Term?
Sundram Fasteners Limited has demonstrated remarkable resilience in the face of market volatility. Founded in 1962 under the name Kasjax Engineering Ancillaries Pvt. Ltd., the company has carved a distinguished niche in the manufacturing of high tensile fasteners and automotive powder metal parts. As a member of the renowned TVS Group, Sundram Fasteners Limited has amassed a formidable reputation and is set to achieve substantial growth in the near future.
Company Profile: A Detailed Overview
Sundram Fasteners Limited's journey began on December 10, 1962, in Chennai. The company evolved from a small private limited enterprise to a prominent player in the fastener market. In 1965, the company's name was officially changed to Sundram Fasteners P Ltd. Over the years, Sundram Fasteners Limited has expanded its product range to include cold formed/extruded parts for both auto and non-auto applications, underscoring its diverse offerings and capabilities.
Management and Leadership
The leadership of Sundram Fasteners Limited is led by Suresh Krishna, the Chairman and Managing Director. Suresh Krishna is a notable figure in the industry due to his lineage as the grandson of the founder of the TVS Group and the eldest son of its former chairman, late Sri T S Krishna. Suresh Krishna's expertise and vision are undoubtedly instrumental in the company's sustained growth and strategic initiatives.
Financial Performance and Growth
Sundram Fasteners Limited has been marked by impressive financial performance and strategic maneuvers. Notably, the company's ability to reduce debt has been a testament to its financial discipline and management. Data shows that the company reduced its debt from a considerable 643 crore in 2013 to 554 crore by 2017, while simultaneously experiencing a significant growth in net worth and return on equity (ROE).
The reduction in debt is a positive indicator of the company's financial health and its capacity to manage its liabilities effectively. This improvement in debt levels coupled with the increases in networth and ROE showcases the robustness of the company's financial strategy and its commitment to sustainable growth.
Investment Perspective and Opportunities
Based on mutual fund holdings and personal insight into the company, Sundram Fasteners Limited stands out as a strong investment proposition, particularly for a long-term view. The quality of management and recent acquisitions have been instrumental in driving positive investor sentiment.
For prospective investors, it is advised to purchase shares at dips or during average market conditions. This approach can help mitigate risks associated with short-term market fluctuations. Long-term investment provides a more stable and predictable path to wealth creation, aligning with the strategic goals of the company and benefiting both individual and institutional investors.
Investing in Sundram Fasteners Limited offers the dual benefit of contributing to the growth and success of a prominent industry player, while simultaneously creating sustainable wealth.