At a Glance:
Shivagrico Implements Ltd, an old-school forge-and-roll manufacturer of agricultural tools, has managed to stay profitable for over a decade—without any blockbuster growth or investor excitement. With a ₹13.8 Cr market cap and a product catalogue longer than a JEE syllabus, the stock trades at ₹27.5 and boasts a humble P/E of 36x. Is this a hidden gem in the junkyard or just another illiquid relic? Let’s hammer it out.
1. 🧲 WTF Do They Even Do?
Shivagrico has been hammering metal since 1965. And no, that’s not a metaphor.
- They forge and roll steel to produce:
- Agricultural hand tools: pickaxes, hoes, crowbars, hammers, mattocks, wedges
- Re-rolled steel products: flats, angles, rounds, squares, polygons
- These are sold under brand names “Lion” and “Chetak”
- Primary customers? Hardware distributors, agri retailers, rural India, and possibly your dadi’s toolbox
It’s a completely commoditized B2B game where product differentiation is close to zero. Your only edge? Consistency, durability, and low pricing.
2. 💰 Financials – Profitable? Yes. Scalable? Meh.
| Metric | FY25 | FY24 | FY23 |
|---|---|---|---|
| Sales | ₹43.5 Cr | ₹43.2 Cr | ₹41.5 Cr |
| Operating Profit | ₹3.27 Cr | ₹2.23 Cr | ₹2.15 Cr |
| Net Profit | ₹0.38 Cr | ₹0.07 Cr | ₹0.10 Cr |
| OPM | 7.5% | 5.2% | 5.1% |
| ROCE | 6.4% | 4.9% | 4.3% |
🎯 What stands out:
- Margins are slowly improving, thanks to cost control
- Net profit jumped 5x in FY25 — from ₹7 lakh to ₹38 lakh
- But topline growth is stagnant AF. Sales have hovered between ₹41–44 Cr for 3 years
🧨 Revenue from “other income” is zero. So this is a pure operations game.
3. 💸 Valuation – Junkyard or Hidden Jewel?
- P/E: 36.2x → Too high for a low-growth, low-ROE, small-cap manufacturer
- Book Value: ₹15.7 → P/B = 1.75x
- ROE (TTM): 5%
- Market Cap: ₹13.8 Cr
🔍 Let’s try a basic Fair Value (FV) estimate:
Assume:
- Normalized EPS ~ ₹0.75 (last year EPS)
- Conservative P/E = 15x (for cyclical industrials with low growth)
- FV = ₹0.75 * 15 = ₹11.25
EduFair Value Range: ₹11 – ₹15
(Current Price ₹27.5 = 🟥 OVERVALUED)
4. 🔥 What’s Cooking? Any Triggers?
- Promoter holding has inched up slightly: from 61.62% to 62.02%
- No capex. No JV. No new product buzz.
- Appointed A.D. Parekh & Associates as secretarial auditor for 5 years — not exactly breaking news.
📢 Latest Filing: FY25 result announced, net profit up 5x. But given absolute scale, that’s like saying your lemonade stall made ₹100 more this year.
5. 🧾 Balance Sheet – How Much Debt, How Many Dreams?
| Metric | FY25 |
|---|---|
| Debt | ₹15.8 Cr |
| Reserves | ₹2.86 Cr |
| Fixed Assets | ₹10.04 Cr |
| Cash | Practically NIL |
💥 Interest cost = ₹1.23 Cr vs. PBT = ₹0.39 Cr
That’s a red flag. Interest eats majority of pre-tax profits.
6. 🔁 Cash Flow – Sab Number Game Hai
- FY25 Cash Flow from Operations = ₹3.84 Cr ✅
- But CF from Investing and Financing shows outflow due to debt repayments
- Net cash = -₹1.41 Cr → liquidity is tight
- Free cash flow is barely positive, which is a blessing for this size
7. 📊 Ratios – Sexy or Stressy?
| Ratio | FY25 |
|---|---|
| ROCE | 6.44% |
| ROE | 4.98% |
| OPM | 7.5% |
| Debtor Days | 22 |
| Inventory Days | 172 |
| CCC | 183 Days ❌ |
👎 Working capital cycle is bloated
👎 Return ratios are below cost of capital
👍 But hey, at least they’re positive now!
8. 📈 P&L Breakdown – Show Me the Money
Out of ₹43.5 Cr sales:
- EBITDA: ₹3.27 Cr
- Interest: ₹1.23 Cr
- Depreciation: ₹1.65 Cr
- PBT: ₹0.39 Cr
- PAT: ₹0.38 Cr
So essentially, they grind ₹43 Cr in top line to extract ₹38 lakh. That’s a margin of 0.87%. 🤕
9. ⚔️ Peer Comparison – Everyone Else is Richer
| Company | P/E | ROE | OPM |
|---|---|---|---|
| Shivagrico | 36x | 5% | 7.5% |
| Tega Inds | 52x | 15.5% | 20.7% |
| Jyoti CNC | 72x | 21% | 27% |
| Syrma SGS | 63x | 10% | 8.5% |
| Honeywell | 69x | 13.7% | 14% |
Shivagrico is trading like a tech company, but performing like a thresher blade in retirement. 🧓
10. 🧾 Shareholding – Who Believes in This?
- Promoters: 62.02% ✅ (steady increase)
- DII: 0.87%
- Public: 37.10%
- Shareholders: ~2,600
🧐 Illiquid stock. Low float. One bad day and the price moves 15%.
11. ⚠️ Miscellaneous – Any Gossip?
- Company is SEBI Reg 24A exempted due to net worth < ₹10 Cr
- No dividend in history despite being profitable since 2014
- Not much capex in last 5 years — fixed asset base stagnant
12. 🧠 EduInvesting Verdict™
🧹 This is a classic microcap steel tools company — consistent, profitable, boring.
But not scalable, and definitely not worth 36x P/E.
It survives, it crawls, it grinds out ₹30–40 lakh a year. The valuation, however, is ahead of reality.
Unless there’s a turnaround, delisting, or takeover event, Shivagrico is better left for those who enjoy collecting obscure BSE stocks like they’re Pokémon cards.
🟨 Fair Value Range: ₹11 – ₹15
🟥 Current Price: ₹27.5 (Overvalued)
✍️ Written by Prashant | 📅 July 3, 2025
Tags: Shivagrico Implements, Steel Tools Stocks, Microcap India, Smallcap Analysis, EduInvesting, Value Trap, Agriculture Tools, Forging Stocks
