1. At a Glance
Sar Auto Products Ltd (SAPL) makes gears, gearboxes, and transmission components. On the side, it dabbles in real estate — because why not? With just ₹12.44 Cr TTM sales and ₹0.24 Cr PAT, the market still values it at ₹840 Cr. That’s a P/E of 3,500+, CMP at 48.6× book value. Even Rolex watches have a better price-to-function ratio.
2. Introduction
Founded in 1987, SAPL operates in the auto components niche, serving gear needs for transmissions, differentials, and engines. It has a respectable machine setup, including CNC & VMC systems, and a tool room for precision work.
The company is like a boutique artisanal gear workshop — only the price tag on the stock is designer-level. If Warren Buffett saw this valuation with these sales, he’d probably double-check if “Sar Auto” was actually making luxury electric helicopters.
3. Business Model (WTF Do They Even Do?)
- Auto Components Manufacturing: Spur gears, helical gears, bevel gears, sprockets, spline shafts, couplings, and power take-off clutches.
- Custom Machining: Up to 480 mm diameter, small-batch precision jobs.
- Tool Room: For jigs, fixtures, and tooling solutions.
- Real Estate Development: An odd “diversification” likely
- from spare land usage.
Target customers are OEMs and replacement markets, but scale is microscopic compared to listed peers.
4. Financials Overview
Fresh P/E Calc: Q1 FY26 EPS ₹0.25 × 4 = ₹1.00 → CMP ₹1,763 ÷ ₹1.00 = P/E ~1,763 (already absurd; TTM figure is 3,500 due to lower last year’s EPS).
| Metric | FY25 | YoY Growth |
|---|---|---|
| Revenue | ₹13.97 Cr | -30% |
| EBITDA | ₹1.86 Cr | -5% |
| PAT | ₹0.42 Cr | -64% |
| EPS | ₹0.88 | ↓ from ₹2.46 |
| ROE | 2.46% | Down |
| OPM | 13.31% | Up slightly |
Commentary: Margins are okay for a niche player, but absolute numbers are pocket change for a listed entity.
5. Valuation (Fair Value RANGE only)
| Method | Inputs | FV (₹) |
|---|---|---|
| P/E | Small-cap auto avg 25× EPS ₹1.00 | 25 |
| EV/EBITDA | EV ₹840 Cr / EBITDA ₹1.66 Cr → ~506×; sector avg 15× | 50 |
| DCF | 10% discount, 12% growth | 40–50 |
Fair Value Range: ₹25 – ₹50
Disclaimer: This FV range is for educational purposes only and is not investment advice.
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