CLN Energy Limited

Consumer Cyclical — Auto Parts · BSE

₹481.00−₹2.50 (−0.52%)

DalalBaazaar Score

66 / 100

🟢 Good

Verdict

REASONABLE

Risk

High

Driven by moderate debt load, 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. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:06 pm

Mixed / neutral. No major red flags jump out, but nothing here screams "obviously cheap" either. This is a name that needs a peer comparison and a view on near-term earnings triggers before sizing a position.

Understanding the Business

Company site ↗

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

What does this company do?

CLN Energy Limited provides battery energy storage solutions in India. It offers lithium batteries for two-, three-, and four-wheeler electric vehicle; material handling equipment; electric tractors; and golf carts, as well as chargers.

IndustryAuto Parts

SectorConsumer Cyclical

Employees184

Annual revenue₹346 Cr

How does it make money?

Turns over ₹346 Cr a year. Of every ₹100 of sales, about ₹6 reaches shareholders as profit, with ₹12 left at the operating level before interest, tax and depreciation. Each of its 184 employees supports ₹1.88 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin12.2%

Net margin5.9%

Revenue / employee₹1.88 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.

BOSCH LIMITEDP/E 56.9x · ROE 15.9%

MARUTI SUZUKI INDIA LTD.P/E 25.2x · ROE 13.4%

TVS MOTOR COMPANY LTDP/E 56.8x · ROE 35.8%

EICHER MOTORS LTDP/E 34.7x · ROE 23.0%

What is its competitive advantage?Some evidence

ROCE of 30.5% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

ROCE30.5%

ROE19.6%

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 +169% while net margin moved +947% 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+169%

Margin effect+947%

DalalBaazaar Score

66/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

73/ 100

Good

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

Valuation

70/ 100

Cheap

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

A good business currently available at an undemanding price — the combination this framework is built to look for.

Historical Valuation

Current P/E

24.7x

2Y Median

30.3x

23 monthly readings · mean 32.9x · range 16.8x–59.7x

Sector Median

45.7x

median of 4 sector peers

🟢Current valuation is approximately 19% below its 2y median of 30.3x. 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 46% below the peer median of 45.7x.

vs. its own history

Fair

30.3x median over 23 months · -19%

vs. sector peers

Cheap

45.7x median of 4 peers · -46%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

24.7x

P/B

4.41x

EV/EBITDA

13.8x

PEG

0.12

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 10.5% to 12.2% over 3 years.
Return on capital is rising
ROCE has improved from 2.7% to 30.5%.
High return on capital employed
ROCE of 30.5% 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

Free cash flow is negative
The business is not currently covering its capital spending from operations.
Receivables growing faster than sales
Receivables are up 287% against revenue growth of 169% — customers are taking longer to pay.

Red Flags

3 items require attention · 1 high · 2 watch

🔴Receivables growing faster than salesFinancial
Receivables up 287% against revenue up 169% — sales are being booked faster than they are collected.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 28.2x to 4.5x.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹50 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 30.5% 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 10.5% to 12.2%. 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 46% 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 287% against revenue up 169%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
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

1Revenue growth stays above 29% a year✓ 39.1% CAGR
Latest reported year was 34.8%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 10%✓ 12.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA stays below 2x✗ 2.2x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4Free cash flow remains positive✗ -₹50 Cr
Profit that never becomes cash eventually stops being profit.
5ROCE stays above 28%✓ 30.5%
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

5 good · 5 neutral · 1 weak

Market Cap

₹520 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

24.7x

Fair

Fairly valued against the generic band

P/B Ratio

4.41x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹19.5

Profitable

Profitable on a per-share basis

ROE

19.6%

Strong

Strong capital efficiency

ROCE

30.5%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.81x

Moderate

Moderate leverage

Revenue Growth (YoY)

34.8%

Healthy

Healthy top-line growth

Profit Growth (YoY)

31.4%

Healthy

Profits growing at a healthy clip

Dividend Yield

None

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

Free Cash Flow

-₹63 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹481

ROA

8.5%

Good

Assets are working hard

Operating Margin

8.7%

Average

Average margins

Net Margin

5.9%

Average

Average bottom-line conversion

Current Ratio

1.65

Comfortable

Healthy short-term liquidity

52W Range Position

65%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

483.1 / 504.0

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

44.5

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹129 Cr	₹132 Cr	₹219 Cr	₹346 Cr	+39.1%
EBITDA	₹13 Cr	₹19 Cr	₹25 Cr	₹42 Cr	+46.4%
EBITDA Margin	10.5%	14.2%	11.6%	12.2%	—
PAT (Net Profit)	₹1 Cr	₹9 Cr	₹13 Cr	₹21 Cr	+204.4%
EPS	₹0.69	₹8.91	₹15.87	—	—
ROE	20.3%	70.3%	13.7%	17.9%	—
ROCE	2.7%	30.0%	20.5%	30.5%	—
Total Debt	—	—	₹16 Cr	₹93 Cr	—
Free Cash Flow	₹1 Cr	₹2 Cr	-₹74 Cr	-₹50 Cr	—

🟢 Revenue has grown at 39.1% a year over 3 years.

🟢 EBITDA has grown at 46.4% a year over 3 years.

🟢 EBITDA Margin has risen from 10.5% to 12.2% over 3 years (+1.7 pts).

🟢 PAT (Net Profit) has grown at 204.4% a year over 3 years.

🔴 ROE has fallen from 20.3% to 17.9% over 3 years (-2.5 pts).

🟢 ROCE has risen from 2.7% to 30.5% over 3 years (+27.8 pts).

🔴 Free Cash Flow has turned negative, from ₹1 Cr to -₹50 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹255 Cr

Total Liabilities

₹140 Cr

Total Debt

₹93 Cr

Cash & Equivalents

₹30 Cr

Operating Cash Flow

-₹46 Cr

Capex

-₹4 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

88.3%

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

6 general

CLN Energy discloses Singapore legal proceedings against chairman Rajiv Seth

scanx.trade, 17 Oct

CLN ENERGY LIMITED Share Price

Upstox, 05 May

CLN Energy Ltd Key Financial Ratios – Valuation, Profitability & More

Value Research, 30 Aug

CLN Energy Limited (BSE:CLN): Understanding Its Operations, Industry Role and Business Risks

Kalkine India, 14 Sept

CLN Energy allots 2.5 lakh shares to promoter at ₹423 per share

scanx.trade, 05 Oct

Here's why CLN Energy share price hit all-time high today; details here

Business Standard, 02 Jul

Watch Items

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

DalalBaazaar Thesis

🟢Business QualityStrong13.9/20

🟡Financial HealthAdequate11.8/20

🟢GrowthStrong18.5/20

🟢ProfitabilityStrong10.2/15

🟡ValuationFair9.3/15

🔴RiskHigh2.5/10

Attractive on both counts

A good business currently available at an undemanding price — the combination this framework exists to look for. The work left is qualitative: whether the advantage the numbers imply is one you can identify and expect to last. 1 high-severity red flag sits above this conclusion and should be read first.

This thesis breaks if

✓Revenue growth stays above 29% a year39.1% CAGR
✓EBITDA margin holds above 10%12.2%
✗Debt / EBITDA stays below 2x2.2x
✗Free cash flow remains positive-₹50 Cr
✓ROCE stays above 28%30.5%