Buy Sundram Fasteners, target Rs 760: Siddharth Sedani

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Siddharth Sedani

Sundram Fasteners is the largest manufacturer and exporter of high tensile fasteners. It manufactures automotive components such as high tensile fasteners, radiator caps, powder metal parts, pumps and engine components. It caters to OEM in 2 wheelers, 4 wheelers, farm equipment and commercial vehicle segment.

Company is making efforts to improve product mix with focus on high-value products and increased contribution of exports.

As a part of its backward integration strategy, company added a second 10,000 tonne foundry plant to cater high demand for machine castings in China. The company is significantly adding capacity and has incurred Rs 200 – 300 crore capex in FY18. Management expects to invest Rs. 350 Crore in FY19. It has High ROE of 25.40 percent.