Everest Kanto Cylinder Limited

Industrials — Specialty Industrial Machinery · NSE

₹103.60+₹0.95 (+0.93%)

DalalBaazaar Score

62 / 100

🟢 Good

Verdict

NEUTRAL

Risk

Moderate

Driven by negative free cash flow, micro-cap size, which brings thin liquidity, falling profits.

In simple words: Reasonable but unspectacular business quality, but sales are shrinking. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:47 pm

Understanding the Business

Company site ↗

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

What does this company do?

Everest Kanto Cylinder Limited, together with its subsidiaries, engages in the manufacture and sale of high-pressure seamless gas cylinders and other cylinders in India, the United Arab Emirates, the United States, Hungary, and internationally.

IndustrySpecialty Industrial Machinery

SectorIndustrials

Employees833

Annual revenue₹1,449 Cr

How does it make money?

Turns over ₹1,449 Cr a year. Of every ₹100 of sales, about ₹10 reaches shareholders as profit, with ₹16 left at the operating level before interest, tax and depreciation. Each of its 833 employees supports ₹1.74 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.74 Cr

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 10.7% 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 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 +68% 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+68%

DalalBaazaar Score

62/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.63 — historically steadier than the index
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

59/ 100

Average

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

Valuation

88/ 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

9.3x

3Y Median

16.7x

40 monthly readings · mean 16.1x · range 7.9x–24.9x

Sector Median

66.2x

median of 4 sector peers

🟢Current valuation is approximately 44% below its 3y median of 16.7x. 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 86% below the peer median of 66.2x.

vs. its own history

Cheap

16.7x median over 40 months · -44%

vs. sector peers

Cheap

66.2x median of 4 peers · -86%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

6.2x

PEG

0.38

What's Good / What's Bad

🟢 What's Going Well3

Margins are improving
EBITDA margin is up from 13.8% to 15.5% over 3 years.
Very low debt
Debt/Equity of 0.19x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

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

Red Flags

2 items require attention · 1 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 124% over 3 years, from ₹119 Cr to ₹267 Cr.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹32 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 13.8% to 15.5%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 44% 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 86% 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?

Growth barely outpaces inflation
Revenue compounding at 4.7% 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.
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 14%✓ 15.5%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹32 Cr
Profit that never becomes cash eventually stops being profit.
3Revenue growth stays above 4% a year✓ 4.7% CAGR
Latest reported year was -10.5%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
4Debt / EBITDA stays below 2x✓ 1.2x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 8%✓ 10.7%
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

4 good · 4 neutral · 3 weak

Market Cap

₹1,162 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

9.3x

Cheap

Cheap against the generic band

P/B Ratio

0.83x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹11.12

Profitable

Profitable on a per-share basis

ROE

10.5%

Moderate

Moderate capital efficiency

ROCE

10.7%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.19x

Low

Conservative leverage

Revenue Growth (YoY)

-10.5%

Shrinking

Sales are contracting

Profit Growth (YoY)

-41.7%

Falling

Profits are shrinking

Dividend Yield

0.68%

Modest

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

Free Cash Flow

-₹32 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

6.5x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

9.4%

Average

Average margins

Net Margin

8.8%

Average

Average bottom-line conversion

Current Ratio

3.74

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.63

Defensive

Steadier than the market

52W Range Position

21%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

105.2 / 107.0

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

30.5

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1,260 Cr	₹1,201 Cr	₹1,470 Cr	₹1,449 Cr	+4.7%
EBITDA	₹174 Cr	₹174 Cr	₹190 Cr	₹225 Cr	+8.9%
EBITDA Margin	13.8%	14.4%	12.9%	15.5%	—
PAT (Net Profit)	₹76 Cr	₹99 Cr	₹98 Cr	₹147 Cr	+24.5%
EPS	₹6.79	₹8.84	₹8.73	₹13.09	+24.5%
ROE	7.6%	9.0%	8.1%	10.5%	—
ROCE	10.0%	10.9%	10.7%	10.7%	—
Total Debt	₹119 Cr	₹65 Cr	₹170 Cr	₹267 Cr	+30.8%
Free Cash Flow	₹23 Cr	₹160 Cr	-₹63 Cr	-₹32 Cr	—

🟢 Revenue has grown at 4.7% a year over 3 years.

🟢 EBITDA has grown at 8.9% a year over 3 years.

🟢 EBITDA Margin has risen from 13.8% to 15.5% over 3 years (+1.7 pts).

🟢 PAT (Net Profit) has grown at 24.5% a year over 3 years.

🟢 EPS has grown at 24.5% a year over 3 years.

🟢 ROE has risen from 7.6% to 10.5% over 3 years (+2.9 pts).

🟡 ROCE has held roughly flat at 10.7% over 3 years.

🔴 Total Debt has grown at 30.8% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹23 Cr to -₹32 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1,894 Cr

Total Liabilities

₹494 Cr

Cash & Equivalents

₹36 Cr

Operating Cash Flow

₹142 Cr

Capex

-₹173 Cr

Shareholding (proxy)

Institutional Holding

0.2%

Insider Holding

67.6%

Corporate Actions

Dividend Rate

₹0.7

Ex-Dividend Date

18 Sept 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 positive1 mixed4 general

Why Is Everest Kanto Cylinder Share Price Falling Key Reasons 2026

Univest, 22 JunPrice 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.

Everest Kanto Cylinder Limited Actuals & Estimates (NSE:EKC)

TradingView, 25 Jun

Compare Raymond with Everest Kanto Cylinder

Equitymaster, 11 Oct

EKC posts FY26 net profit of ₹146.7 crore, Q4 profit surges

scanx.trade, 27 MayResults

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

CARE Ratings reaffirms ratings of Everest Kanto Cylinder at 'A-/A2+'

Business Standard, 29 Sept

Everest Kanto Cylinder: Best Stock in Its Sector? Key Metrics

Univest, 25 Sept

Watch Items

Revenue growth is negative (-10.5%) 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

StrongFinancial Health · Valuation

MiddlingBusiness Quality · Growth · Profitability

WeakRisk

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.

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