Humming Bird Education Limited

Consumer Defensive — Education & Training Services · BSE

₹28.50₹0.00 (0.00%)

DalalBaazaar Score

66 / 100

🟢 Good

Verdict

NEUTRAL

Risk

High

Driven by high debt relative to equity, micro-cap size, which brings thin liquidity, falling profits.

In simple words: Strong business and financial position, though profits are falling even as sales grow. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:46 pm

Understanding the Business

Company site ↗

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

What does this company do?

Humming Bird Education Limited provides education and allied services in India. The company offers Olympiads, assessments, and supplementary educational products; and educational books, including experiential learning workbooks and previous-year solved papers.

IndustryEducation & Training Services

SectorConsumer Defensive

Employees24

Annual revenue₹8 Cr

How does it make money?

Turns over ₹8 Cr a year. Of every ₹100 of sales, about ₹7 reaches shareholders as profit, with ₹13 left at the operating level before interest, tax and depreciation. Each of its 24 employees supports ₹33.1 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹33.1 lakh

Who are its competitors?

The closest listed comparisons in its industry are HINDUSTAN UNILEVER LTD., ITC LTD, NESTLE INDIA LIMITED, BRITANNIA INDUSTRIES LTD. 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 25.7% 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 ROE51.0%

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 +227% while net margin moved -36% 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+227%

Margin effect-36%

DalalBaazaar Score

66/ 100

Good

Weighted across six categories. Every point is explained below.

• Beta of 1.05 — moves roughly with the market
✗ 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

72/ 100

Good

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

Valuation

68/ 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

32.0x

3Y Median

220.7x

39 monthly readings · mean 605.1x · range 16.5x–2406.1x

Sector Median

43.3x

median of 4 sector peers

🟢Current valuation is approximately 85% below its 3y median of 220.7x. 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 26% below the peer median of 43.3x.

vs. its own history

Cheap

220.7x median over 39 months · -85%

vs. sector peers

Cheap

43.3x median of 4 peers · -26%

vs. generic bands

Fair

15x–35x

EV/EBITDA

15.1x

PEG

1.15

What's Good / What's Bad

🟢 What's Going Well4

Cash generation is improving
Free cash flow is up 8721% over 3 years.
Return on equity is rising
ROE has improved from 12.8% to 19.3%.
Return on capital is rising
ROCE has improved from 14.7% to 25.7%.
High return on capital employed
ROCE of 25.7% is the mark of a business that converts capital into profit efficiently.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

3 items require attention · 2 high · 1 watch

🔴High leverageFinancial
Debt/Equity of 2.95x — earnings must service borrowings before shareholders see anything.
🔴Receivables growing faster than salesFinancial
Receivables up 1888% against revenue up 227% — sales are being booked faster than they are collected.
🟡Margins are compressingFinancial
EBITDA margin is down 4.5 points over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 25.7% 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.
Priced below its own history
The stock trades 85% 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 26% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 17.5% to 13.0%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Leverage amplifies any setback
Debt/Equity of 2.95x. Interest is payable whether or not the business has a good year.
Sales are being booked faster than collected
Receivables are up 1888% against revenue up 227%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
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 36% a year✓ 48.4% CAGR
Latest reported year was 108.4%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 11%✓ 13.0%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✓ ₹2 Cr
Profit that never becomes cash eventually stops being profit.
4ROCE stays above 23%✓ 25.7%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Valuation vs its own median of 220.7x✓ 32.0x today
A re-rating above its own history needs a reason; without one it is just a higher price.

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 · 3 neutral · 3 weak

Market Cap

₹17 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

32.0x

Fair

Fairly valued against the generic band

P/B Ratio

6.16x

Rich

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

EPS (TTM)

₹0.89

Profitable

Profitable on a per-share basis

ROE

27.3%

Strong

Strong capital efficiency

ROCE

25.7%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

2.95x

High

High leverage

Revenue Growth (YoY)

108.4%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-0.1%

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

₹0 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

ROA

14.0%

Good

Assets are working hard

Operating Margin

-9.7%

Weak

Thin margins leave little room for error

Net Margin

6.9%

Average

Average bottom-line conversion

Current Ratio

6.23

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

1.05

Market-like

Moves roughly in line with the market

52W Range Position

83%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

28.5 / 25.2

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

100.0

Overbought zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹2 Cr	₹6 Cr	₹6 Cr	₹8 Cr	+48.4%
EBITDA	₹0 Cr	₹0 Cr	₹1 Cr	₹1 Cr	+34.4%
EBITDA Margin	17.5%	3.0%	15.3%	13.0%	—
PAT (Net Profit)	₹0 Cr	-₹0 Cr	₹1 Cr	₹1 Cr	+28.0%
EPS	₹0.43	₹-0.01	₹0.89	—	—
ROE	12.8%	-2.6%	24.0%	19.3%	—
ROCE	14.7%	6.1%	32.2%	25.7%	—
Free Cash Flow	₹0 Cr	₹0 Cr	-₹2 Cr	₹2 Cr	+345.2%

🟢 Revenue has grown at 48.4% a year over 3 years.

🟢 EBITDA has grown at 34.4% a year over 3 years.

🔴 EBITDA Margin has fallen from 17.5% to 13.0% over 3 years (-4.5 pts).

🟢 PAT (Net Profit) has grown at 28.0% a year over 3 years.

🟢 ROE has risen from 12.8% to 19.3% over 3 years (+6.6 pts).

🟢 ROCE has risen from 14.7% to 25.7% over 3 years (+11.0 pts).

🟢 Free Cash Flow has grown at 345.2% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹4 Cr

Total Liabilities

₹1 Cr

Total Debt

—

Cash & Equivalents

₹2 Cr

Operating Cash Flow

₹2 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

79.9%

Corporate Actions

Ex-Dividend Date

22 Sept 2023

Peer Comparison

Company	P/E	ROE
HINDUSTAN UNILEVER LTD.	42.5x	21.5%
ITC LTD	16.6x	27.4%
NESTLE INDIA LIMITED	59.8x	79.9%
BRITANNIA INDUSTRIES LTD	44.1x	51.0%

Recent News

3 positive3 general

Humming Bird Education (BSE: 542592): Sales Up 108.59%, Loss Narrows

Kalkine India, 05 OctResults

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

Compare with

Equitymaster, 30 Sept

Humming Bird Education Ltd. Financials – Balance Sheet, Profit & Loss, Cash Flow

Value Research, 30 Aug

Humming Bird Education FY26 profit rises on higher revenue

scanx.trade, 27 MayResults

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

Eternal Ltd Stock/Share price , NSE/BSE Forecast News and Live Quotes

Equitymaster, 09 Oct

Upcoming Stock Split: Education Stock To Consider Stock Split, Shares Hit Upper Circuit

Goodreturns, 21 AugCapital return

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

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in overbought territory — momentum entries here carry more short-term pullback risk.

DalalBaazaar Thesis

StrongBusiness Quality · Financial Health · Growth · Profitability

MiddlingValuation

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

All 5 tripwires holding · see Key things to watch ↑