Chandni Machines Limited

Industrials — Industrial Distribution · BSE

₹103.25+₹0.24 (+0.23%)

DalalBaazaar Score

39 / 100

🔴 Weak

Verdict

CAUTION

Risk

Very High

Driven by high debt relative to equity, negative free cash flow, the company is currently loss-making.

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, 7:00 pm

Understanding the Business

Company site ↗

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

What does this company do?

Chandni Machines Limited engages in the trading of engineering goods in India.

IndustryIndustrial Distribution

SectorIndustrials

Employees13

Annual revenue₹26 Cr

How does it make money?

Turns over ₹26 Cr a year. Of every ₹100 of sales, about ₹3 reaches shareholders as profit, with ₹-2 left at the operating level before interest, tax and depreciation. Each of its 13 employees supports ₹2.00 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹2.00 Cr

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?Little sign of one

Returns on capital of 3.7% 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 ROE15.2%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -50% while net margin moved +316% 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-50%

Margin effect+316%

DalalBaazaar Score

39/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ ROE of 2.2% is weak

Quality vs. Valuation

Company Quality

40/ 100

Weak

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

Valuation

29/ 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

—

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 Attention1

Return on capital is falling
ROCE has declined from 6.6% to 3.7% — often a sign of competition or overexpansion.

Red Flags

5 items require attention · 2 high · 3 watch

🔴Debt has risen sharplyFinancial
Total debt is up 327% over 3 years, from ₹1 Cr to ₹2 Cr.
🔴High leverageFinancial
Debt/Equity of 6.55x — earnings must service borrowings before shareholders see anything.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹19 Cr in the latest year.
🟡Margins are compressingFinancial
EBITDA margin is down 3.8 points over 3 years.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 118% over 3 years — each existing share owns a smaller slice of the company.

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?

Margins are being competed away
EBITDA margin has fallen from 1.4% to -2.4%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Leverage amplifies any setback
Debt/Equity of 6.55x. Interest is payable whether or not the business has a good year.
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.
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%✓ -2.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹19 Cr
Profit that never becomes cash eventually stops being profit.
3ROCE stays above 8%✗ 3.7%
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

0 good · 3 neutral · 8 weak

Market Cap

₹73 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

1.79x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹-2.37

Loss-making

Negative earnings per share — the business is losing money

ROE

2.2%

Weak

Weak capital efficiency

ROCE

3.7%

Weak

Low return on total capital employed

Debt/Equity

6.55x

High

High leverage

Revenue Growth (YoY)

-98.3%

Shrinking

Sales are contracting

Profit Growth (YoY)

-48.8%

Falling

Profits are shrinking

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹19 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

-737.7%

Weak

Thin margins leave little room for error

Net Margin

0.0%

Weak

Very little revenue reaches the bottom line

Current Ratio

3.10

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

-0.32

Defensive

Steadier than the market

52W Range Position

74%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

101.2 / 100.9

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

57.8

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹52 Cr	₹166 Cr	₹201 Cr	₹26 Cr	-20.5%
EBITDA	₹1 Cr	₹3 Cr	₹3 Cr	-₹1 Cr	—
EBITDA Margin	1.4%	1.7%	1.6%	-2.4%	—
PAT (Net Profit)	₹0 Cr	₹2 Cr	₹1 Cr	₹1 Cr	+27.9%
EPS	₹1.08	₹5.36	₹4.42	₹1.89	+20.5%
ROE	4.9%	19.7%	14.0%	2.2%	—
ROCE	6.6%	26.9%	20.4%	3.7%	—
Total Debt	₹1 Cr	₹0 Cr	₹0 Cr	₹2 Cr	+62.3%
Free Cash Flow	₹0 Cr	₹4 Cr	₹6 Cr	-₹19 Cr	—

🔴 Revenue has shrunk at 20.5% a year over 3 years.

🔴 EBITDA has turned negative, from ₹1 Cr to -₹1 Cr.

🔴 EBITDA Margin has fallen from 1.4% to -2.4% over 3 years (-3.8 pts).

🟢 PAT (Net Profit) has grown at 27.9% a year over 3 years.

🟢 EPS has grown at 20.5% a year over 3 years.

🔴 ROE has fallen from 4.9% to 2.2% over 3 years (-2.8 pts).

🔴 ROCE has fallen from 6.6% to 3.7% over 3 years (-2.9 pts).

🔴 Total Debt has grown at 62.3% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹0 Cr to -₹19 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹41 Cr

Total Liabilities

₹8 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹19 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

44.2%

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 positive5 general

Chandni Machines Revises Record Date to October 29, 2026 for 1:10 Stock Split

EquityBulls, 16 OctCapital return

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

Chandni Machines expands MOA to cover metals, marine, and chemical trades

scanx.trade, 23 Jul

Diversified Trading Companies Penny Stocks 2027: 5 Picks

Univest, 18 Sept

Chandni Machines sets Sept 30 AGM for share split, director changes

scanx.trade, 08 Sept

HFCL Ltd Spikes 4.98%

Business Standard, 19 Jun

October Multibaggers: 5 stocks doubled investors wealth in a month

Business Today, 04 Nov

Watch Items

Revenue growth is negative (-98.3%) on the latest reported period — check if this is one-off or a trend.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

MiddlingFinancial Health · Growth

WeakBusiness Quality · 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 3 tripwires tripped — Free cash flow remains positive; ROCE stays above 8% · see Key things to watch ↑