1. At a Glance
India’s only API-certified thread gauge manufacturer, Sizemasters Technology Ltd (STML), has gone from zero to hero in under 5 years. With exploding profit growth (400%+ CAGR in 3 years), improving working capital cycles, and a niche monopoly—this microcap is quietly threading its way into the big leagues.
2. Introduction with Hook
Imagine if vernier calipers had a rockstar cousin—precision gauges that oil rigs and aerospace firms can’t function without. Now imagine one tiny Indian company not just making them, but getting ISO 9001 & NABL stamped while doing it.
- Fact #1: 3-year profit CAGR = 408%
- Fact #2: Cash conversion cycle has dropped from 5,000+ days to just 80.
- Translation: From “dead inventory museum” to a legit working capital machine.
3. Business Model (WTF Do They Even Do?)
Sizemasters is not a zinc miner (despite its old name, Mewat Zinc). It’s a precision engineering company making:
- Thread gauges, dial gauges, and fixtures used in oil & gas, aerospace, defense, and manufacturing.
- It’s the first Indian company to bag API Certification and NABL accreditation in this space.
- It operates a B2B model: makes the gauges, tests them with its electronic systems, and ships them to Indian and international clients.
Translation: It’s the Measuring Stick of the Machines.
4. Financials Overview
Sizemasters went from Rs. 0.6 Cr sales in FY22 to Rs. 14.2 Cr in FY25. The operating profit? Jumped from Rs. 0.03 Cr to Rs. 2.92 Cr.
Key trends:
- 3Y Sales CAGR: 156%
- 3Y PAT CAGR: 408%
- FY25 OPM: 20.6%
- ROCE: 22.4%
- ROE: 19.5%
But wait, the cherry? FY25 EPS = Rs. 2.62 vs. just Rs. 0.05 in FY21. That’s not compounding. That’s rocket fuel.
5. Valuation
Let’s apply some real-life goggles:
| Method | Estimated FV Range |
|---|---|
| DCF (Aggressive) | ₹180–₹220 |
| EV/EBITDA (25x on FY25 EBITDA) | ₹165–₹195 |
| P/E (Fair 30x on FY25 EPS ₹2.62) | ₹135–₹160 |
Current Price: ₹138
Conclusion: The stock is priced near its base fair value—but upside could ignite if institutional buyers enter this niche moat.
6. What’s Cooking – News, Triggers, Drama
- FY25 Preferential Issue: Rs. 6 crore raised, cleanly deployed—no shady deviation.
- Re-submitted results in June 2025 after “auditor polish”—suggests improved compliance.
- Inventory Days now 225 (down from 5,000+ in FY23!)
- Working Capital cycle down to 91 days from 1800+
And the biggest trigger? One fat defense/PSU/ONGC order. It hasn’t happened yet—but that’s your lottery ticket.
7. Balance Sheet
| Item | FY25 |
|---|---|
| Equity Capital | ₹10 Cr |
| Reserves | ₹4.7 Cr |
| Total Borrowings | ₹2 Cr |
| Fixed Assets | ₹0.3 Cr |
| Total Assets | ₹22 Cr |
| Net Worth | ₹14.7 Cr |
| Debt/Equity | 0.14x |
Verdict: Clean balance sheet. Minimal debt. Ready to scale without financial angioplasty.
8. Cash Flow – Sab Number Game Hai
| Year | CFO | CFI | CFF | Net Flow |
|---|---|---|---|---|
| FY23 | ₹0.35 Cr | -₹6.08 Cr | ₹6.28 Cr | ₹0.54 Cr |
| FY24 | ₹0.85 Cr | -₹1.87 Cr | ₹1.98 Cr | ₹0.95 Cr |
| FY25 | ₹3.19 Cr | -₹1.85 Cr | -₹0.42 Cr | ₹0.93 Cr |
Despite investing cash (equipment, tech), operating flows are growing fast. Company is internally funding its expansion—not burning investor cash.
9. Ratios – Sexy or Stressy?
| Ratio | FY25 |
|---|---|
| ROCE | 22.4% |
| ROE | 19.5% |
| Debtor Days | 96 |
| Inventory Days | 225 |
| CCC | 80 Days |
| Asset Turnover | 0.64x |
| Interest Coverage | 15x |
Narrative Shift: Once a working capital mess, now a lean machine. ROE approaching elite territory for a manufacturer.
10. P&L Breakdown – Show Me the Money
| Year | Sales | OPM | PAT | EPS |
|---|---|---|---|---|
| FY23 | ₹0.68 Cr | 8.8% | ₹0.12 Cr | ₹0.12 |
| FY24 | ₹10.9 Cr | 23.4% | ₹2.33 Cr | ₹2.33 |
| FY25 | ₹14.2 Cr | 20.6% | ₹2.62 Cr | ₹2.62 |
That 20%+ margin is rare in the tool and gauges sector. Pricing power or niche monopoly? Possibly both.
11. Peer Comparison
| Company | P/E | ROE | OPM | Sales FY25 | CMP/BV |
|---|---|---|---|---|---|
| Hindustan Zinc | 17.3 | 72.5% | 51% | ₹34,000 Cr | 13.5x |
| Sizemasters | 52.7 | 19.5% | 20.6% | ₹14.2 Cr | 9.4x |
Okay, not apples to apples. But there are no real listed peers in the gauge + API-certified niche. This monopoly has no playmates.
12. Miscellaneous – Shareholding, Promoters
- Promoter Holding: 64.86% (unchanged)
- Public Holding: 35.14%
- No. of Shareholders: 2,107 (up from 1,889 in FY22)
- FII Holding: Zero (for now)
- Dividend History: None (don’t hold your breath)
If one small-cap fund buys 0.5%, this stock will run like it saw a ghost.
13. EduInvesting Verdict™
Sizemasters isn’t a household name. But in the world of gauges and tolerances, it’s the dude with the clipboard telling global OEMs whether their part passes QA.
From a sleepy zombie company with a Rs. 0.6 Cr top line to a margin-rich, cash-flow-positive, API-certified growthster—this one’s a classic “microcap turnaround” story. Just don’t expect liquidity or dividends. This is manufacturing private equity with a BSE listing.
Metadata
– Written by EduInvesting | July 14, 2025
– Tags: Gauges, Oil & Gas, Microcap, Turnaround, Monopolies, Small Cap Engineering, API Certified, India Manufacturing
