Emmforce Autotech Limited

Consumer Cyclical — Auto Parts · BSE

₹195.70+₹0.70 (+0.36%)

DalalBaazaar Score

53 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

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

In simple words: Reasonable but unspectacular business quality, though profits are falling even as sales grow. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:03 pm

Caution warranted. Multiple fundamental metrics — flagged in red below — point to either valuation stretch, leverage risk, or weakening profitability. This doesn't mean avoid the stock outright, but it does mean the burden of proof is on the growth story to justify the current price.

Understanding the Business

Company site ↗

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

What does this company do?

Emmforce Autotech Limited manufactures and sells automotive drivetrain parts in India and internationally.

IndustryAuto Parts

SectorConsumer Cyclical

Employees231

Annual revenue₹111 Cr

How does it make money?

Turns over ₹111 Cr a year. Of every ₹100 of sales, about ₹7 reaches shareholders as profit, with ₹21 left at the operating level before interest, tax and depreciation. Each of its 231 employees supports ₹47.9 lakh of revenue a year, the signature of a people-led business.

EBITDA margin20.5%

Net margin7.5%

Revenue / employee₹47.9 lakh

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?Little sign of one

Returns on capital of 13.1% 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.

ROCE13.1%

ROE9.6%

Peer median ROE23.0%

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 +142% while net margin moved -22% 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+142%

Margin effect-22%

DalalBaazaar Score

53/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROE of 9.6% is weak
✗ ROE has fallen by 9.7 points over the period

Quality vs. Valuation

Company Quality

56/ 100

Average

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

Valuation

48/ 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

48.7x

3Y Median

45.8x

32 monthly readings · mean 48.8x · range 24.7x–91.3x

Sector Median

45.7x

median of 4 sector peers

🟡Currently trading close to its 3y median of 45.8x — the market is paying about what it usually pays for this company.

🟡Against its sector it is priced broadly in line with the peer median of 45.7x.

vs. its own history

Fair

45.8x median over 32 months · +6%

vs. sector peers

Fair

45.7x median of 4 peers · +6%

vs. generic bands

Expensive

Above 35x

P/E (Trailing)

48.7x

P/B

4.37x

EV/EBITDA

19.6x

PEG

2.08

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well1

Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention6

Margins are compressing
EBITDA margin has slipped from 24.2% to 20.5% over 3 years.
Debt is rising
Total debt is up 187% over 3 years — worth checking what it funded.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Return on equity is falling
ROE has dropped from 18.7% to 9.0% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 30.7% to 13.1% — often a sign of competition or overexpansion.
Inventory building faster than sales
Inventory is up 181% against revenue growth of 142% — stock may not be moving.

Red Flags

4 items require attention · 2 high · 2 watch

🔴Debt has risen sharplyFinancial
Total debt is up 187% over 3 years, from ₹15 Cr to ₹44 Cr.
🔴Free cash flow negative for 3 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🟡Margins are compressingFinancial
EBITDA margin is down 3.7 points over 3 years.
🟡Inventory building faster than salesFinancial
Inventory up 181% against revenue up 142% — stock may not be moving.

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 24.2% to 20.5%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Returns on shareholder capital are falling
ROE has dropped from 18.7% to 9.0%. 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.
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

1Revenue growth stays above 26% a year✓ 34.3% CAGR
Latest reported year was 12.5%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 19%✓ 20.5%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹18 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.9x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 10%✓ 13.1%
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

3 good · 5 neutral · 3 weak

Market Cap

₹401 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

48.7x

Expensive

Expensive — verify against sector peers

P/B Ratio

4.37x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹4.02

Profitable

Profitable on a per-share basis

ROE

9.6%

Moderate

Moderate capital efficiency

ROCE

13.1%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.48x

Low

Conservative leverage

Revenue Growth (YoY)

12.5%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-10.6%

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

CMP

₹195.7

ROA

6.4%

Average

Average asset productivity

Operating Margin

11.3%

Average

Average margins

Net Margin

7.3%

Average

Average bottom-line conversion

Current Ratio

1.74

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.01

Defensive

Steadier than the market

52W Range Position

92%

Near high

Near its 52-week high

Technical Snapshot

SMA 20 / SMA 50

187.0 / 185.5

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

59.2

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹46 Cr	₹41 Cr	₹86 Cr	₹111 Cr	+34.3%
EBITDA	₹11 Cr	₹8 Cr	₹18 Cr	₹23 Cr	+27.1%
EBITDA Margin	24.2%	18.5%	20.6%	20.5%	—
PAT (Net Profit)	₹4 Cr	₹4 Cr	₹8 Cr	₹8 Cr	+23.4%
EPS	₹2.14	₹1.99	₹3.93	—	—
ROE	18.7%	21.2%	10.1%	9.0%	—
ROCE	30.7%	19.8%	14.0%	13.1%	—
Total Debt	₹15 Cr	₹28 Cr	₹35 Cr	₹44 Cr	+42.2%
Free Cash Flow	₹6 Cr	-₹58 Cr	-₹37 Cr	-₹18 Cr	—

🟢 Revenue has grown at 34.3% a year over 3 years.

🟢 EBITDA has grown at 27.1% a year over 3 years.

🔴 EBITDA Margin has fallen from 24.2% to 20.5% over 3 years (-3.7 pts).

🟢 PAT (Net Profit) has grown at 23.4% a year over 3 years.

🔴 ROE has fallen from 18.7% to 9.0% over 3 years (-9.7 pts).

🔴 ROCE has fallen from 30.7% to 13.1% over 3 years (-17.6 pts).

🔴 Total Debt has grown at 42.2% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹6 Cr to -₹18 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹155 Cr

Total Liabilities

₹64 Cr

Total Debt

₹44 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

₹5 Cr

Capex

-₹23 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

74.5%

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

Emmforce Autotech Share Price update with sector analysis

Univest, 15 Oct

Emmforce Autotech management to attend GIA Flagship Conference 2026

scanx.trade, 14 Oct

EMMFORCE AUTOTECH LIMITED Share Price

Upstox, 05 May

Emmforce Autotech Ltd. Upper Circuit Streak: Day 2 Price and Data

Univest, 29 Sept

Emmforce Autotech to host non-deal roadshow on August 14

scanx.trade, 05 Aug

Emmforce Autotech IPO: Price band, issue size, key dates, other details to know

Livemint, 12 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

🟡Business QualityAdequate10.3/20

🟢Financial HealthStrong13/20

🟡GrowthModest12.9/20

🔴ProfitabilityWeak5.8/15

🟡ValuationFair6.9/15

🟡RiskModerate4.5/10

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. 2 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓Revenue growth stays above 26% a year34.3% CAGR
✓EBITDA margin holds above 19%20.5%
✗Free cash flow remains positive-₹18 Cr
✓Debt / EBITDA stays below 2x1.9x
✓ROCE stays above 10%13.1%