Harish Textile Engineers Limited

Industrials — Specialty Industrial Machinery · BSE

₹58.25−₹3.33 (−5.41%)

DalalBaazaar Score

56 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Very High

Driven by high debt relative to equity, short-term liabilities exceed short-term assets, micro-cap size, which brings thin liquidity.

In simple words: Strong business and financial position, with modest growth. Debt is the main factor to watch.

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 Harish Textile Engineers Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Harish Textile Engineers Limited engages in the manufacture of textile machines in India.

IndustrySpecialty Industrial Machinery

SectorIndustrials

Annual revenue₹138 Cr

How does it make money?

Turns over ₹138 Cr a year. Of every ₹100 of sales, about ₹4 reaches shareholders as profit, with ₹10 left at the operating level before interest, tax and depreciation.

EBITDA margin10.3%

Net margin4.0%

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.

SIEMENS LTDP/E 88.8x · ROE 10.5%

ABB INDIA LIMITEDP/E 92.6x · ROE 19.1%

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

HAVELLS INDIA LIMITEDP/E 43.5x · ROE 17.1%

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

ROCE has stayed above 15% in every year available and stands at 66.3%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 38.4% against a peer median of 17.1% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

ROCE66.3%

ROE38.4%

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 +19% while net margin moved -14366% 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+19%

Margin effect-14366%

DalalBaazaar Score

56/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ High leverage magnifies any downturn in earnings
✗ Profits have swung sharply from year to year — earnings are hard to forecast

Quality vs. Valuation

Company Quality

54/ 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

3.7x

1.3Y Median

89.2x

16 monthly readings · mean 67.8x · range 3.5x–96.3x

Sector Median

66.2x

median of 4 sector peers

🟢Current valuation is approximately 96% below its 1.3y median of 89.2x. 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 94% below the peer median of 66.2x.

vs. its own history

Cheap

89.2x median over 16 months · -96%

vs. sector peers

Cheap

66.2x median of 4 peers · -94%

vs. generic bands

Cheap

Below 15x

P/E (Trailing)

3.7x

P/B

—

EV/EBITDA

3.4x

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well6

Margins are improving
EBITDA margin is up from 6.0% to 10.3% over 3 years.
Debt is being paid down
Total debt is down 24% over 3 years.
Return on equity is rising
ROE has improved from -0.4% to 38.4%.
Return on capital is rising
ROCE has improved from 19.6% to 66.3%.
High return on capital employed
ROCE of 66.3% is the mark of a business that converts capital into profit efficiently.
Valuation below its historical average
At 3.7x the stock trades 96% below its own median of 89.2x.

🔴 What Needs Attention2

Receivables growing faster than sales
Receivables are up 60% against revenue growth of 19% — customers are taking longer to pay.
Short-term liquidity is tight
Current ratio of 0.74 — near-term obligations exceed near-term assets.

Red Flags

4 items require attention · 2 high · 2 watch

🔴High leverageFinancial
Debt/Equity of 2.09x — earnings must service borrowings before shareholders see anything.
🔴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.
🟡Receivables growing faster than salesFinancial
Receivables up 60% against revenue up 19% — sales are being booked faster than they are collected.
🟡Short-term liquidity is tightFinancial
Current ratio of 0.74 — near-term obligations exceed near-term assets.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 66.3% 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.
Margin expansion has further to run
EBITDA margin has risen from 6.0% to 10.3%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Deleveraging frees up earnings
Debt is down 24% 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 96% 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 94% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.

🔴 Bear CaseWhat could go wrong?

Leverage amplifies any setback
Debt/Equity of 2.09x. Interest is payable whether or not the business has a good year.
Sales are being booked faster than collected
Receivables are up 60% against revenue up 19%. 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 6.0% 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.
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

1EBITDA margin holds above 8%✓ 10.3%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA stays below 2x✗ 2.1x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
3Interest cover stays above 3x✓ 3.2x
How much operating profit can fall before interest stops being comfortably covered.
4Revenue growth stays above 4% a year✓ 6.0% CAGR
Latest reported year was 5.0%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
5Free cash flow remains positive✓ ₹6 Cr
Profit that never becomes cash eventually stops being profit.

Investment Checklist

7 / 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

₹19 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

3.7x

Cheap

Cheap against the generic band

P/B Ratio

Not available

No data

Source didn't return this field

EPS (TTM)

₹15.87

Profitable

Profitable on a per-share basis

ROE

38.4%

Strong

Strong capital efficiency

ROCE

66.3%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

2.09x

High

High leverage

Revenue Growth (YoY)

5.0%

Modest

Modest growth

Profit Growth (YoY)

2251.6%

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

₹6 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹58.25

Operating Margin

0.0%

Weak

Thin margins leave little room for error

Net Margin

0.0%

Weak

Very little revenue reaches the bottom line

Current Ratio

0.74

Tight

Tight short-term liquidity

52W Range Position

25%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

64.9 / 65.3

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

41.5

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹116 Cr	₹131 Cr	₹132 Cr	₹138 Cr	+6.0%
EBITDA	₹7 Cr	₹10 Cr	₹9 Cr	₹14 Cr	+26.6%
EBITDA Margin	6.0%	7.5%	6.8%	10.3%	—
PAT (Net Profit)	-₹0 Cr	-₹0 Cr	₹0 Cr	₹6 Cr	—
EPS	₹-0.1	₹-1.12	₹0.71	₹16.6	—
ROE	-0.4%	-4.3%	2.6%	38.4%	—
ROCE	19.6%	30.1%	37.1%	66.3%	—
Total Debt	₹40 Cr	₹36 Cr	₹32 Cr	₹30 Cr	-8.9%
Free Cash Flow	₹5 Cr	₹9 Cr	₹8 Cr	₹6 Cr	+4.0%

🟢 Revenue has grown at 6.0% a year over 3 years.

🟢 EBITDA has grown at 26.6% a year over 3 years.

🟢 EBITDA Margin has risen from 6.0% to 10.3% over 3 years (+4.3 pts).

🟢 PAT (Net Profit) has turned positive, from -₹0 Cr to ₹6 Cr.

🟢 EPS has turned positive, from ₹-0.1 to ₹16.6.

🟢 ROE has risen from -0.4% to 38.4% over 3 years (+38.7 pts).

🟢 ROCE has risen from 19.6% to 66.3% over 3 years (+46.8 pts).

🟢 Total Debt has shrunk at 8.9% a year over 3 years.

🟢 Free Cash Flow has grown at 4.0% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹80 Cr

Total Liabilities

₹66 Cr

Total Debt

₹30 Cr

Cash & Equivalents

₹1 Cr

Operating Cash Flow

₹7 Cr

Capex

-₹2 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

65.0%

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 negative5 general

Harish Textile Engineers sets September 30 for 16th AGM with key governance votes

scanx.trade, 30 Sept

Harish Textile Engineers Ltd. Key Financial Ratios – Valuation, Profitability & More

Value Research, 30 Aug

Harish Textile Engineers Ltd Downgraded to Sell Amid Mixed Financial and Technical Signals

MarketsMojo, 07 OctAnalyst view

🔴Potentially negativeAn analyst opinion changing, which moves the price without changing the business.

Harish Textile Engineers Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 31 Aug

Harish Textile Engineers passes all AGM resolutions, approves RPTs

scanx.trade, 30 Sept

Harish Textile Engineers Ltd

Equitypandit, 19 Oct

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

🟡Business QualityAdequate11.1/20

🟡Financial HealthAdequate10.8/20

🔴GrowthWeak7.6/20

🟢ProfitabilityStrong10.6/15

🟢ValuationAttractive13.4/15

🔴RiskHigh2.4/10

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

✓EBITDA margin holds above 8%10.3%
✗Debt / EBITDA stays below 2x2.1x
✓Interest cover stays above 3x3.2x
✓Revenue growth stays above 4% a year6.0% CAGR
✓Free cash flow remains positive₹6 Cr