1. At a Glance
A niche manufacturer of reed switches, Switching Technologies Gunther (STG) is stuck between low visibility and… low profitability. With a market cap of just ₹18 Cr, zero dividend, negative net worth, and sales shrinking like a wet sponge, this one’s more “circuit breaker” than “live wire.”
2. Introduction with Hook
If penny stocks were a game of hide-and-seek, STG would be hiding behind the server rack in a blackout.
- 5-Year Sales CAGR: -10%
- TTM Operating Margin: -85%
- Market Cap: ₹18.4 Cr
They make niche reed switches used in aircrafts, telecoms, industrial control, and auto electronics. But lately, they’ve been better at short-circuiting investor expectations than powering performance.
3. Business Model (WTF Do They Even Do?)
Switching Technologies Gunther Ltd makes miniature reed switches, based on tech licensed from a foreign collaborator. These switches act as magnetic sensors and are vital in precision applications such as:
- Aircraft control systems
- Telecom relays
- Power electronics
- Auto electronics
- SMD switches & CRR sensors (in development)
Operations run out of an SEZ (MEPZ) in Chennai. No debt, but also no spark in performance.
4. Financials Overview
| Metric | FY22 | FY23 | FY24 | FY25 | TTM |
|---|---|---|---|---|---|
| Revenue (₹ Cr) | 10.61 | 11.52 | 8.68 | 7.72 | 7.87 |
| Expenses (₹ Cr) | 17.63 | 21.64 | 17.90 | 14.35 | 14.53 |
| Operating Profit | -7.02 | -10.12 | -9.22 | -6.63 | -6.66 |
| OPM % | -66% | -88% | -106% | -86% | -85% |
| Net Profit (₹ Cr) | -6.61 | 11.34* | -3.19 | -6.69 | -6.74 |
| EPS (₹) | -26.98 | 46.29* | -13.02 | -27.31 | -27.52 |
*That 11 Cr profit in FY23? A mirage from “other income” of ₹21.5 Cr. One-off. Ignore.
5. Valuation
| Metric | Value |
|---|---|
| CMP | ₹75.2 |
| Market Cap | ₹18.4 Cr |
| P/E | N/A (loss) |
| Book Value | NEGATIVE (₹-52.3) |
| Dividend Yield | 0.00% |
Fair Value Estimate:
Zero consistent profits, negative net worth. In DCF terms, valuation is literally vapor.
EduInvesting FV Range: ₹5 – ₹15 (based on salvageable asset value, not earnings)
6. What’s Cooking – News, Triggers, Drama
- Q1 FY26: Net loss ₹1.68 Cr on sales of ₹2 Cr
- Tech Expansion: Developing SMD reed switches and CRR sensors—but no revenue traction yet.
- Zero debt: A rare positive in this electric funeral.
- Reed switch demand is growing globally (IoT, auto). Will STG benefit? So far: silence.
7. Balance Sheet
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Equity Capital | ₹2.45 Cr | ₹2.45 Cr | ₹2.45 Cr |
| Reserves | ₹-4.78 Cr | ₹-8.12 Cr | ₹-15.26 Cr |
| Total Liabilities | ₹10.44 Cr | ₹7.16 Cr | ₹8.81 Cr |
| Net Worth | ₹-2.33 Cr | ₹-5.67 Cr | ₹-12.81 Cr |
Yes, that’s negative net worth. This is the balance sheet equivalent of a ghost.
8. Cash Flow – Sab Number Game Hai
| Year | CFO (₹ Cr) | CFI (₹ Cr) | Net Cash (₹ Cr) |
|---|---|---|---|
| FY23 | 0.01 | -0.04 | -0.02 |
| FY24 | 0.09 | -0.14 | -0.05 |
| FY25 | 0.21 | -0.09 | 0.11 |
Somehow still generating tiny operational cash. Probably cost-cutting, not core growth.
9. Ratios – Sexy or Stressy?
| Ratio | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROCE | — | — | — |
| ROE | — | — | — |
| OPM % | -88% | -106% | -86% |
| Inventory Days | 131 | 149 | 315 |
| Debtor Days | 159 | 122 | 145 |
| Working Cap Days | 65 | -34 | -350 |
If this was a patient, the vitals would be flatlining. Inventory Days tripled. OPM is basically anti-matter.
10. P&L Breakdown – Show Me the Money
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 11.52 | 8.68 | 7.72 |
| Operating Loss | -10.12 | -9.22 | -6.63 |
| Net Profit | 11.34* | -3.19 | -6.69 |
| EPS | 46.29* | -13.02 | -27.31 |
Again: FY23 profit is a fluke. Reality since 2017 is a slow-burning loss engine.
11. Peer Comparison
| Company | Sales (Cr) | PAT (Cr) | OPM % | ROE % | CMP ₹ | Mcap ₹ Cr |
|---|---|---|---|---|---|---|
| Waaree Energies | 14,444 | 1,870 | 18.8% | 27.6 | 3,290 | 94,552 |
| Apar Industries | 18,581 | 821 | 8.3% | 19.6 | 9,013 | 36,211 |
| Genus Power | 2,442 | 293 | 19.2% | 17.2 | 383 | 11,673 |
| STG Ltd | 7.87 | -6.74 | -85% | N/A | 75.2 | 18.4 |
This is like comparing a flashlight to a fusion reactor.
12. Miscellaneous – Shareholding, Promoters
- Promoter Holding: 61.22% (stable, but… why?)
- Public Holding: 38.75%
- DIIs: 0.02% (basically a rounding error)
- Dividend History: 0% since forever
- No dilution, no growth, no visibility
13. EduInvesting Verdict™
Switching Technologies Gunther Ltd is the equivalent of a dusty drawer in a factory office—technically there, but barely functioning. With 10+ years of negative net worth, consistently shrinking revenue, and horrifying margins, this stock is a “tech” company only in the most ironic sense.
Unless they suddenly win a unicorn IoT contract (spoiler: they won’t), this is likely dead capital.
This one isn’t a “hidden spark.”
It’s a loose wire… in the rain.
Metadata
– Written by EduInvesting Analyst Team | 16 July 2025
– Tags: Switching Technologies, Reed Switches, Penny Stocks, Industrial Electronics, Microcap Analysis, Chennai SEZ
