Hardcastle and Waud Manufacturing Company Limited

Industrials — Conglomerates · BSE

₹816.70−₹15.65 (−1.88%)

DalalBaazaar Score

66 / 100

🟢 Good

Verdict

REASONABLE

Risk

Moderate

Driven by 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, 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, 8:27 pm

Understanding the Business

Company site ↗

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

What does this company do?

Hardcastle and Waud Manufacturing Company Limited engages in chemical activities in India. It operates through Industrial Chemicals, Investing, and Leasing Activities segments. The company also engages in investment activities; and trades in industrial chemicals.

IndustryConglomerates

SectorIndustrials

Employees4

Annual revenue₹7 Cr

How does it make money?

Turns over ₹7 Cr a year. Of every ₹100 of sales, about ₹70 reaches shareholders as profit, with ₹23 left at the operating level before interest, tax and depreciation. Each of its 4 employees supports ₹1.77 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.77 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.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 2.6% 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 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 +145% while net margin moved +83% 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+145%

Margin effect+83%

DalalBaazaar Score

66/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.55 — historically steadier than the index
✗ 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

65/ 100

Good

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

Valuation

77/ 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

10.6x

3Y Median

30.5x

40 monthly readings · mean 31.4x · range 11.2x–80.9x

Sector Median

88.8x

median of 3 sector peers

🟢Current valuation is approximately 65% below its 3y median of 30.5x. 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 88% below the peer median of 88.8x.

vs. its own history

Cheap

30.5x median over 40 months · -65%

vs. sector peers

Cheap

88.8x median of 3 peers · -88%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

33.3x

PEG

0.16

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 18.2% to 23.2% over 3 years.
Return on equity is rising
ROE has improved from 2.6% to 9.7%.
Return on capital is rising
ROCE has improved from 0.2% to 2.6%.
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

🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹4 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 18.2% to 23.2%. 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 65% 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 88% 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?

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 26% a year✓ 34.9% CAGR
Latest reported year was 24.0%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 21%✓ 23.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹4 Cr
Profit that never becomes cash eventually stops being profit.
4ROCE stays above 8%✗ 2.6%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Valuation vs its own median of 30.5x✓ 10.6x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

6 / 10 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✓ 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 · 4 neutral · 2 weak

Market Cap

₹55 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

10.6x

Cheap

Cheap against the generic band

P/B Ratio

1.09x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹76.99

Profitable

Profitable on a per-share basis

ROE

9.7%

Moderate

Moderate capital efficiency

ROCE

2.6%

Weak

Low return on total capital employed

Debt/Equity

Not available

No data

Source didn't return this field

Revenue Growth (YoY)

24.0%

Healthy

Healthy top-line growth

Profit Growth (YoY)

38.8%

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

-₹4 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

50.0%

Good

Healthy core-business profitability

Net Margin

47.2%

Good

Strong bottom-line conversion

Current Ratio

4.33

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.55

Defensive

Steadier than the market

52W Range Position

48%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

831.8 / 840.1

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

45.0

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹3 Cr	₹4 Cr	₹4 Cr	₹7 Cr	+34.9%
EBITDA	₹1 Cr	₹2 Cr	₹1 Cr	₹2 Cr	+46.3%
EBITDA Margin	18.2%	39.3%	22.0%	23.2%	—
PAT (Net Profit)	₹1 Cr	₹3 Cr	₹1 Cr	₹5 Cr	+65.1%
EPS	₹16.13	₹37.94	₹18.94	₹72.59	+65.1%
ROE	2.6%	5.8%	2.8%	9.7%	—
ROCE	0.2%	3.6%	2.1%	2.6%	—
Free Cash Flow	-₹4 Cr	₹3 Cr	-₹1 Cr	-₹4 Cr	—

🟢 Revenue has grown at 34.9% a year over 3 years.

🟢 EBITDA has grown at 46.3% a year over 3 years.

🟢 EBITDA Margin has risen from 18.2% to 23.2% over 3 years (+5.0 pts).

🟢 PAT (Net Profit) has grown at 65.1% a year over 3 years.

🟢 EPS has grown at 65.1% a year over 3 years.

🟢 ROE has risen from 2.6% to 9.7% over 3 years (+7.1 pts).

🟢 ROCE has risen from 0.2% to 2.6% over 3 years (+2.4 pts).

Balance Sheet & Cash Flow — FY2026

Total Assets

₹54 Cr

Total Liabilities

₹3 Cr

Total Debt

—

Cash & Equivalents

₹1 Cr

Operating Cash Flow

-₹4 Cr

Capex

—

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

84.0%

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

1 mixed5 general

Hardcastle & Waud Manufacturing Company Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 30 Aug

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Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
1 metric couldn't be retrieved for this stock — this is more common for smaller or thinly-covered listings.

DalalBaazaar Thesis

StrongBusiness Quality · Growth · Profitability · Valuation

MiddlingFinancial Health

WeakRisk

Points for each in the Score ↑

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.

2 of 5 tripwires tripped — Free cash flow remains positive; ROCE stays above 8% · see Key things to watch ↑