Automotive Axles Limited

Consumer Cyclical — Auto Parts · NSE

₹1,641.00+₹30.40 (+1.89%)

DalalBaazaar Score

54 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Moderate

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

In simple words: Strong business and financial position, with modest growth. Nothing obvious stands out as stretched — the usual checks on business quality and management still apply.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:03 pm

Understanding the Business

Company site ↗

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

What does this company do?

Automotive Axles Limited manufactures and sells automotive components in India. It offers drive axles, non-drive axles, defense axles, front steer axles, off-highway axles, drum and disc brakes, and suspension related products.

IndustryAuto Parts

SectorConsumer Cyclical

Employees901

Annual revenue₹2,128 Cr

How does it make money?

Turns over ₹2,128 Cr a year. Of every ₹100 of sales, about ₹8 reaches shareholders as profit, with ₹12 left at the operating level before interest, tax and depreciation. Each of its 901 employees supports ₹2.36 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹2.36 Cr

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?Some evidence

ROCE of 19.8% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

Peer median ROE23.0%

What is the outlook?

1 analysts covering the stock expect revenue to grow about 8.2% and earnings to grow about 9.2% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+8.2%

Est. earnings growth+9.2%

Analysts1

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved -6% while net margin moved +8% 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-6%

Margin effect+8%

DalalBaazaar Score

54/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 1.9% a year
✗ Profit CAGR of only 0.5%

Quality vs. Valuation

Company Quality

50/ 100

Average

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

Valuation

64/ 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

14.2x

3Y Median

17.2x

40 monthly readings · mean 17.4x · range 14.7x–21.3x

Sector Median

45.7x

median of 4 sector peers

🟢Current valuation is approximately 17% below its 3y median of 17.2x. 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 69% below the peer median of 45.7x.

vs. its own history

Fair

17.2x median over 40 months · -17%

vs. sector peers

Cheap

45.7x median of 4 peers · -69%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

9.4x

PEG

29.63

What's Good / What's Bad

🟢 What's Going Well3

Debt is being paid down
Total debt is down 50% over 3 years.
Cash generation is improving
Free cash flow is up 179% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 21.3% to 15.0% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 28.1% to 19.8% — often a sign of competition or overexpansion.

Red Flags

No automated checks triggered

None of the automated financial checks below were triggered on the years of data available. That is not the same as a clean bill of health — see what could not be checked.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 19.8% 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.
Deleveraging frees up earnings
Debt is down 50% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Cheaper than its peers
It trades 69% 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?

Returns on shareholder capital are falling
ROE has dropped from 21.3% to 15.0%. 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.

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

1EBITDA margin holds above 10%✓ 12.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✓ ₹99 Cr
Profit that never becomes cash eventually stops being profit.
3Debt / EBITDA stays below 2x✓ 0.1x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4ROCE stays above 17%✓ 19.8%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Valuation vs its own median of 17.2x✓ 14.2x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

8 / 12 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
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

5 good · 6 neutral · 0 weak

Market Cap

₹2,480 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

14.2x

Cheap

Cheap against the generic band

P/B Ratio

2.26x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹115.3

Profitable

Profitable on a per-share basis

ROE

15.0%

Moderate

Moderate capital efficiency

ROCE

19.8%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

1.28x

Moderate

Moderate leverage

Revenue Growth (YoY)

5.6%

Modest

Modest growth

Profit Growth (YoY)

27.6%

Healthy

Profits growing at a healthy clip

Dividend Yield

1.95%

Modest

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

Free Cash Flow

₹99 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

11.9x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

9.9%

Average

Average margins

Net Margin

7.9%

Average

Average bottom-line conversion

Current Ratio

2.96

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.54

Defensive

Steadier than the market

52W Range Position

18%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

1654.6 / 1702.9

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

33.1

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹2,257 Cr	₹2,177 Cr	₹2,035 Cr	₹2,128 Cr	-1.9%
EBITDA	₹262 Cr	₹260 Cr	₹243 Cr	₹260 Cr	-0.2%
EBITDA Margin	11.6%	11.9%	11.9%	12.2%	—
PAT (Net Profit)	₹162 Cr	₹166 Cr	₹156 Cr	₹164 Cr	+0.5%
EPS	₹107.22	₹109.95	₹102.92	₹108.77	+0.5%
ROE	21.3%	19.0%	15.8%	15.0%	—
ROCE	28.1%	25.1%	21.3%	19.8%	—
Total Debt	₹28 Cr	₹22 Cr	₹16 Cr	₹14 Cr	-20.6%
Free Cash Flow	₹36 Cr	₹241 Cr	₹102 Cr	₹99 Cr	+40.7%

🟡 Revenue has been broadly flat over 3 years (-1.9% a year).

🟡 EBITDA has been broadly flat over 3 years (-0.2% a year).

🟡 EBITDA Margin has held roughly flat at 12.2% over 3 years.

🟡 PAT (Net Profit) has been broadly flat over 3 years (0.5% a year).

🟡 EPS has been broadly flat over 3 years (0.5% a year).

🔴 ROE has fallen from 21.3% to 15.0% over 3 years (-6.4 pts).

🔴 ROCE has fallen from 28.1% to 19.8% over 3 years (-8.3 pts).

🟢 Total Debt has shrunk at 20.6% a year over 3 years.

🟢 Free Cash Flow has grown at 40.7% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1,520 Cr

Total Liabilities

₹422 Cr

Cash & Equivalents

₹38 Cr

Operating Cash Flow

₹173 Cr

Capex

-₹73 Cr

Shareholding (proxy)

Institutional Holding

15.9%

Insider Holding

71.0%

Corporate Actions

Dividend Rate

₹32

Ex-Dividend Date

05 Aug 2026

Analyst Consensus

Recommendations

1 Buy · 0 Hold · 0 Sell

Target Price (Mean)

₹2,210

+34.7% vs CMP

Target Range

₹2,210 – ₹2,210

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

2 mixed1 negative3 general

Compare AUTOMOTIVE AXLES with

Equitymaster, 16 Oct

Automotive Axles: 7 Stock Signals to Watch

Univest, 22 Sept

Automotive Axles Ltd. Key Financial Ratios – Valuation, Profitability & More

Value Research, 31 Aug

Automotive Axles Q3FY26 Results: Revenue Grows to ₹5,622M with Earnings Call Insights

scanx.trade, 06 FebResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Why Is Automotive Axles Share Price Falling Key Reasons 2026

Univest, 03 JulPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Automotive Axles Ltd cites STP non-compliance notice from KSPCB

scanx.trade, 09 AugRegulatory

🔴Potentially negativeRegulatory and legal actions carry a financial cost and a governance question. The second usually matters more than the first.

Watch Items

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

DalalBaazaar Thesis

StrongFinancial Health · Valuation

MiddlingBusiness Quality · Profitability · Risk

WeakGrowth

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.

All 5 tripwires holding · see Key things to watch ↑