CFF Fluid Control Limited

Industrials — Aerospace & Defense · BSE

₹1,089.90+₹9.45 (+0.87%)

DalalBaazaar Score

64 / 100

🟢 Good

Verdict

NEUTRAL

Risk

Very High

Driven by high debt relative to equity, negative free cash flow, micro-cap size, which brings thin liquidity.

In simple words: Strong business and financial position, with both sales and profits growing well. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:53 pm

Understanding the Business

Company site ↗

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

What does this company do?

CFF Fluid Control Limited manufactures, overhauls, repairs, and maintains shipboard machinery, combat systems, reference, and test facilities for submarines and surface ships for Indian navy.

IndustryAerospace & Defense

SectorIndustrials

Employees263

Annual revenue₹209 Cr

How does it make money?

Turns over ₹209 Cr a year. Of every ₹100 of sales, about ₹19 reaches shareholders as profit, with ₹28 left at the operating level before interest, tax and depreciation. Each of its 263 employees supports ₹79.4 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹79.4 lakh

Who are its competitors?

The closest listed comparisons in its industry are LARSEN & TOUBRO LTD., SIEMENS LTD, ABB 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?Some evidence

ROCE of 19.6% 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 ROE15.2%

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 +195% while net margin moved +31% 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+195%

Margin effect+31%

DalalBaazaar Score

64/ 100

Good

Weighted across six categories. Every point is explained below.

✗ P/E of 57.1x is demanding — it needs sustained high growth to justify
• P/E is close to its own historical median of 68.1x
✗ P/B of 8.59x is a steep premium to book

Quality vs. Valuation

Company Quality

74/ 100

Good

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

Valuation

54/ 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

57.1x

3Y Median

68.1x

40 monthly readings · mean 69.8x · range 43.4x–155.2x

Sector Median

88.8x

median of 3 sector peers

🟢Current valuation is approximately 16% below its 3y median of 68.1x. 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 36% below the peer median of 88.8x.

vs. its own history

Fair

68.1x median over 40 months · -16%

vs. sector peers

Cheap

88.8x median of 3 peers · -36%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

38.3x

PEG

1.00

What's Good / What's Bad

🟢 What's Going Well3

Margins are improving
EBITDA margin is up from 26.2% to 28.3% over 3 years.
Debt is being paid down
Total debt is down 57% 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 40.6% to 14.7% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 31.0% to 19.6% — often a sign of competition or overexpansion.

Red Flags

4 items require attention · 4 high

🔴High leverageFinancial
Debt/Equity of 7.44x — earnings must service borrowings before shareholders see anything.
🔴Free cash flow negative for 4 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴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.
🔴Receivables growing faster than salesFinancial
Receivables up 850% against revenue up 195% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 19.6% 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 26.2% to 28.3%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Deleveraging frees up earnings
Debt is down 57% 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 36% 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?

Leverage amplifies any setback
Debt/Equity of 7.44x. Interest is payable whether or not the business has a good year.
Sales are being booked faster than collected
Receivables are up 850% against revenue up 195%. 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 40.6% to 14.7%. 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
4 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 33% a year✓ 43.5% CAGR
Latest reported year was 59.6%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 26%✓ 28.3%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹36 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.3x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 17%✓ 19.6%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

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

5 good · 2 neutral · 4 weak

Market Cap

₹2,286 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

57.1x

Expensive

Expensive — verify against sector peers

P/B Ratio

8.59x

Rich

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

EPS (TTM)

₹19.08

Profitable

Profitable on a per-share basis

ROE

18.9%

Strong

Strong capital efficiency

ROCE

19.6%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

7.44x

High

High leverage

Revenue Growth (YoY)

59.6%

Healthy

Healthy top-line growth

Profit Growth (YoY)

90.3%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.14%

Modest

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

Free Cash Flow

-₹42 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

ROA

13.2%

Good

Assets are working hard

Operating Margin

26.7%

Good

Healthy core-business profitability

Net Margin

18.8%

Good

Strong bottom-line conversion

Current Ratio

5.78

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.65

Defensive

Steadier than the market

52W Range Position

92%

Near high

Near its 52-week high

Technical Snapshot

SMA 20 / SMA 50

1078.4 / 1035.9

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

44.2

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹71 Cr	₹107 Cr	₹146 Cr	₹209 Cr	+43.5%
EBITDA	₹18 Cr	₹31 Cr	₹41 Cr	₹59 Cr	+47.3%
EBITDA Margin	26.2%	28.7%	28.2%	28.3%	—
PAT (Net Profit)	₹10 Cr	₹17 Cr	₹24 Cr	₹39 Cr	+57.0%
EPS	₹5.2	₹9.21	₹12.25	₹19.08	+54.2%
ROE	40.6%	13.6%	16.1%	14.7%	—
ROCE	31.0%	19.8%	22.8%	19.6%	—
Total Debt	₹46 Cr	₹23 Cr	₹21 Cr	₹20 Cr	-24.4%
Free Cash Flow	-₹29 Cr	-₹43 Cr	-₹8 Cr	-₹36 Cr	—

🟢 Revenue has grown at 43.5% a year over 3 years.

🟢 EBITDA has grown at 47.3% a year over 3 years.

🟢 EBITDA Margin has risen from 26.2% to 28.3% over 3 years (+2.1 pts).

🟢 PAT (Net Profit) has grown at 57.0% a year over 3 years.

🟢 EPS has grown at 54.2% a year over 3 years.

🔴 ROE has fallen from 40.6% to 14.7% over 3 years (-25.8 pts).

🔴 ROCE has fallen from 31.0% to 19.6% over 3 years (-11.4 pts).

🟢 Total Debt has shrunk at 24.4% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹317 Cr

Total Liabilities

₹51 Cr

Cash & Equivalents

₹44 Cr

Operating Cash Flow

-₹26 Cr

Capex

-₹10 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

72.7%

Corporate Actions

Dividend Rate

₹1.5

Ex-Dividend Date

24 Jul 2026

Peer Comparison

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

Recent News

1 positive1 mixed4 general

CFF Fluid Control Ltd. Share Price News After 8.38% Gain

Univest, 17 Sept

CFF Fluid Control Ltd Key Financial Ratios – Valuation, Profitability & More

Value Research, 30 Aug

CFF Fluid Wins ₹27.85 Crore Mazagon Dock Order; Shares Rise 1.89%

HDFC Sky, 13 AugPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Why Are Insiders Buying This Rs 1,500 Crore Defence Company?

Equitymaster, 12 Jun

CFF Fluid Control fixes record date for FY26 final dividend

scanx.trade, 14 JulCapital return

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

CFF Fluid Control bags ₹78.74 crore Navy equipment contract from Indian Navy; stock up 5%

Alice Blue, 09 Apr

Watch Items

Trading very close to its 52-week high — momentum-driven entries here carry more mean-reversion risk.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongBusiness Quality · Growth · Profitability

MiddlingFinancial Health

WeakValuation · Risk

Points for each in the Score ↑

Good business at a fair price

A sound business at a reasonable valuation. Suitable for a long-term holding, with the valuation and the direction of margins worth watching rather than the business itself. 4 high-severity red flags sit above this conclusion and should be read first.

1 of 5 tripwires tripped — Free cash flow remains positive · see Key things to watch ↑