Hindustan Hardy Limited

Consumer Cyclical — Auto Parts · BSE

₹770.00+₹6.05 (+0.79%)

DalalBaazaar Score

66 / 100

🟢 Good

Verdict

NEUTRAL

Risk

Moderate

Driven by negative free cash flow, micro-cap size, which brings thin liquidity, falling profits.

In simple words: Strong business and financial position, but sales are shrinking. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:08 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 Hindustan Hardy Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Hindustan Hardy Limited engages in the designing, manufacturing, and sale of propeller shafts and other accessories in India and internationally.

IndustryAuto Parts

SectorConsumer Cyclical

Employees96

Annual revenue₹107 Cr

How does it make money?

Turns over ₹107 Cr a year. Of every ₹100 of sales, about ₹8 reaches shareholders as profit, with ₹13 left at the operating level before interest, tax and depreciation. Each of its 96 employees supports ₹1.12 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin12.6%

Net margin7.8%

Revenue / employee₹1.12 Cr

Who are its competitors?

The closest listed comparisons in its industry are BOSCH LIMITED, MARUTI SUZUKI INDIA LTD., TVS MOTOR COMPANY LTD, EICHER MOTORS LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

BOSCH LIMITEDP/E 56.9x · ROE 15.9%

MARUTI SUZUKI INDIA LTD.P/E 25.2x · ROE 13.4%

TVS MOTOR COMPANY LTDP/E 56.8x · ROE 35.8%

EICHER MOTORS LTDP/E 34.7x · ROE 23.0%

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

ROCE has stayed above 15% in every year available and stands at 28.8%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 22.3% against a peer median of 23.0% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

ROCE28.8%

ROE22.3%

Peer median ROE23.0%

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 +74% while net margin moved +25% 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+74%

Margin effect+25%

DalalBaazaar Score

66/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.33 — historically steadier than the index
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

69/ 100

Good

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

Valuation

70/ 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

17.6x

3Y Median

20.8x

40 monthly readings · mean 21.5x · range 12.5x–33.3x

Sector Median

45.7x

median of 4 sector peers

🟢Current valuation is approximately 16% below its 3y median of 20.8x. 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 62% below the peer median of 45.7x.

vs. its own history

Fair

20.8x median over 40 months · -16%

vs. sector peers

Cheap

45.7x median of 4 peers · -62%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

17.6x

P/B

3.08x

EV/EBITDA

8.9x

PEG

0.59

Dividend Yield

0.36%

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 10.6% to 12.6% over 3 years.
High return on capital employed
ROCE of 28.8% is the mark of a business that converts capital into profit efficiently.
Very low debt
Debt/Equity of 0.25x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Debt is rising
Total debt is up 147% over 3 years — worth checking what it funded.
Free cash flow is negative
The business is not currently covering its capital spending from operations.

Red Flags

2 items require attention · 1 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 147% over 3 years, from ₹4 Cr to ₹9 Cr.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹1 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 28.8% 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 10.6% to 12.6%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Cheaper than its peers
It trades 62% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
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?

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 15% a year✓ 20.3% CAGR
Latest reported year was -9.0%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 11%✓ 12.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹1 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.7x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 26%✓ 28.8%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

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

4 good · 4 neutral · 3 weak

Market Cap

₹115 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

17.6x

Fair

Fairly valued against the generic band

P/B Ratio

3.08x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹43.87

Profitable

Profitable on a per-share basis

ROE

22.3%

Strong

Strong capital efficiency

ROCE

28.8%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.25x

Low

Conservative leverage

Revenue Growth (YoY)

-9.0%

Shrinking

Sales are contracting

Profit Growth (YoY)

-60.6%

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

-₹1 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹770

Operating Margin

5.9%

Average

Average margins

Net Margin

6.2%

Average

Average bottom-line conversion

Current Ratio

1.79

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.33

Defensive

Steadier than the market

52W Range Position

19%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

765.1 / 737.5

Bullish alignment (short > long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

44.3

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹61 Cr	₹66 Cr	₹80 Cr	₹107 Cr	+20.3%
EBITDA	₹7 Cr	₹8 Cr	₹10 Cr	₹13 Cr	+27.5%
EBITDA Margin	10.6%	11.9%	13.0%	12.6%	—
PAT (Net Profit)	₹4 Cr	₹5 Cr	₹7 Cr	₹8 Cr	+29.7%
EPS	₹25.61	₹32.5	₹43.98	₹55.92	+29.7%
ROE	20.7%	20.9%	22.3%	22.3%	—
ROCE	27.5%	26.7%	27.9%	28.8%	—
Total Debt	₹4 Cr	₹4 Cr	₹8 Cr	₹9 Cr	+35.1%
Free Cash Flow	₹4 Cr	₹2 Cr	-₹4 Cr	-₹1 Cr	—

🟢 Revenue has grown at 20.3% a year over 3 years.

🟢 EBITDA has grown at 27.5% a year over 3 years.

🟢 EBITDA Margin has risen from 10.6% to 12.6% over 3 years (+2.0 pts).

🟢 PAT (Net Profit) has grown at 29.7% a year over 3 years.

🟢 EPS has grown at 29.7% a year over 3 years.

🟢 ROE has risen from 20.7% to 22.3% over 3 years (+1.6 pts).

🟢 ROCE has risen from 27.5% to 28.8% over 3 years (+1.3 pts).

🔴 Total Debt has grown at 35.1% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹4 Cr to -₹1 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹65 Cr

Total Liabilities

₹27 Cr

Total Debt

₹9 Cr

Cash & Equivalents

₹4 Cr

Operating Cash Flow

₹7 Cr

Capex

-₹7 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

76.8%

Corporate Actions

Dividend Rate

₹2.8

Ex-Dividend Date

03 Sept 2026

Peer Comparison

Company	P/E	ROE
BOSCH LIMITED	56.9x	15.9%
MARUTI SUZUKI INDIA LTD.	25.2x	13.4%
TVS MOTOR COMPANY LTD	56.8x	35.8%
EICHER MOTORS LTD	34.7x	23.0%

Recent News

1 positive1 mixed4 general

Hindustan Hardy Ltd. Peer Comparison – Compare with Others

Value Research, 29 Aug

Top 56 Auto Ancillary Stocks In India For October 2026

Samco, 08 Oct

Q4 results 2026: Bajaj Auto to Paytm among companies to declare Q4 results today

Livemint, 06 MayResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

DIGILOGIC Stock Price and Chart — BSE:DIGILOGIC

TradingView, 28 Jan

Stock Alert: J&K Bank, Larsen & Toubro, Coforge, SRF, United Breweries, Hero MotoCorp

Business Standard, 06 May

Vadilal, Nirlon, Action Construction Equipment, Birla Precision Technologies among 12 stocks to turn ex-dividend tomorrow

Business Today, 02 SeptCapital return

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

Watch Items

Revenue growth is negative (-9.0%) 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

🟡Business QualityAdequate12.6/20

🟢Financial HealthStrong13/20

🟢GrowthStrong14.9/20

🟢ProfitabilityStrong11.5/15

🟡ValuationFair9.3/15

🔴RiskHigh4.4/10

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.

This thesis breaks if

✓Revenue growth stays above 15% a year20.3% CAGR
✓EBITDA margin holds above 11%12.6%
✗Free cash flow remains positive-₹1 Cr
✓Debt / EBITDA stays below 2x0.7x
✓ROCE stays above 26%28.8%