Hawa Engineers Limited

Industrials — Metal Fabrication · BSE

₹79.00+₹1.40 (+1.80%)

DalalBaazaar Score

65 / 100

🟢 Good

Verdict

REASONABLE

Risk

Moderate

Driven by moderate debt load, micro-cap size, which brings thin liquidity.

In simple words: Strong business and financial position, but sales are shrinking. Whether sales start growing again is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:55 pm

Understanding the Business

Company site ↗

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

What does this company do?

Hawa Engineers Limited manufactures and sells industrial valves primarily in India. It offers gate, globe, check, API, forged steel, ball, butterfly, air, diaphragm, plug, control, manual, and safety valves; and strainers, steam traps, and automation and accessories.

IndustryMetal Fabrication

SectorIndustrials

Employees95

Annual revenue₹106 Cr

How does it make money?

Turns over ₹106 Cr a year. Of every ₹100 of sales, about ₹2 reaches shareholders as profit, with ₹6 left at the operating level before interest, tax and depreciation. Each of its 95 employees supports ₹1.12 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.12 Cr

Who are its competitors?

The closest listed comparisons in its industry are TATA STEEL LIMITED, JSW STEEL LIMITED, HINDALCO INDUSTRIES LTD, VEDANTA 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?Some evidence

ROCE of 17.2% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

Peer median ROE18.7%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +4% while net margin moved +263% 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+4%

Margin effect+263%

DalalBaazaar Score

65/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.54 — 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

Quality vs. Valuation

Company Quality

64/ 100

Average

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

Valuation

69/ 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

15.6x

3Y Median

26.1x

40 monthly readings · mean 36.4x · range 10.1x–94.9x

Sector Median

12.2x

median of 4 sector peers

🟢Current valuation is approximately 40% below its 3y median of 26.1x. 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 28% above the peer median of 12.2x.

vs. its own history

Cheap

26.1x median over 40 months · -40%

vs. sector peers

Expensive

12.2x median of 4 peers · +28%

vs. generic bands

Fair

15x–35x

EV/EBITDA

6.2x

PEG

0.28

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 4.1% to 6.1% over 3 years.
Cash generation is improving
Free cash flow is up 205% over 3 years.
Return on equity is rising
ROE has improved from 4.3% to 11.8%.
Return on capital is rising
ROCE has improved from 13.1% to 17.2%.
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

3 items require attention · 1 high · 2 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.
🟡Debt is increasingFinancial
Total debt is up 26% over 3 years.
🟡Receivables growing faster than salesFinancial
Receivables up 42% against revenue up 4% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 4.1% to 6.1%. 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 40% 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.
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?

The debt load needs earnings to hold up
Debt is 3.4x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Sales are being booked faster than collected
Receivables are up 42% against revenue up 4%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
A premium to the sector to defend
It trades 28% above the peer median. That premium needs a reason that persists, or it closes.
Growth barely outpaces inflation
Revenue compounding at 1.4% 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.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 4%✓ 6.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 3.4x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Interest cover stays above 3x✗ 2.7x
How much operating profit can fall before interest stops being comfortably covered.
4Revenue growth stays above 4% a year✗ 1.4% CAGR
Latest reported year was -3.2%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
5Free cash flow remains positive✓ ₹4 Cr
Profit that never becomes cash eventually stops being profit.

Investment Checklist

8 / 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

5 good · 5 neutral · 1 weak

Market Cap

₹28 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

15.6x

Fair

Fairly valued against the generic band

P/B Ratio

1.25x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹5.07

Profitable

Profitable on a per-share basis

ROE

11.8%

Moderate

Moderate capital efficiency

ROCE

17.2%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.97x

Moderate

Moderate leverage

Revenue Growth (YoY)

-3.2%

Shrinking

Sales are contracting

Profit Growth (YoY)

35.3%

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 generative

Generates cash even after funding its capex

More Metrics

Operating Margin

6.6%

Average

Average margins

Net Margin

2.5%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.72

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.54

Defensive

Steadier than the market

52W Range Position

23%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

79.5 / 79.2

Bullish alignment (short > long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

47.7

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹102 Cr	₹90 Cr	₹112 Cr	₹106 Cr	+1.4%
EBITDA	₹4 Cr	₹5 Cr	₹6 Cr	₹6 Cr	+15.4%
EBITDA Margin	4.1%	5.7%	5.4%	6.1%	—
PAT (Net Profit)	₹1 Cr	₹2 Cr	₹2 Cr	₹3 Cr	+55.9%
EPS	₹1.98	₹5.1	₹6.12	₹7.51	+56.0%
ROE	4.3%	9.9%	10.9%	11.8%	—
ROCE	13.1%	14.6%	16.9%	17.2%	—
Total Debt	₹17 Cr	₹19 Cr	₹16 Cr	₹22 Cr	+7.9%
Free Cash Flow	₹1 Cr	₹4 Cr	₹5 Cr	₹4 Cr	+45.1%

🟡 Revenue has been broadly flat over 3 years (1.4% a year).

🟢 EBITDA has grown at 15.4% a year over 3 years.

🟢 EBITDA Margin has risen from 4.1% to 6.1% over 3 years (+2.0 pts).

🟢 PAT (Net Profit) has grown at 55.9% a year over 3 years.

🟢 EPS has grown at 56.0% a year over 3 years.

🟢 ROE has risen from 4.3% to 11.8% over 3 years (+7.6 pts).

🟢 ROCE has risen from 13.1% to 17.2% over 3 years (+4.1 pts).

🔴 Total Debt has grown at 7.9% a year over 3 years.

🟢 Free Cash Flow has grown at 45.1% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹72 Cr

Total Liabilities

₹49 Cr

Cash & Equivalents

₹10 Cr

Operating Cash Flow

₹4 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

66.6%

Peer Comparison

Company	P/E	ROE
TATA STEEL LIMITED	19.8x	10.8%
JSW STEEL LIMITED	12.0x	24.7%
HINDALCO INDUSTRIES LTD	12.3x	12.0%
VEDANTA LIMITED	10.4x	18.7%

Recent News

1 positive1 mixed4 general

Hawa Engineers promoters acquire 1.98% stake each via gift

scanx.trade, 07 OctM&A

🟡Mixed / dependsAcquisitions change the balance sheet before they change the earnings. Look at what was paid, how it was funded, and whether debt rose.

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

Value Research, 14 Sept

Compare Raymond with

Equitymaster, 09 Oct

Hawa Engineers Ltd. Peer Comparison – Compare with Others

Value Research, 14 Sept

Hawa Engineers Q2FY27 Results: Net profit rises 8% YoY to ₹57 lakh

scanx.trade, 03 OctResults

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

Industrial Machinery Penny Stocks India 2027: 5 Picks

Univest, 17 Sept

Watch Items

Revenue growth is negative (-3.2%) 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 · Growth · Valuation

MiddlingBusiness Quality · 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.

3 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Interest cover stays above 3x; Revenue growth stays above 4% a year · see Key things to watch ↑