Recommendation from Construction Materials Sector

This section gives a recommendation of a stock having stock price below Rs 150 with sound fundamentals and expected to give handsome returns over a one-year time horizon [EasyDNNnews:PaidContentStart]

Saint-Gobain Sekurit India Ltd : VISIBILITY IMPROVES ON THE ROAD AHEAD

HERE IS WHY
✓  Strong laminated glass position
✓  Differentiated value-added products
✓  Healthy financial outlook

I ndia’s auto-glass market serves automakers and spares buyers across passenger, commercial and three-wheelers. Entry barriers are high as suppliers need modern plants, firm quality checks, fast delivery and strong client ties. Saint-Gobain Sekurit India has a niche in layered safety glass, mainly windscreens, with a strong three-wheeler base. The company also gains from the parent’s supply network, research, market reach and process skills. Saint-Gobain Sekurit France and Saint-Gobain India jointly own 75 per cent in the company.

The company turns flat glass into safe windscreens and premium glazing at its Chakan plant in Pune. It supplies OEM and spares buyers across passenger, commercial and three-wheeler categories. Its range includes quiet, heated and light windscreens, plus glass with built-in antennas. These products improve cabin comfort, visibility, energy efficiency and vehicle design, allowing the company to differentiate itself from commodity suppliers.

The sector view remains positive, backed by vehicle output, road spend, easy credit and exports. Electric three-wheelers form over 60 per cent of segment retail sales, making electric mobility a key demand driver. Three-wheeler growth may moderate in FY2027 because of a high base, but commercial vehicles should grow steadily. Mandatory AC cabins in medium and heavy trucks can further raise demand for larger, advanced windscreens. A growing vehicle base should also aid replacement sales. Delhi’s electric-mobility push and plan to replace old public buses with clean or electric models may lift demand and spur similar fleet-renewal steps elsewhere.

Growth can come from closer work with bus body makers, as the large glass area per bus makes small share gains meaningful. New light and small commercial vehicle projects can create long-term sales after platform approval. Entry into electric three-wheeler OEM projects offers another key opportunity. Replacement sales can expand through new parts, good service and a wider truck and bus network. An installed auto-loader and upgrades in lamination and bending can raise output and quality, and cut unit cost. Renewable power through the Murli Solar deal may trim energy cost, while group support can speed premium glazing for air-conditioned commercial vehicles.

Key risks include auto-cycle weakness, client concentration and Reliance on one plant. Shifts in glass, PVB, power and currency costs may hurt margins. Imports, substitute materials, new methods and stricter green rules may affect competitiveness. Large purchases from group firms also create sourcing and related-party risks.

FY2026 revenue rose 16.6 per cent to ₹242.99 crore, while operating profit grew nearly 26 per cent to ₹60 crore. Operating margin rose to 24.7 per cent from 22.9 per cent. PAT grew 27.3 per cent to ₹45.80 crore, lifting its margin to 18.8 per cent from 17.3 per cent. EPS increased to ₹5.03 from ₹3.95. Operating cash flow rose to ₹33.39 crore from ₹28.01 crore despite higher inventory and debtor days. The balance sheet stays strong, with investments and cash of about ₹202.5 crore and no Bank debt at year-end.

At 29.6 times earnings, the stock trades below its three-year median P/E of 33.5 times. A PEG ratio of 1.51 shows it is not low, but higher profit, firm margins, liquidity and parent support justify a premium. The 1.91 per cent Dividend yield and five-year payout record add comfort. Electric three-wheelers, bus and LCV wins, aftermarket growth, premium products, automation and energy savings aid the outlook. Auto cyclicality and execution remain key risks. Keeping the above factors in mind, we recommend BUY.

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