🧵 At a Glance
Stovec Industries makes rotary screens and textile printing machines — not your average party conversation starter. It’s a B2B industrial player backed by a solid Dutch parent (SPG Prints), throws 4.6% dividend yield like it’s Diwali, but has painfully slow revenue growth, falling profit trends, and a 48x P/E that’ll make you go “Bruh.”
1. 🪝 Hook: You’ve Heard of Tech Disruptors — Meet a B2B Sleep-Inducer That Pays You to Hold It
Imagine holding a stock that barely grows, but hands you a fat 4.6% dividend yield while keeping its books squeaky clean. Now imagine paying 48x earnings for that.
That’s Stovec. It won’t 10x, it won’t 0x, but it might just keep paying you for your patience.
2. 🧪 WTF Do They Even Do?
Stovec makes:
- 🎯 Rotary & Digital Textile Printing Machines
- 🧵 Perforated Nickel Screens
- 🧪 Engraving Machines
- 🧷 Textile & graphic consumables
- 🔧 Spare parts and screen chemicals
They cater to:
- Textile printing houses
- Graphic design/packaging
- Non-textile industrial customers
📦 They make money on both capital equipment (the machine) and consumables (recurring revenue). But in reality, this niche is shrinking due to digital disruption in textile & graphics.
3. 💰 Financials Overview – Profit, Margins, ROE, Growth
| Metric | Value |
|---|---|
| FY24 Revenue | ₹235 Cr |
| FY24 Net Profit | ₹13 Cr |
| OPM | ~9% (was 20%+ in the past) |
| ROE | 9.86% |
| ROCE | 13.3% |
| 5Y Sales CAGR | 3.8% ❌ |
| 5Y PAT CAGR | -14% ❌ |
🔍 Margins have been steadily declining, from 20% OPM in FY17 to single digits now.
4. 📊 Valuation – Cheap, Meh, or Crack?
| Metric | Value |
|---|---|
| CMP | ₹2,495 |
| EPS (TTM) | ₹51.7 |
| P/E | 48.3x ❌ |
| Book Value | ₹599 |
| P/B | 4.17x |
| Dividend Yield | 4.6% ✅ |
💡 This is NOT a growth stock. It’s a low-growth, dividend-paying industrial trading at growth-stock P/E levels.
🎯 Fair Value Range: ₹1,400–₹1,800
Assuming a stable ₹12–₹14 Cr PAT and a fair 20–25x P/E multiple for dividend-paying industrials
5. 🍲 What’s Cooking – Any Drama, News, Triggers?
✅ Rs.115/share dividend declared in May 2025
✅ Signed wage agreement with Screen Division union
🚫 Two Independent Directors retired this year
❌ No capex or growth roadmap
❌ Sales stuck at ₹200–₹235 Cr for 5+ years
💤 A business in slow-mo, but with high corporate governance
No scandals. No rallies. No pivots. Just vibes and perforated screens.
6. 🧾 Balance Sheet – How Much Debt, How Many Dreams?
| Metric | FY24 |
|---|---|
| Total Assets | ₹160 Cr |
| Reserves | ₹123 Cr |
| Equity Capital | ₹2 Cr |
| Debt | ₹0 Cr ✅ |
| Other Liabilities | ₹36 Cr |
| Fixed Assets | ₹32 Cr |
| Working Capital | Healthy |
Cleanest books in the category. Almost too clean.
7. 🧮 Cash Flow – Sab Number Game Hai
| Year | CFO | FCF | Net Cash Flow |
|---|---|---|---|
| FY24 | ₹16 Cr | Positive | ₹-5 Cr |
| FY23 | ₹13 Cr | Positive | ₹-2 Cr |
| FY22 | ₹24 Cr | Neutral | ₹8 Cr |
Cash is real. But it’s not enough to fuel growth — just enough to pay dividends.
8. 🔍 Ratios – Sexy or Stressy?
| Ratio | Value |
|---|---|
| ROCE | 13.3% ✅ |
| ROE | 9.86% ✅ |
| OPM | 8–9% (Declining) ❌ |
| Working Capital Days | 69 |
| Cash Conversion Cycle | 130 days ❌ |
| Debt | Zero ✅ |
| Dividend Payout Ratio | 209% 🤯 |
➡️ They pay more than they earn. Literally. FY24 EPS ₹62, dividend ₹115.
9. 💸 P&L Breakdown – Show Me the Money
| FY | Revenue | OPM | Net Profit |
|---|---|---|---|
| FY21 | ₹233 Cr | 16% | ₹30 Cr |
| FY22 | ₹236 Cr | 11% | ₹25 Cr |
| FY23 | ₹207 Cr | 6% | ₹9 Cr |
| FY24 | ₹235 Cr | 9% | ₹13 Cr |
It’s like watching an old classic — same actors, same script, declining box office.
10. 🥊 Peer Comparison – Who Else in the Game?
| Company | P/E | OPM | ROE | PAT | Mcap |
|---|---|---|---|---|---|
| Stovec | 48.3x | 9% | 9.8% | ₹11 Cr | ₹521 Cr |
| Kaynes Tech | 142x | 15% | 11% | ₹293 Cr | ₹41,740 Cr |
| Honeywell Auto | 69x | 14% | 13.7% | ₹523 Cr | ₹36,199 Cr |
| Tega Inds | 53x | 20% | 15.5% | ₹200 Cr | ₹10,595 Cr |
🧠 No direct peer. Most others are growth-driven. Stovec is dividend-driven.
11. 👨👩👧 Shareholding, Promoters, KMP
| Type | Mar 2025 |
|---|---|
| Promoter | 71.06% ✅ (SPG Prints B.V., Netherlands) |
| Public | 28.9% |
| DII/FII | Practically zero |
| No. of shareholders | 7,445 |
🤝 Dutch promoters run a tight ship. Governance is top-tier. But FII/DIIs are ignoring it, and no analyst coverage either.
12. 🧠 EduInvesting Verdict™
Stovec is not a multibagger. It’s a dividend uncle.
Perfect for retired HNIs who want:
- Zero debt
- Consistent payouts
- No scandals
- A 3–5% dividend yield with peace of mind
But…
❌ No growth
❌ Declining profitability
❌ Overvalued at 48x
❌ No capex or vision for expansion
💰 Final Fair Value Range: ₹1,400–₹1,800
Based on ₹11–₹13 Cr PAT, 20–25x PE, 4–5% yield adjustment
✍️ Written by Prashant | 📅 July 3, 2025
Tags: Stovec Industries, dividend yield stock, textile capital goods, SPG Prints, zero debt industrials, high dividend payout, EduInvesting, Indian niche industrial stocks, smallcap B2B stocks
