Hilton Metal Forging Limited

Industrials — Metal Fabrication · NSE

₹16.20+₹0.16 (+1.00%)

DalalBaazaar Score

49 / 100

🟡 Moderate

Verdict

CAUTION

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, 6:09 pm

Caution warranted. Multiple fundamental metrics — flagged in red below — point to either valuation stretch, leverage risk, or weakening profitability. This doesn't mean avoid the stock outright, but it does mean the burden of proof is on the growth story to justify the current price.

Understanding the Business

Company site ↗

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

What does this company do?

Hilton Metal Forging Limited manufactures steel forgings, flanges, and forged fitting for railways, oil and gas, refinery, and pharmaceutical industries in India.

IndustryMetal Fabrication

SectorIndustrials

Employees55

Annual revenue₹230 Cr

How does it make money?

Turns over ₹230 Cr a year. Of every ₹100 of sales, about ₹1 reaches shareholders as profit, with ₹6 left at the operating level before interest, tax and depreciation. Each of its 55 employees supports ₹4.19 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin5.6%

Net margin1.5%

Revenue / employee₹4.19 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.

TATA STEEL LIMITEDP/E 19.8x · ROE 10.8%

JSW STEEL LIMITEDP/E 12.0x · ROE 24.7%

HINDALCO INDUSTRIES LTDP/E 12.3x · ROE 12.0%

VEDANTA LIMITEDP/E 10.4x · ROE 18.7%

What is its competitive advantage?Little sign of one

Returns on capital of 6.4% 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.

ROCE6.4%

ROE2.3%

Peer median ROE18.7%

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 +120% while net margin moved -73% 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+120%

Margin effect-73%

DalalBaazaar Score

49/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROCE of 6.4% is below 10% — capital is not working hard
✗ ROCE has fallen by 5.2 points — returns are eroding
✗ EBITDA margin of 5.6% is thin — little cushion if costs rise
✗ Net margin of 1.9% is slim
• Revenue has compounded at 30.1% a year, which is the base these returns are earned on

Quality vs. Valuation

Company Quality

41/ 100

Weak

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

Valuation

75/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

Optically cheap, but the underlying business scores poorly. Cheap-and-weak is what a value trap looks like from the outside — the low price may be deserved.

Historical Valuation

Current P/E

10.2x

3Y Median

28.9x

40 monthly readings · mean 30.4x · range 7.6x–70.4x

Sector Median

12.2x

median of 4 sector peers

🟢Current valuation is approximately 65% below its 3y median of 28.9x. 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 16% below the peer median of 12.2x.

vs. its own history

Cheap

28.9x median over 40 months · -65%

vs. sector peers

Fair

12.2x median of 4 peers · -16%

vs. generic bands

Cheap

Below 15x

P/E (Trailing)

10.2x

P/B

0.38x

EV/EBITDA

10.8x

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well2

Valuation below its historical average
At 10.2x the stock trades 65% below its own median of 28.9x.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention4

Margins are compressing
EBITDA margin has slipped from 13.8% to 5.6% over 3 years.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Return on equity is falling
ROE has dropped from 6.6% to 2.3% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 11.5% to 6.4% — often a sign of competition or overexpansion.

Red Flags

5 items require attention · 2 high · 3 watch

🔴Thin interest coverageFinancial
Operating profit covers interest only 1.5x — little room if earnings dip.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 8.3 points, from 13.8% to 5.6%.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹28 Cr in the latest year.
🟡Profit is decliningFinancial
Net profit is down 41% over 3 years.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 39% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

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.
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?

Margins are being competed away
EBITDA margin has fallen from 13.8% to 5.6%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The debt load needs earnings to hold up
Debt is 4.4x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Returns on shareholder capital are falling
ROE has dropped from 6.6% to 2.3%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
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.
Several serious flags at once
2 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

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

1Revenue growth stays above 23% a year✓ 30.1% CAGR
Latest reported year was 167.4%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 4%✓ 5.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA falls below 3x✗ 4.4x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
4Free cash flow remains positive✗ -₹28 Cr
Profit that never becomes cash eventually stops being profit.
5Interest cover stays above 3x✗ 1.5x
How much operating profit can fall before interest stops being comfortably covered.

Investment Checklist

6 / 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 · 2 neutral · 3 weak

Market Cap

₹83 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

10.2x

Cheap

Cheap against the generic band

P/B Ratio

0.38x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹1.59

Profitable

Profitable on a per-share basis

ROE

2.3%

Weak

Weak capital efficiency

ROCE

6.4%

Weak

Low return on total capital employed

Debt/Equity

0.37x

Low

Conservative leverage

Revenue Growth (YoY)

167.4%

Healthy

Healthy top-line growth

Profit Growth (YoY)

483.3%

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

-₹28 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹16.2

Operating Margin

6.0%

Average

Average margins

Net Margin

1.9%

Weak

Very little revenue reaches the bottom line

Current Ratio

2.64

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

-1.48

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

16.5 / 18.2

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

39.3

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹105 Cr	₹138 Cr	₹163 Cr	₹230 Cr	+30.1%
EBITDA	₹14 Cr	₹17 Cr	₹15 Cr	₹13 Cr	-4.0%
EBITDA Margin	13.8%	12.0%	9.0%	5.6%	—
PAT (Net Profit)	₹6 Cr	₹7 Cr	₹6 Cr	₹3 Cr	-16.2%
EPS	₹2.35	₹2.68	₹2.34	₹1.34	-17.1%
ROE	6.6%	6.7%	5.3%	2.3%	—
ROCE	11.5%	12.4%	9.6%	6.4%	—
Total Debt	₹53 Cr	₹54 Cr	₹61 Cr	₹56 Cr	+1.9%
Free Cash Flow	-₹30 Cr	₹3 Cr	-₹3 Cr	-₹28 Cr	—

🟢 Revenue has grown at 30.1% a year over 3 years.

🔴 EBITDA has shrunk at 4.0% a year over 3 years.

🔴 EBITDA Margin has fallen from 13.8% to 5.6% over 3 years (-8.3 pts).

🔴 PAT (Net Profit) has shrunk at 16.2% a year over 3 years.

🔴 EPS has shrunk at 17.1% a year over 3 years.

🔴 ROE has fallen from 6.6% to 2.3% over 3 years (-4.3 pts).

🔴 ROCE has fallen from 11.5% to 6.4% over 3 years (-5.2 pts).

🟡 Total Debt has been broadly flat over 3 years (1.9% a year).

Balance Sheet & Cash Flow — FY2026

Total Assets

₹236 Cr

Total Liabilities

₹85 Cr

Total Debt

₹56 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹27 Cr

Capex

-₹1 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

29.4%

Corporate Actions

Ex-Dividend Date

21 Sept 2015

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

Hilton Metal Forging Share Price Forecast: 3 Year Outlook to 2030

Univest, 17 Jul

Hilton Metal Forging seeks approval for ₹100 crore QIP on July 15

scanx.trade, 15 Jun

Hilton Metal Bags ₹720 Cr Order; Shares Jump 18%

HDFC Sky, 27 MarOrder win

🟢Potentially positiveAn order or contract win, which adds to future revenue. How much depends on its size against annual sales and on when it is executed.

Hilton Metal Forging Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 30 Aug

Investors Don't See Light At End Of Hilton Metal Forging Limited's (NSE:HILTON) Tunnel And Push Stock Down 34%

Simply Wall Street, 20 Jan

Hilton Metal Forging Share Price Drops 6%: Is the Recent Bounce Fading?

Kalkine India, 09 AprPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Watch Items

Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🔴Business QualityWeak5.9/20

🟡Financial HealthAdequate10.9/20

🟡GrowthModest9.3/20

🔴ProfitabilityWeak4.6/15

🟢ValuationAttractive13.2/15

🟡RiskModerate5.4/10

Cheap, but for a reason

The low price is the whole case here, and the business underneath scores poorly. Cheap-and-weak is what a value trap looks like from the outside — it needs a specific reason the numbers are about to improve, not just the observation that they are low. 2 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓Revenue growth stays above 23% a year30.1% CAGR
✓EBITDA margin holds above 4%5.6%
✗Debt / EBITDA falls below 3x4.4x
✗Free cash flow remains positive-₹28 Cr
✗Interest cover stays above 3x1.5x