1. At a Glance
India’s largest clock manufacturer—Sonam Ltd has ticked into 25+ countries with 1,400+ clock designs. But with flat profit growth and promoters selling down, is this a timely bet or just ornamental wall-hanging for your portfolio?
2. Introduction with Hook
If time is money, then Sonam Ltd is literally in the business of manufacturing money metaphors. But behind every cute clock dial lies a story of sluggish sales, stubborn margins, and a 3x P/B valuation that’s ticking louder than Big Ben during Brexit.
- Market Cap: ₹206 Cr
- FY25 Net Profit: ₹6 Cr
- FY25 Revenue: ₹104 Cr
- 1-Year Price Return: +36%
But with OPM shrinking to 6.75% in Q1 FY26, the party might be winding down.
3. Business Model (WTF Do They Even Do?)
Sonam Ltd manufactures:
- Wall Clocks
- Table Clocks
- LED Digital Clocks
- Clock Movements
- Customized Corporate Gifts
Retail Reach:
- 150+ Distributors
- 35,000+ Retailers
- 25+ export markets
Core is B2B/B2C hybrid: sells to businesses for gifting and to consumers for their homes.
4. Financials Overview
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue (Cr) | ₹83 | ₹88 | ₹104 |
| Net Profit (Cr) | ₹4 | ₹6 | ₹6 |
| OPM (%) | 11% | 14% | 12% |
| EPS (Rs) | ₹1.00 | ₹1.38 | ₹1.58 |
TTM Sales Growth: 28%
TTM PAT Growth: 9%
So yes, the clock is ticking—just in slow motion.
5. Valuation
| Metric | Value |
|---|---|
| CMP | ₹51.5 |
| P/E | 31.8 |
| Book Value | ₹15.7 |
| P/B | 3.27 |
Fair Value Estimation
| Method | FV Range |
|---|---|
| DCF | ₹38–₹47 |
| P/E Multiple (20x) | ₹32–₹40 |
| Peer Avg Valuation | ₹42–₹50 |
EduFair™ Valuation Range: ₹38–₹45
(Current price: slightly overheated popcorn in the microwave)
6. What’s Cooking – News, Triggers, Drama
- Q1 FY26 PAT down to ₹1.32 Cr from ₹2.12 Cr
- Operating margin halved YoY in Q1
- Promoter holding dropped from 74% → 55% in 2 years
- No dividend since FY19
- New AGM on Aug 12 with potential board reshuffle
- Export push & LED clock segment expansion underway
7. Balance Sheet
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Equity Capital | ₹20 Cr | ₹20 Cr | ₹20 Cr |
| Reserves | ₹32 Cr | ₹37 Cr | ₹43 Cr |
| Borrowings | ₹26 Cr | ₹22 Cr | ₹18 Cr |
| Total Assets | ₹86 Cr | ₹86 Cr | ₹98 Cr |
Key Points:
- Debt has reduced gradually
- Net worth improved
- Asset base inching up with LED clock investment
8. Cash Flow – Sab Number Game Hai
| Type | FY23 | FY24 | FY25 |
|---|---|---|---|
| CFO | ₹8 Cr | ₹7 Cr | ₹10 Cr |
| CFI | ₹-2 Cr | ₹-1 Cr | ₹-4 Cr |
| CFF | ₹-7 Cr | ₹-6 Cr | ₹-6 Cr |
Observations:
- Free cash flow positive
- Consistent reinvestment in machinery and LED segment
- No dividends, despite positive cash flows
9. Ratios – Sexy or Stressy?
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROCE | 9% | 13% | 13% |
| ROE | 10% | 11% | 11% |
| OPM | 11% | 14% | 12% |
| Working Capital Days | 124 | 132 | 123 |
Verdict:
Not exactly sexy. More like “reliable uncle in a kurta-pyjama who never forgets your birthday”.
10. P&L Breakdown – Show Me the Money
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | ₹83 Cr | ₹88 Cr | ₹104 Cr |
| Op. Expenses | ₹74 Cr | ₹75 Cr | ₹92 Cr |
| EBITDA | ₹9 Cr | ₹12 Cr | ₹12 Cr |
| PAT | ₹4 Cr | ₹6 Cr | ₹6 Cr |
Conclusion:
Decent growth but flat profits = wall clock business model is not a gold mine, just a functioning machine.
11. Peer Comparison
| Company | CMP | P/E | ROCE | ROE | OPM | Sales (TTM) | PAT (TTM) |
|---|---|---|---|---|---|---|---|
| Dixon | ₹15,900 | 124x | 39.8% | 32.9% | 3.9% | ₹38,860 Cr | ₹774 Cr |
| Cellecor | ₹35.7 | 25x | 24.2% | 25.1% | 5.3% | ₹1,026 Cr | ₹30 Cr |
| Focus Lighting | ₹104 | 46x | 14% | 11.2% | 14.2% | ₹183 Cr | ₹15 Cr |
| Sonam Ltd | ₹51.5 | 31.8x | 13.4% | 10.6% | 10% | ₹119 Cr | ₹6 Cr |
Verdict:
Smallest in class, niche product, moderate efficiency, but miles behind in profitability and scale.
12. Miscellaneous – Shareholding, Promoters
| Category | Mar 2023 | Mar 2024 | Mar 2025 |
|---|---|---|---|
| Promoter | 73.3% | 54.3% | 55.2% |
| Public | 26.7% | 45.5% | 44.4% |
| FIIs | 0% | 0.2% | 0.4% |
Key Changes:
- Promoter stake fell ~19% in 2 years
- FII interest negligible
- Retail is the main driver of price action (read: punter-heavy)
13. EduInvesting Verdict™
Sonam Ltd makes clocks. But this ain’t a high-margin Rolex play—it’s more like “plastic wall clock with Diwali discount”. And yet, it has its niche.
If India’s Tier-2 and Tier-3 gifting culture booms and digital LED clocks gain traction, Sonam could quietly tick along.
But for now?
It’s a cute stock for your watchlist… just don’t bet your time and money expecting it to become the next Havells.
Metadata
Written by EduInvesting Analyst | 14 July 2025
Tags: Sonam Ltd, Clock Manufacturing, Consumer Durables, Retail Exports, Promoter Selling, Small Cap, LED Clocks
