Sundram Fasteners Limited is one of the leading manufacturers of auto components with a turnover of over Rs.1250 crores. The Company manufactures high tensile fasteners, automotive components, automotive and other miscellaneous cold formed/extruded parts, powder metal parts, precision formed gears, iron powders, radiator caps, gear shifters & tyre carriers.

Sundram Fasteners Limited was established in the year 1966 to manufacture high-tensile fasteners. Driven by a consistent policy of achieving excellence in all areas of operation, the company has grown into a multi-product market leader today, with a strong presence in international markets. Its first manufacturing facility was set up at Padi to manufacture high tensile fasteners for OEMs. In order to meet the increasing customer requirement and to cater to international markets, two additional manufacturing facilities were set up at Krishnapuram near Madurai and at Pondicherry. The company diversified its area of operation from manufacturing fasteners to automotive components, automotive and other miscellaneous cold formed/extruded parts, powder metal parts, precision formed gears, iron powders, radiator caps, gear shifters & tyre carriers.

Products & Services—

SFL currently has 5 plants - at Chennai, Hosur, Madurai, Medak and Pondicherry. Madurai and Chennai plants (manufacturing fasteners), contribute around 80% to turnover. Sundram fasteners is the largest manufacturer of over 70% market shares and exporter of high-tensile fasteners (HTF). Its product range includes HTF, automotive components, cold formed/extruded products (tie-up with Nuemeyer, Germany), powder metal parts (tie-up with Sintal Metalwerke Krebsoge, Germany), precision formed gears and radiator caps. Fasteners contribute over 60.5% to the company’s turnover, while cold extruded and powder metal parts contribute around 18%. SFL is the sole supplier of radiator caps and has now started supply of powder metal parts to GM, USA. The company also supplies fasteners to Daimler Benz AG, Germany (through Kamax) and Cummins Engine Company Inc., USA. SFL produces the largest range of fasteners in the country and has the largest library of tools in the sector. Apart from the original equipment (OE) market, the
company has a presence in the replacement and export markets as well. In the OE sector, its clientele includes auto majors such as Telco, Maruti Udyog, Bajaj Auto and Mahindra & Mahindra.

Sundram Fasteners Limited (SFL) has a Joint Venture Agreement with Bleistahl Produktions Gmbh & Co., Germany to manufacture Valve Train Parts including valve guides and valve seat inserts in India. Bleistahl Produktions Gmbh & Co., (Bleistahl) is a Company incorporated in Germany having a total turnover of about 45 Million Euros and with production

facilities in Brazil, Germany, Iran and South Africa. Its production facility in China is under construction. Its customers include Audi, BMW, Daimler Chrysler, Ford, General Motors, Mitsubishi, Porsche, Skoda, Volkswagen, Volvo and Caterpillar. This was the first joint venture entered into by SFL and was also the first joint venture for Bleistahl in India.

Valuations

At current market price, stock is trading at 9.82 P/E multiple of its FY2010 estimated earnings. We recommend investors to buy “Sundram Fasteners Limited” with medium to long term investment horizon.