ESAB India Limited

Industrials — Tools & Accessories · NSE

₹5,430.00−₹49.50 (−0.90%)

DalalBaazaar Score

70 / 100

🟢 Good

Verdict

REASONABLE

Risk

Low

Driven by small-cap size, which brings sharper price swings.

In simple words: Strong business and financial position, with both sales and profits growing well. Nothing on this snapshot stands out as an immediate concern — the usual checks on business quality and management still apply.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:08 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 ESAB India Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

ESAB India Limited manufactures and sells welding and cutting equipment and consumables in India and internationally.

IndustryTools & Accessories

SectorIndustrials

Employees934

Annual revenue₹1,502 Cr

How does it make money?

Turns over ₹1,502 Cr a year. Of every ₹100 of sales, about ₹14 reaches shareholders as profit, with ₹18 left at the operating level before interest, tax and depreciation. Each of its 934 employees supports ₹1.61 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin18.3%

Net margin13.8%

Revenue / employee₹1.61 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.

LARSEN & TOUBRO LTD.P/E 30.1x · ROE 15.2%

SIEMENS LTDP/E 88.8x · ROE 10.5%

ABB INDIA LIMITEDP/E 92.6x · ROE 19.1%

What is its competitive advantage?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 60.8%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 48.1% against a peer median of 15.2% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

ROCE60.8%

ROE48.1%

Peer median ROE15.2%

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 +38% while net margin moved +10% 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+38%

Margin effect+10%

DalalBaazaar Score

70/ 100

Good

Weighted across six categories. Every point is explained below.

• P/E of 37.7x already prices in growth
✓ P/E is 30% below its own historical median of 53.4x — cheap by its own standards
✗ P/B of 19.47x is a steep premium to book

Quality vs. Valuation

Company Quality

74/ 100

Good

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

Valuation

53/ 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

37.7x

3Y Median

53.4x

40 monthly readings · mean 53.2x · range 40.4x–72.5x

Sector Median

88.8x

median of 3 sector peers

🟢Current valuation is approximately 30% below its 3y median of 53.4x. 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 58% below the peer median of 88.8x.

vs. its own history

Cheap

53.4x median over 40 months · -30%

vs. sector peers

Cheap

88.8x median of 3 peers · -58%

vs. generic bands

Expensive

Above 35x

P/E (Trailing)

37.7x

P/B

19.47x

EV/EBITDA

30.3x

PEG

2.50

Dividend Yield

1.84%

What's Good / What's Bad

🟢 What's Going Well5

Debt is being paid down
Total debt is down 16% over 3 years.
Cash generation is improving
Free cash flow is up 56% over 3 years.
High return on capital employed
ROCE of 60.8% is the mark of a business that converts capital into profit efficiently.
Valuation below its historical average
At 37.7x the stock trades 30% below its own median of 53.4x.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention3

Return on equity is falling
ROE has dropped from 52.1% to 48.1% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 67.5% to 60.8% — often a sign of competition or overexpansion.
Receivables growing faster than sales
Receivables are up 67% against revenue growth of 38% — customers are taking longer to pay.

Red Flags

1 item require attention · 1 watch

🟡Receivables growing faster than salesFinancial
Receivables up 67% against revenue up 38% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 60.8% 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.
Deleveraging frees up earnings
Debt is down 16% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Priced below its own history
The stock trades 30% 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 58% 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 67% against revenue up 38%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Returns on shareholder capital are falling
ROE has dropped from 52.1% to 48.1%. 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
Small 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 9% a year✓ 11.4% CAGR
Latest reported year was 19.6%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 16%✓ 18.3%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✓ ₹149 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.0x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 58%✓ 60.8%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

10 / 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

6 good · 4 neutral · 1 weak

Market Cap

₹8,358 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

37.7x

Fair

Fairly valued against the generic band

P/B Ratio

19.47x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹144.18

Profitable

Profitable on a per-share basis

ROE

48.1%

Strong

Strong capital efficiency

ROCE

60.8%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.78x

Moderate

Moderate leverage

Revenue Growth (YoY)

19.6%

Healthy

Healthy top-line growth

Profit Growth (YoY)

37.1%

Healthy

Profits growing at a healthy clip

Dividend Yield

1.84%

Modest

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

Free Cash Flow

₹149 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹5,430

Operating Margin

17.7%

Good

Healthy core-business profitability

Net Margin

14.1%

Good

Strong bottom-line conversion

Current Ratio

2.14

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.38

Defensive

Steadier than the market

52W Range Position

28%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

5525.6 / 5816.0

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

45.2

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1,086 Cr	₹1,239 Cr	₹1,366 Cr	₹1,502 Cr	+11.4%
EBITDA	₹193 Cr	₹234 Cr	₹251 Cr	₹275 Cr	+12.6%
EBITDA Margin	17.7%	18.9%	18.4%	18.3%	—
PAT (Net Profit)	₹136 Cr	₹163 Cr	₹175 Cr	₹207 Cr	+15.1%
EPS	₹88.16	₹105.9	₹113.98	₹134.3	+15.1%
ROE	52.1%	53.3%	48.6%	48.1%	—
ROCE	67.5%	70.1%	63.7%	60.8%	—
Total Debt	₹4 Cr	₹5 Cr	₹4 Cr	₹3 Cr	-5.8%
Free Cash Flow	₹95 Cr	₹113 Cr	₹171 Cr	₹149 Cr	+16.0%

🟢 Revenue has grown at 11.4% a year over 3 years.

🟢 EBITDA has grown at 12.6% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 18.3% over 3 years.

🟢 PAT (Net Profit) has grown at 15.1% a year over 3 years.

🟢 EPS has grown at 15.1% a year over 3 years.

🔴 ROE has fallen from 52.1% to 48.1% over 3 years (-4.0 pts).

🔴 ROCE has fallen from 67.5% to 60.8% over 3 years (-6.7 pts).

🟢 Total Debt has shrunk at 5.8% a year over 3 years.

🟢 Free Cash Flow has grown at 16.0% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹699 Cr

Total Liabilities

₹269 Cr

Total Debt

₹3 Cr

Cash & Equivalents

₹57 Cr

Operating Cash Flow

₹181 Cr

Capex

-₹32 Cr

Shareholding (proxy)

Institutional Holding

13.3%

Insider Holding

74.2%

Corporate Actions

Dividend Rate

₹100

Ex-Dividend Date

23 Jul 2026

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

2 positive1 mixed3 general

Three Days Left To Buy ESAB India Limited (NSE:ESABINDIA) Before The Ex-Dividend Date

Simply Wall Street, 19 JulCapital return

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

ESAB India (ESABINDIA.NS) Holds Near ₹5,518 as Traders Eye ₹5,794 Resistance - Wyckoff Accumulation

siam.in, 28 Sept

Esab India (NSE: ESABINDIA): Financials and Outlook

Kalkine India, 09 Oct

ESAB India Declares ₹25 Dividend; Share Price Falls Over 1%

HDFC Sky, 21 JulCapital return

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

Esab India: Best Stock in Its Sector? Key Metrics

Univest, 25 Sept

ESAB India jumps as Q1 PAT rises 37% YoY

Business Standard, 12 AugResults

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

Watch Items

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

DalalBaazaar Thesis

🟡Business QualityAdequate12.6/20

🟢Financial HealthStrong16.6/20

🟢GrowthStrong16.1/20

🟢ProfitabilityStrong10.4/15

🟡ValuationFair7.9/15

🟢RiskLow6.7/10

Good business at a fair price

A sound business at a reasonable valuation. Suitable for a long-term holding, with the valuation and the direction of margins worth watching rather than the business itself.

This thesis breaks if

✓Revenue growth stays above 9% a year11.4% CAGR
✓EBITDA margin holds above 16%18.3%
✓Free cash flow remains positive₹149 Cr
✓Debt / EBITDA stays below 2x0.0x
✓ROCE stays above 58%60.8%