Sunita Tools Ltd Q2FY26 – When CNC Meets Defence Dreams and Artillery Shells Start Flying
1. At a Glance
Welcome to the tale of Sunita Tools Ltd (BSE: 544001) — the Palghar-based mould base maestro that’s suddenly moonlighting as a defence contractor. The company that once polished steel plates is now polishing its artillery ambitions. With a market cap of ₹540 crore, stock price of ₹860, and a P/E ratio of 114, Sunita Tools is the classic smallcap thriller — engineering sweat, ambition, and a sprinkle of Bollywood drama.
The Q2FY26 numbers were, let’s say, not exactly “Dhoom 3” level of performance — Revenue ₹15.26 crore (flat QoQ), PAT ₹3.04 crore (down 10.8%), and OPM 28.1%, which is decent considering the industry slowdown. The company maintains an ROCE of 16.7% and ROE of 13.3%, respectable for a business where machines work harder than HR.
And while the rest of the world is worrying about slowing demand, STL is renting a second factory in Faridabad to produce artillery shells, acquiring companies left and right, and planning to raise capital like there’s a war coming (spoiler: they might be the ones making the shells for it).
2. Introduction
Once upon a time, in the peaceful lanes of Palghar, Sunita Tools quietly built mould bases for industries like automotive, pharma, and consumer goods. Fast forward to FY25–26, and suddenly they’re building defence-grade artillery shells and aerospace components. That’s not diversification — that’s reincarnation.
The company’s evolution from a precision engineering firm into a defence powerhouse is both ambitious and hilarious in equal measure. One day they’re making moulds for bottle caps, the next they’re talking about fighter jet cockpit frames. Either someone in strategy watched too much “Uri: The Surgical Strike”, or the Pandey family just decided to join the Make in India defence race with full throttle.
Over the past year, STL has made some pretty serious moves:
Acquiring 51% in Avisan Group (FY25 combined sales ₹6.27 crore, orderbook ₹20.53 crore).
Investing ₹126 crore to triple its artillery shell capacity.
Tying up with Hyprix Aviation for fuse technology (because of course, what’s a shell without a fuse?).
Receiving a ₹200–300 crore LOI from a NATO country for 100,000 shells — deliveries to begin Q3FY26.
If there was ever an SME stock that turned from boring to ballistic, it’s Sunita Tools.
3. Business Model – WTF Do They Even Do?
At its core, STL is a manufacturing and machining business. They specialize in mould bases, die sets, and CNC machined components. Their precision machining facility in Palghar operates both CNC and conventional machines with sizes ranging from 500×800 mm to 4000×2000 mm — basically, they can cut, grind, and polish anything from a pen cap mould to a missile launcher frame.
Their products are divided into three verticals:
Mould Base Division:
Custom and standard mould bases for plastics, die casting, and caps & closures.
Serves clients like Hero, Mahindra, LG, and TVS — the who’s who of Indian manufacturing.
CNC Machining Division:
Handles precision machining, pocket machining, and finishing work for industrial clients.
Aerospace & Defence Division:
Operated through subsidiaries Sunita Leoquip Aerospace Pvt Ltd and Sunita Imperial Aerospace Pvt Ltd, both focused on high-precision parts for aircrafts, missiles, and defence pumps.
Oh, and now they’re also planning a Faridabad artillery plant, because why not?
In short, STL is doing the heavy lifting for India’s industrial backbone while sneaking into the elite club of defence manufacturers.
4. Financials Overview
Source table
Metric
Sep FY26
Sep FY25
Jun FY26
YoY %
QoQ %
Revenue (₹ Cr)
15.26
15.33
14.29
-0.46%
+6.8%
EBITDA (₹ Cr)
4.29
4.23
3.52
+1.4%
+21.8%
PAT (₹ Cr)
3.04
3.41
1.68
-10.8%
+80.9%
EPS (₹)
4.98
5.58
2.75
-10.8%
+81.1%
Despite the YoY drop, STL managed a decent rebound QoQ. But let’s be honest — a P/E of 114 for a ₹15 crore quarterly revenue company is basically saying: “We don’t care about profits, we believe in vibes.”
5. Valuation Discussion – The Fair Value Range
Let’s attempt to bring sanity to this artillery frenzy.
Method 1: P/E-Based Approach
Industry P/E (Industrial Manufacturing): 34.3x Company EPS (TTM): ₹7.73 → Theoretical Value: ₹7.73 × 34.3 = ₹265
At CMP ₹860, STL trades at 3.2x the industry average. The stock clearly thinks it’s Kaynes Technology with cannons.
