Bharat Gears Limited

Consumer Cyclical — Auto Parts · NSE

₹102.21+₹0.51 (+0.50%)

DalalBaazaar Score

57 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Moderate

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

In simple words: Strong business and financial position, though profits are falling even as sales grow. The direction of profits is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:49 pm

Understanding the Business

Company site ↗

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

What does this company do?

Bharat Gears Limited manufactures and supplies automotive gear in India, the United States, Mexico, Spain, and internationally.

IndustryAuto Parts

SectorConsumer Cyclical

Employees1,107

Annual revenue₹769 Cr

How does it make money?

Turns over ₹769 Cr a year. Of every ₹100 of sales, about ₹2 reaches shareholders as profit, with ₹7 left at the operating level before interest, tax and depreciation. Each of its 1,107 employees supports ₹69.4 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹69.4 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?Some evidence

ROCE of 17.6% 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 has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +3% while net margin moved +19% 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+3%

Margin effect+19%

DalalBaazaar Score

57/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue CAGR of only 0.9% — barely ahead of inflation
✗ Profit CAGR of only 7.0%
✗ Profit fell 90.7% in the latest year

Quality vs. Valuation

Company Quality

53/ 100

Average

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

Valuation

81/ 100

Cheap

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

10.5x

3Y Median

13.2x

40 monthly readings · mean 24.1x · range 7.5x–63.6x

Sector Median

45.7x

median of 4 sector peers

🟢Current valuation is approximately 21% below its 3y median of 13.2x. 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 77% below the peer median of 45.7x.

vs. its own history

Cheap

13.2x median over 40 months · -21%

vs. sector peers

Cheap

45.7x median of 4 peers · -77%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

4.1x

PEG

1.50

What's Good / What's Bad

🟢 What's Going Well2

Debt is being paid down
Total debt is down 37% over 3 years.
Return on capital is rising
ROCE has improved from 13.9% to 17.6%.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

1 item require attention · 1 high

🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Deleveraging frees up earnings
Debt is down 37% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Priced below its own history
The stock trades 21% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Cheaper than its peers
It trades 77% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.

🔴 Bear CaseWhat could go wrong?

Growth barely outpaces inflation
Revenue compounding at 0.9% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
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 5%✓ 7.3%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Interest cover stays above 3x✗ 2.9x
How much operating profit can fall before interest stops being comfortably covered.
3Revenue growth stays above 4% a year✗ 0.9% CAGR
Latest reported year was 19.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
4Free cash flow remains positive✓ ₹18 Cr
Profit that never becomes cash eventually stops being profit.
5Debt / EBITDA stays below 2x✓ 1.3x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.

Investment Checklist

7 / 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

7 good · 3 neutral · 1 weak

Market Cap

₹157 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

10.5x

Cheap

Cheap against the generic band

P/B Ratio

1.20x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹9.78

Profitable

Profitable on a per-share basis

ROE

12.6%

Moderate

Moderate capital efficiency

ROCE

17.6%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.56x

Low

Conservative leverage

Revenue Growth (YoY)

19.9%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-90.7%

Falling

Profits are shrinking

Dividend Yield

0.98%

Modest

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

Free Cash Flow

₹18 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

1.4%

Weak

Thin margins leave little room for error

Net Margin

1.8%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.23

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.49

Defensive

Steadier than the market

52W Range Position

32%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

101.8 / 102.4

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

52.9

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹747 Cr	₹645 Cr	₹633 Cr	₹769 Cr	+0.9%
EBITDA	₹52 Cr	₹23 Cr	₹25 Cr	₹56 Cr	+2.5%
EBITDA Margin	7.0%	3.6%	3.9%	7.3%	—
PAT (Net Profit)	₹13 Cr	-₹10 Cr	₹3 Cr	₹17 Cr	+7.0%
EPS	₹8.78	₹-6.34	₹2.08	₹10.75	+7.0%
ROE	11.2%	-8.8%	2.8%	12.6%	—
ROCE	13.9%	0.8%	9.7%	17.6%	—
Total Debt	₹116 Cr	₹113 Cr	₹80 Cr	₹73 Cr	-14.3%
Free Cash Flow	₹16 Cr	₹32 Cr	₹35 Cr	₹18 Cr	+5.0%

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

🟢 EBITDA has grown at 2.5% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 7.3% over 3 years.

🟢 PAT (Net Profit) has grown at 7.0% a year over 3 years.

🟢 EPS has grown at 7.0% a year over 3 years.

🟢 ROE has risen from 11.2% to 12.6% over 3 years (+1.4 pts).

🟢 ROCE has risen from 13.9% to 17.6% over 3 years (+3.7 pts).

🟢 Total Debt has shrunk at 14.3% a year over 3 years.

🟢 Free Cash Flow has grown at 5.0% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹401 Cr

Total Liabilities

₹270 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

₹29 Cr

Capex

-₹11 Cr

Shareholding (proxy)

Institutional Holding

1.2%

Insider Holding

56.5%

Corporate Actions

Dividend Rate

₹1

Ex-Dividend Date

06 Aug 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

2 positive1 mixed3 general

Here's Why We Think Bharat Gears (NSE:BHARATGEAR) Might Deserve Your Attention Today

Simply Wall Street, 17 Jun

Bharat Gears acquires 29.55% stake in Hexa Energy for ₹1.27 crore

scanx.trade, 04 Oct

Bharat Gears Share Price Target 2026: Rs 135 Analyst Forecast

Univest, 09 JunAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Bharat Gears Limited (NSE:BHARATGEAR) Pays A ₹1.00 Dividend In Just Three Days

Simply Wall Street, 02 AugCapital return

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

Bharat Gears Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 31 Aug

Bharat Gears FY26 net profit jumps to ₹1,650.41 lakhs

scanx.trade, 01 JunResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Watch Items

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

DalalBaazaar Thesis

StrongFinancial Health · Valuation

MiddlingBusiness Quality

WeakGrowth · Profitability · Risk

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. 1 high-severity red flag sits above this conclusion and should be read first.

2 of 5 tripwires tripped — Interest cover stays above 3x; Revenue growth stays above 4% a year · see Key things to watch ↑