HBL Engineering Limited

Industrials — Electrical Equipment & Parts · NSE

₹829.05+₹118.60 (+16.69%)

DalalBaazaar Score

73 / 100

🟢 Good

Verdict

NEUTRAL

Risk

High

Driven by high debt relative to equity, small-cap size, which brings sharper price swings, 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, 7:00 pm

Understanding the Business

Company site ↗

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

What does this company do?

HBL Engineering Limited manufactures and sells batteries and electronic equipment in India and internationally. It operates through Industrial batteries, Defense and Aviation batteries, and Electronics segments.

IndustryElectrical Equipment & Parts

SectorIndustrials

Employees2,455

Annual revenue₹3,283 Cr

How does it make money?

Turns over ₹3,283 Cr a year. Of every ₹100 of sales, about ₹25 reaches shareholders as profit, with ₹36 left at the operating level before interest, tax and depreciation. Each of its 2,455 employees supports ₹1.34 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.34 Cr

Who are its competitors?

The closest listed comparisons in its industry are SIEMENS LTD, ABB INDIA LIMITED, HAVELLS 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?Some evidence

ROCE of 46.4% 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 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 +142% while net margin moved +242% 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+142%

Margin effect+242%

DalalBaazaar Score

73/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.03 — historically steadier than the index
✗ Small 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

81/ 100

Excellent

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

Valuation

71/ 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

29.4x

3Y Median

75.5x

40 monthly readings · mean 80.7x · range 22.4x–174.3x

Sector Median

88.8x

median of 3 sector peers

🟢Current valuation is approximately 61% below its 3y median of 75.5x. 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 67% below the peer median of 88.8x.

vs. its own history

Cheap

75.5x median over 40 months · -61%

vs. sector peers

Cheap

88.8x median of 3 peers · -67%

vs. generic bands

Fair

15x–35x

EV/EBITDA

19.0x

PEG

0.29

What's Good / What's Bad

🟢 What's Going Well7

Margins are improving
EBITDA margin is up from 12.5% to 36.1% over 3 years.
Debt is being paid down
Total debt is down 22% over 3 years.
Cash generation is improving
Free cash flow is up 904% over 3 years.
Return on equity is rising
ROE has improved from 10.4% to 36.8%.
Return on capital is rising
ROCE has improved from 13.4% to 46.4%.
High return on capital employed
ROCE of 46.4% is the mark of a business that converts capital into profit efficiently.
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

1 item require attention · 1 high

🔴High leverageFinancial
Debt/Equity of 3.02x — earnings must service borrowings before shareholders see anything.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 46.4% 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 12.5% to 36.1%. 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 22% 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 61% 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 67% 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 3.02x. Interest is payable whether or not the business has a good year.
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
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 26% a year✓ 34.2% CAGR
Latest reported year was 6.0%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 34%✓ 36.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✓ ₹588 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.1x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 43%✓ 46.4%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

9 / 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

4 good · 4 neutral · 3 weak

Market Cap

₹22,981 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

29.4x

Fair

Fairly valued against the generic band

P/B Ratio

10.29x

Rich

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

EPS (TTM)

₹28.16

Profitable

Profitable on a per-share basis

ROE

36.8%

Strong

Strong capital efficiency

ROCE

46.4%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

3.02x

High

High leverage

Revenue Growth (YoY)

6.0%

Modest

Modest growth

Profit Growth (YoY)

-23.5%

Falling

Profits are shrinking

Dividend Yield

0.36%

Modest

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

Free Cash Flow

₹588 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

21.1%

Good

Healthy core-business profitability

Net Margin

23.4%

Good

Strong bottom-line conversion

Current Ratio

3.57

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.03

Defensive

Steadier than the market

52W Range Position

42%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

761.5 / 722.3

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

54.5

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1,358 Cr	₹2,221 Cr	₹1,954 Cr	₹3,283 Cr	+34.2%
EBITDA	₹170 Cr	₹457 Cr	₹426 Cr	₹1,185 Cr	+90.9%
EBITDA Margin	12.5%	20.6%	21.8%	36.1%	—
PAT (Net Profit)	₹99 Cr	₹281 Cr	₹277 Cr	₹815 Cr	+102.1%
EPS	₹3.55	₹10.13	₹9.99	₹29.4	+102.3%
ROE	10.4%	23.0%	18.7%	36.8%	—
ROCE	13.4%	30.0%	24.5%	46.4%	—
Total Debt	₹86 Cr	₹67 Cr	₹74 Cr	₹67 Cr	-8.1%
Free Cash Flow	₹59 Cr	₹196 Cr	₹125 Cr	₹588 Cr	+115.8%

🟢 Revenue has grown at 34.2% a year over 3 years.

🟢 EBITDA has grown at 90.9% a year over 3 years.

🟢 EBITDA Margin has risen from 12.5% to 36.1% over 3 years (+23.6 pts).

🟢 PAT (Net Profit) has grown at 102.1% a year over 3 years.

🟢 EPS has grown at 102.3% a year over 3 years.

🟢 ROE has risen from 10.4% to 36.8% over 3 years (+26.4 pts).

🟢 ROCE has risen from 13.4% to 46.4% over 3 years (+33.0 pts).

🟢 Total Debt has shrunk at 8.1% a year over 3 years.

🟢 Free Cash Flow has grown at 115.8% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹2,942 Cr

Total Liabilities

₹728 Cr

Cash & Equivalents

₹528 Cr

Operating Cash Flow

₹738 Cr

Capex

-₹150 Cr

Shareholding (proxy)

Institutional Holding

56.2%

Insider Holding

8.1%

Corporate Actions

Dividend Rate

₹3

Ex-Dividend Date

11 Sept 2026

Peer Comparison

Company	P/E	ROE
SIEMENS LTD	88.8x	10.5%
ABB INDIA LIMITED	92.6x	19.1%
HAVELLS INDIA LIMITED	43.5x	17.1%

Recent News

1 mixed5 general

HBL Engineering, Wipro, L&T Finance shares spurt amid spike in volumes; check full list

Upstox, 16 Oct

HBL Engineering Limited (HBLENGINE.NS) Stock Price, News, Quote & History

Yahoo! Finance Canada, 16 Oct

Should You Be Adding HBL Engineering (NSE:HBLENGINE) To Your Watchlist Today?

Simply Wall Street, 01 Sept

HBL Engineering (NSE:HBLENGINE), Wipro and L&T Finance Trading Volumes

Kalkine India, 16 Oct

HBL Engineering Ltd. Share Price Rise and Stock Analysis

Univest, 20 AugPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Stock to buy today: HBL Engineering (₹808) – BUY

BusinessLine, 30 Sept

Watch Items

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

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. 1 high-severity red flag sits above this conclusion and should be read first.

All 5 tripwires holding · see Key things to watch ↑