Duncan Engineering Limited

Industrials — Specialty Industrial Machinery · BSE

₹320.00−₹6.05 (−1.86%)

DalalBaazaar Score

42 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Very High

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

In simple words: The business is earning a fairly low return on the money invested in it, though profits are falling even as sales grow. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:57 pm

Understanding the Business

Company site ↗

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

What does this company do?

Duncan Engineering Limited manufactures, assembles, and trades in fluid power and automation products in India and internationally.

IndustrySpecialty Industrial Machinery

SectorIndustrials

Employees192

Annual revenue₹81 Cr

How does it make money?

Turns over ₹81 Cr a year. Of every ₹100 of sales, about ₹6 reaches shareholders as profit, with ₹10 left at the operating level before interest, tax and depreciation. Each of its 192 employees supports ₹42.0 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹42.0 lakh

Who are its competitors?

The closest listed comparisons in its industry are SIEMENS LTD, ABB INDIA LIMITED, LARSEN & TOUBRO LTD., HAVELLS 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 11.0% 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 ROE17.1%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +15% while net margin moved -57% 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+15%

Margin effect-57%

DalalBaazaar Score

42/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue CAGR of only 4.8% — barely ahead of inflation
✗ Profit has declined at 21.1% a year
✗ Profit is compounding slower than revenue — margins are being squeezed as the business grows
✗ Profit fell 25.0% in the latest year

Quality vs. Valuation

Company Quality

38/ 100

Weak

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

Valuation

67/ 100

Fair

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

Weak on business quality and not cheap enough to compensate.

Historical Valuation

Current P/E

26.0x

3Y Median

25.1x

40 monthly readings · mean 24.8x · range 14.8x–38.7x

Sector Median

66.2x

median of 4 sector peers

🟡Currently trading close to its 3y median of 25.1x — the market is paying about what it usually pays for this company.

🟢Against its sector it trades 61% below the peer median of 66.2x.

vs. its own history

Fair

25.1x median over 40 months · +4%

vs. sector peers

Cheap

66.2x median of 4 peers · -61%

vs. generic bands

Fair

15x–35x

EV/EBITDA

14.9x

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 Attention2

Return on equity is falling
ROE has dropped from 21.3% to 8.0% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 27.2% to 11.0% — often a sign of competition or overexpansion.

Red Flags

6 items require attention · 4 high · 2 watch

🔴Debt has risen sharplyFinancial
Total debt is up 223% over 3 years, from ₹1 Cr to ₹5 Cr.
🔴High leverageFinancial
Debt/Equity of 7.89x — earnings must service borrowings before shareholders see anything.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 10.0 points, from 20.3% to 10.2%.
🔴Receivables growing faster than salesFinancial
Receivables up 92% against revenue up 15% — sales are being booked faster than they are collected.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹2 Cr in the latest year.
🟡Profit is decliningFinancial
Net profit is down 51% over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Cheaper than its peers
It trades 61% 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?

Margins are being competed away
EBITDA margin has fallen from 20.3% to 10.2%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Leverage amplifies any setback
Debt/Equity of 7.89x. Interest is payable whether or not the business has a good year.
Sales are being booked faster than collected
Receivables are up 92% against revenue up 15%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Growth barely outpaces inflation
Revenue compounding at 4.8% 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.
Returns on shareholder capital are falling
ROE has dropped from 21.3% to 8.0%. 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.

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

1EBITDA margin holds above 8%✓ 10.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹2 Cr
Profit that never becomes cash eventually stops being profit.
3Revenue growth stays above 4% a year✓ 4.8% CAGR
Latest reported year was 23.1%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
4Debt / EBITDA stays below 2x✓ 0.6x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 8%✓ 11.0%
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

2 good · 5 neutral · 4 weak

Market Cap

₹118 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

26.0x

Fair

Fairly valued against the generic band

P/B Ratio

1.95x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹12.32

Profitable

Profitable on a per-share basis

ROE

8.0%

Weak

Weak capital efficiency

ROCE

11.0%

Moderate

Moderate return on the capital in the business

Debt/Equity

7.89x

High

High leverage

Revenue Growth (YoY)

23.1%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-25.0%

Falling

Profits are shrinking

Dividend Yield

0.94%

Modest

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

Free Cash Flow

-₹2 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

1.5%

Weak

Thin margins leave little room for error

Net Margin

5.4%

Average

Average bottom-line conversion

Current Ratio

3.46

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.66

Defensive

Steadier than the market

52W Range Position

14%

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

323.1 / 343.1

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

38.8

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹70 Cr	₹65 Cr	₹85 Cr	₹81 Cr	+4.8%
EBITDA	₹14 Cr	₹10 Cr	₹8 Cr	₹8 Cr	-16.5%
EBITDA Margin	20.3%	15.0%	9.5%	10.2%	—
PAT (Net Profit)	₹10 Cr	₹7 Cr	₹5 Cr	₹5 Cr	-21.1%
EPS	₹26.8	₹18.6	₹14.1	₹13.15	-21.1%
ROE	21.3%	13.0%	9.2%	8.0%	—
ROCE	27.2%	17.0%	12.5%	11.0%	—
Total Debt	₹1 Cr	₹1 Cr	₹3 Cr	₹5 Cr	+47.8%
Free Cash Flow	₹12 Cr	₹1 Cr	₹4 Cr	-₹2 Cr	—

🟢 Revenue has grown at 4.8% a year over 3 years.

🔴 EBITDA has shrunk at 16.5% a year over 3 years.

🔴 EBITDA Margin has fallen from 20.3% to 10.2% over 3 years (-10.0 pts).

🔴 PAT (Net Profit) has shrunk at 21.1% a year over 3 years.

🔴 EPS has shrunk at 21.1% a year over 3 years.

🔴 ROE has fallen from 21.3% to 8.0% over 3 years (-13.3 pts).

🔴 ROCE has fallen from 27.2% to 11.0% over 3 years (-16.3 pts).

🔴 Total Debt has grown at 47.8% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹12 Cr to -₹2 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹81 Cr

Total Liabilities

₹21 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹1 Cr

Capex

-₹1 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

77.9%

Corporate Actions

Dividend Rate

₹3

Ex-Dividend Date

17 Jul 2026

Peer Comparison

Company	P/E	ROE
SIEMENS LTD	88.8x	10.5%
ABB INDIA LIMITED	92.6x	19.1%
LARSEN & TOUBRO LTD.	30.1x	15.2%
HAVELLS INDIA LIMITED	43.5x	17.1%

Recent News

1 positive3 mixed2 general

Duncan Engineering Share Price Rise Backed by Fundamentals

Univest, 12 OctPrice 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.

Duncan Engineering Ltd. Financials – Balance Sheet, Profit & Loss, Cash Flow

Value Research, 30 Aug

Duncan Engineering secures Rs 6-cr order from BPCL

Business Standard, 25 JunOrder win

🟢Potentially positiveAn order or contract win, which adds to future revenue. How much depends on its size against annual sales and on when it is executed.

Duncan Engineering Share Price and Valuation After Drop

Univest, 05 OctPrice 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.

Duncan Engineering Schedules Board Meeting on May 16, 2026 to Approve Q4FY26 Audited Financial Results

scanx.trade, 16 MayResults

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

Duncan Engineering Share Price Near Low, Stock Analysis

Univest, 21 Sept

Watch Items

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

DalalBaazaar Thesis

MiddlingFinancial Health · Valuation · Risk

WeakBusiness Quality · Growth · Profitability

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. 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 ↑