Akar Auto Industries Limited

Consumer Cyclical — Auto Parts · BSE

₹82.00−₹0.81 (−0.98%)

DalalBaazaar Score

31 / 100

🔴 Weak

Verdict

CAUTION

Risk

Very High

Driven by high debt relative to equity, the company is currently loss-making, micro-cap size, which brings thin liquidity.

In simple words: The company is currently losing money, but sales are shrinking. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:58 pm

Understanding the Business

Company site ↗

The 60-second version of Akar Auto Industries Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Akar Auto Industries Limited manufactures, sells, exports, imports, and trades in automotive components in India and internationally.

IndustryAuto Parts

SectorConsumer Cyclical

Employees333

Annual revenue₹321 Cr

How does it make money?

Turns over ₹321 Cr a year. Of every ₹100 of sales, about ₹0 reaches shareholders as profit, with ₹6 left at the operating level before interest, tax and depreciation. Each of its 333 employees supports ₹96.3 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹96.3 lakh

Who are its competitors?

The closest listed comparisons in its industry are BOSCH LIMITED, MARUTI SUZUKI INDIA LTD., TVS MOTOR COMPANY LTD, EICHER MOTORS LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 14.9% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE23.0%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -7% while net margin moved -86% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect-7%

Margin effect-86%

DalalBaazaar Score

31/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 2.3% a year
✗ Profit has declined at 48.8% a year
✗ Latest-year revenue growth of -13.6% is below the longer-term trend — momentum is fading
✗ Profit fell 73.8% in the latest year

Quality vs. Valuation

Company Quality

30/ 100

Weak

How good the business is, ignoring the share price entirely.

Valuation

39/ 100

Expensive

What you are being asked to pay, ignoring how good the business is.

Weak on business quality and not cheap enough to compensate.

vs. its own history

Not enough price and earnings history

vs. sector peers

Not enough peers with a usable P/E

vs. generic bands

N/A

No P/E — the company is lossmaking

EV/EBITDA

8.7x

PEG

—

What's Good / What's Bad

🟢 What's Going Well1

Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 17.4% to 1.8% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 25.4% to 14.9% — often a sign of competition or overexpansion.

Red Flags

5 items require attention · 2 high · 3 watch

🔴High leverageFinancial
Debt/Equity of 1.82x — earnings must service borrowings before shareholders see anything.
🔴Thin interest coverageFinancial
Operating profit covers interest only 1.4x — little room if earnings dip.
🟡Debt is increasingFinancial
Total debt is up 43% over 3 years.
🟡Profit is decliningFinancial
Net profit is down 87% over 3 years.
🟡Inventory building faster than salesFinancial
Inventory up 32% against revenue up -7% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

The debt load needs earnings to hold up
Debt is 4.5x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Returns on shareholder capital are falling
ROE has dropped from 17.4% to 1.8%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.
Several serious flags at once
2 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 4%✓ 6.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 4.5x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Interest cover stays above 3x✗ 1.4x
How much operating profit can fall before interest stops being comfortably covered.
4Free cash flow remains positive✓ ₹4 Cr
Profit that never becomes cash eventually stops being profit.
5ROCE stays above 12%✓ 14.9%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

4 / 11 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✗ Revenue growing year-over-year
✗ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

1 good · 4 neutral · 6 weak

Market Cap

₹88 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

Not meaningful

Loss-making

Earnings are negative, so a P/E multiple can't be read here

P/B Ratio

1.73x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹-0.39

Loss-making

Negative earnings per share — the business is losing money

ROE

1.8%

Weak

Weak capital efficiency

ROCE

14.9%

Moderate

Moderate return on the capital in the business

Debt/Equity

1.82x

High

High leverage

Revenue Growth (YoY)

-13.6%

Shrinking

Sales are contracting

Profit Growth (YoY)

-73.8%

Falling

Profits are shrinking

Dividend Yield

0.37%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹4 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

5.4%

Average

Average margins

Net Margin

-0.1%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.08

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.85

Market-like

Moves roughly in line with the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

85.3 / 91.6

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

38.4

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹344 Cr	₹354 Cr	₹355 Cr	₹321 Cr	-2.3%
EBITDA	₹21 Cr	₹23 Cr	₹25 Cr	₹20 Cr	-0.9%
EBITDA Margin	6.1%	6.5%	7.0%	6.4%	—
PAT (Net Profit)	₹7 Cr	₹5 Cr	₹6 Cr	₹1 Cr	-48.8%
EPS	₹6.38	₹5.09	₹5.98	₹0.85	-48.9%
ROE	17.4%	12.3%	12.9%	1.8%	—
ROCE	25.4%	23.5%	25.0%	14.9%	—
Total Debt	₹65 Cr	₹83 Cr	₹80 Cr	₹93 Cr	+12.7%
Free Cash Flow	₹16 Cr	-₹8 Cr	₹17 Cr	₹4 Cr	-36.1%

🔴 Revenue has shrunk at 2.3% a year over 3 years.

🟡 EBITDA has been broadly flat over 3 years (-0.9% a year).

🟡 EBITDA Margin has held roughly flat at 6.4% over 3 years.

🔴 PAT (Net Profit) has shrunk at 48.8% a year over 3 years.

🔴 EPS has shrunk at 48.9% a year over 3 years.

🔴 ROE has fallen from 17.4% to 1.8% over 3 years (-15.6 pts).

🔴 ROCE has fallen from 25.4% to 14.9% over 3 years (-10.5 pts).

🔴 Total Debt has grown at 12.7% a year over 3 years.

🔴 Free Cash Flow has shrunk at 36.1% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹256 Cr

Total Liabilities

₹205 Cr

Cash & Equivalents

₹3 Cr

Operating Cash Flow

₹29 Cr

Capex

-₹25 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

77.1%

Corporate Actions

Dividend Rate

₹0.3

Ex-Dividend Date

22 Sept 2026

Peer Comparison

Company	P/E	ROE
BOSCH LIMITED	56.9x	15.9%
MARUTI SUZUKI INDIA LTD.	25.2x	13.4%
TVS MOTOR COMPANY LTD	56.8x	35.8%
EICHER MOTORS LTD	34.7x	23.0%

Recent News

1 negative5 general

Akar Auto Industries schedules AGM for Sep 29, seeks RPT approval

scanx.trade, 31 Aug

Akar Auto Industries Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 30 Aug

Akar Auto Industries Ltd. Key Financial Ratios – Valuation, Profitability & More

Value Research, 30 Aug

Akar Auto Industries FY26 profit drops 85.7% to ₹92.18 lakh

scanx.trade, 29 MayResults

🔴Potentially negativeReported deterioration, which feeds the growth and margin inputs on this page directly.

The recent ₹5.8b market cap decrease is likely to have disappointed insiders invested in Banco Products (India) Limited (NSE:BANCOINDIA)

Simply Wall Street, 10 Jan

Akar Auto Industries Ltd. Peer Comparison – Compare with Others

Value Research, 01 Sept

Watch Items

Revenue growth is negative (-13.6%) on the latest reported period — check if this is one-off or a trend.
Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

MiddlingFinancial Health

WeakBusiness Quality · Growth · Profitability · Valuation · Risk

Points for each in the Score ↑

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation. 2 high-severity red flags sit above this conclusion and should be read first.

2 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Interest cover stays above 3x · see Key things to watch ↑