Aaron Industries Limited

Industrials — Specialty Industrial Machinery · NSE

₹127.87−₹0.28 (−0.22%)

DalalBaazaar Score

57 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Moderate

Driven by micro-cap size, which brings thin liquidity.

In simple words: Strong business and financial position, with both sales and profits growing well. Nothing on this snapshot stands out as an immediate concern — the usual checks on business quality and management still apply.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:02 pm

Understanding the Business

Company site ↗

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

What does this company do?

Aaron Industries Limited engages in the manufacture and sale of elevators and elevator parts in India. It operates through the Elevator and Steel Polishing segments.

IndustrySpecialty Industrial Machinery

SectorIndustrials

Employees204

Annual revenue₹92 Cr

How does it make money?

Turns over ₹92 Cr a year. Of every ₹100 of sales, about ₹7 reaches shareholders as profit, with ₹20 left at the operating level before interest, tax and depreciation. Each of its 204 employees supports ₹45.1 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹45.1 lakh

Who are its competitors?

The closest listed comparisons in its industry are SIEMENS LTD, ABB INDIA LIMITED, LARSEN & TOUBRO LTD., HAVELLS INDIA LIMITED. 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?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 21.3%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 14.0% against a peer median of 17.1% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

Peer median ROE17.1%

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +65% while net margin moved -24% 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+65%

Margin effect-24%

DalalBaazaar Score

57/ 100

Moderate

Weighted across six categories. Every point is explained below.

• P/E of 39.5x already prices in growth
• P/E is close to its own historical median of 48.6x
✗ P/B of 5.51x is a steep premium to book

Quality vs. Valuation

Company Quality

59/ 100

Average

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

Valuation

49/ 100

Fair

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

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

39.5x

3Y Median

48.6x

40 monthly readings · mean 47.3x · range 27.8x–74.7x

Sector Median

66.2x

median of 4 sector peers

🟢Current valuation is approximately 19% below its 3y median of 48.6x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 40% below the peer median of 66.2x.

vs. its own history

Fair

48.6x median over 40 months · -19%

vs. sector peers

Cheap

66.2x median of 4 peers · -40%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

16.5x

PEG

4.97

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 17.1% to 19.5% over 3 years.
Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
High return on capital employed
ROCE of 21.3% is the mark of a business that converts capital into profit efficiently.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 26.4% to 14.0% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 30.9% to 21.3% — often a sign of competition or overexpansion.

Red Flags

3 items require attention · 2 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 144% over 3 years, from ₹11 Cr to ₹28 Cr.
🔴Receivables growing faster than salesFinancial
Receivables up 176% against revenue up 65% — sales are being booked faster than they are collected.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 10.7x to 5.6x.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 21.3% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Margin expansion has further to run
EBITDA margin has risen from 17.1% to 19.5%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Cheaper than its peers
It trades 40% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
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?

Sales are being booked faster than collected
Receivables are up 176% against revenue up 65%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Returns on shareholder capital are falling
ROE has dropped from 26.4% to 14.0%. 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

1Revenue growth stays above 14% a year✓ 18.1% CAGR
Latest reported year was 27.0%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 18%✓ 19.5%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✓ ₹6 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.5x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 18%✓ 21.3%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

8 / 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

6 good · 4 neutral · 1 weak

Market Cap

₹268 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

39.5x

Fair

Fairly valued against the generic band

P/B Ratio

5.51x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹3.24

Profitable

Profitable on a per-share basis

ROE

14.0%

Moderate

Moderate capital efficiency

ROCE

21.3%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.57x

Low

Conservative leverage

Revenue Growth (YoY)

27.0%

Healthy

Healthy top-line growth

Profit Growth (YoY)

141.6%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.39%

Modest

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

Free Cash Flow

₹6 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

16.1%

Good

Healthy core-business profitability

Net Margin

8.5%

Average

Average bottom-line conversion

Current Ratio

1.37

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.13

Defensive

Steadier than the market

52W Range Position

17%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

124.0 / 129.8

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

53.9

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹56 Cr	₹63 Cr	₹78 Cr	₹92 Cr	+18.1%
EBITDA	₹10 Cr	₹11 Cr	₹15 Cr	₹18 Cr	+23.6%
EBITDA Margin	17.1%	17.8%	19.2%	19.5%	—
PAT (Net Profit)	₹5 Cr	₹6 Cr	₹8 Cr	₹7 Cr	+7.9%
EPS	₹2.69	₹3	₹3.94	—	—
ROE	26.4%	17.7%	19.2%	14.0%	—
ROCE	30.9%	16.5%	20.7%	21.3%	—
Total Debt	₹11 Cr	₹32 Cr	₹32 Cr	₹28 Cr	+34.6%
Free Cash Flow	-₹1 Cr	-₹28 Cr	₹1 Cr	₹6 Cr	—

🟢 Revenue has grown at 18.1% a year over 3 years.

🟢 EBITDA has grown at 23.6% a year over 3 years.

🟢 EBITDA Margin has risen from 17.1% to 19.5% over 3 years (+2.5 pts).

🟢 PAT (Net Profit) has grown at 7.9% a year over 3 years.

🔴 ROE has fallen from 26.4% to 14.0% over 3 years (-12.4 pts).

🔴 ROCE has fallen from 30.9% to 21.3% over 3 years (-9.6 pts).

🔴 Total Debt has grown at 34.6% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹1 Cr to ₹6 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹91 Cr

Total Liabilities

₹43 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

₹8 Cr

Capex

-₹2 Cr

Corporate Actions

Dividend Rate

₹0.5

Ex-Dividend Date

14 Aug 2026

Peer Comparison

Company	P/E	ROE
SIEMENS LTD	88.8x	10.5%
ABB INDIA LIMITED	92.6x	19.1%
LARSEN & TOUBRO LTD.	30.1x	15.2%
HAVELLS INDIA LIMITED	43.5x	17.1%

Recent News

2 positive4 general

Compare KILBURN ENGG with

Equitymaster, 16 Oct

Aaron Industries Limited (NSE:AARON) Passed Our Checks, And It's About To Pay A ₹0.50 Dividend

Simply Wall Street, 10 AugCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Aaron Industries ISEE 2026 Participation: What Investors Should Know

Kalkine India, 13 Oct

Aaron Industries Ltd is Rated Hold

MarketsMojo, 13 Oct

Aaron Industries confirms Aug 14 dividend record date for FY26

scanx.trade, 27 JulCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Aaron Industries Ltd. Peer Comparison – Compare with Others

Value Research, 03 Sept

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongFinancial Health

MiddlingBusiness Quality · Growth · Profitability · Risk

WeakValuation

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 2 high-severity red flags sit above this conclusion and should be read first.

All 5 tripwires holding · see Key things to watch ↑