Sundram Fasteners Limited

“Sundram Fasteners is an ethically clean, operationally competent manufacturer whose economic engine is quietly but persistently deteriorating — ROCE has compressed from 27% to 17% over six years, incremental returns on new capital have collapsed to 7-8%, working capital days have ballooned from 103 to 177, and FCF nearly vanished in FY25. At 31.7x trailing earnings with near-zero FCF yield, the stock is priced for a growth acceleration that recent capex cycles have failed to deliver, while the EV transition poses a multi-year structural headwind to ICE-linked fastener content. The business will survive, but at this price and trajectory, it is a poor vehicle for long-term capital compounding.”