Hirect Limited

Industrials — Electrical Equipment & Parts · NSE

₹1,116.00+₹21.20 (+1.94%)

DalalBaazaar Score

54 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Very High

Driven by moderate debt load, negative free cash flow, micro-cap size, which brings thin liquidity.

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

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:02 pm

Understanding the Business

Company site ↗

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

What does this company do?

Hirect Limited designs, develops, manufactures, and markets power semiconductors, power electronic equipment, and railway transportation equipment in India and internationally.

IndustryElectrical Equipment & Parts

SectorIndustrials

Employees679

Annual revenue₹997 Cr

How does it make money?

Turns over ₹997 Cr a year. Of every ₹100 of sales, about ₹5 reaches shareholders as profit, with ₹9 left at the operating level before interest, tax and depreciation. Each of its 679 employees supports ₹1.47 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.47 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 26.3% 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 +179% while net margin moved -354% 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+179%

Margin effect-354%

DalalBaazaar Score

54/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ P/E of 90.8x is demanding — it needs sustained high growth to justify
• P/E is close to its own historical median of 107.1x
✗ P/B of 18.39x is a steep premium to book

Quality vs. Valuation

Company Quality

60/ 100

Average

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

Valuation

43/ 100

Expensive

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

90.8x

2Y Median

107.1x

28 monthly readings · mean 115.8x · range 57.9x–251.9x

Sector Median

88.8x

median of 3 sector peers

🟢Current valuation is approximately 15% below its 2y median of 107.1x. 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 is priced broadly in line with the peer median of 88.8x.

vs. its own history

Fair

107.1x median over 28 months · -15%

vs. sector peers

Fair

88.8x median of 3 peers · +2%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

47.3x

PEG

—

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 4.6% to 8.9% over 3 years.
Return on equity is rising
ROE has improved from -5.7% to 21.6%.
Return on capital is rising
ROCE has improved from -0.4% to 26.3%.
High return on capital employed
ROCE of 26.3% 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

🔴Debt has risen sharplyFinancial
Total debt is up 134% over 3 years, from ₹105 Cr to ₹245 Cr.
🔴Receivables growing faster than salesFinancial
Receivables up 265% against revenue up 179% — sales are being booked faster than they are collected.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹12 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 26.3% 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 4.6% to 8.9%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.

🔴 Bear CaseWhat could go wrong?

Sales are being booked faster than collected
Receivables are up 265% against revenue up 179%. 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.
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 31% a year✓ 40.7% CAGR
Latest reported year was 20.3%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 7%✓ 8.9%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA stays below 2x✗ 2.8x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4Free cash flow remains positive✗ -₹12 Cr
Profit that never becomes cash eventually stops being profit.
5ROCE stays above 23%✓ 26.3%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

5 / 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 · 3 neutral · 4 weak

Market Cap

₹3,957 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

90.8x

Expensive

Expensive — verify against sector peers

P/B Ratio

18.39x

Rich

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

EPS (TTM)

₹12.29

Profitable

Profitable on a per-share basis

ROE

21.6%

Strong

Strong capital efficiency

ROCE

26.3%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

1.19x

Moderate

Moderate leverage

Revenue Growth (YoY)

20.3%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-26.7%

Falling

Profits are shrinking

Dividend Yield

0.13%

Modest

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

Free Cash Flow

-₹12 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

3.3%

Weak

Thin margins leave little room for error

Net Margin

4.0%

Average

Average bottom-line conversion

Current Ratio

1.12

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.31

Defensive

Steadier than the market

52W Range Position

66%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

1159.8 / 1211.6

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

33.6

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹358 Cr	₹517 Cr	₹654 Cr	₹997 Cr	+40.7%
EBITDA	₹16 Cr	₹49 Cr	₹75 Cr	₹89 Cr	+75.7%
EBITDA Margin	4.6%	9.5%	11.5%	8.9%	—
PAT (Net Profit)	-₹6 Cr	₹13 Cr	₹37 Cr	₹45 Cr	—
EPS	₹-1.92	₹3.64	₹10.82	₹13.05	—
ROE	-5.7%	10.0%	23.2%	21.6%	—
ROCE	-0.4%	19.2%	31.8%	26.3%	—
Total Debt	₹105 Cr	₹135 Cr	₹164 Cr	₹245 Cr	+32.7%
Free Cash Flow	₹4 Cr	₹20 Cr	₹13 Cr	-₹12 Cr	—

🟢 Revenue has grown at 40.7% a year over 3 years.

🟢 EBITDA has grown at 75.7% a year over 3 years.

🟢 EBITDA Margin has risen from 4.6% to 8.9% over 3 years (+4.3 pts).

🟢 PAT (Net Profit) has turned positive, from -₹6 Cr to ₹45 Cr.

🟢 EPS has turned positive, from ₹-1.92 to ₹13.05.

🟢 ROE has risen from -5.7% to 21.6% over 3 years (+27.3 pts).

🟢 ROCE has risen from -0.4% to 26.3% over 3 years (+26.7 pts).

🔴 Total Debt has grown at 32.7% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹4 Cr to -₹12 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹662 Cr

Total Liabilities

₹456 Cr

Cash & Equivalents

₹4 Cr

Operating Cash Flow

₹86 Cr

Capex

-₹97 Cr

Shareholding (proxy)

Institutional Holding

3.2%

Insider Holding

61.3%

Corporate Actions

Dividend Rate

₹1.4

Ex-Dividend Date

04 Aug 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 positive2 mixed3 general

HIRECT LTD Stock/Share price , NSE/BSE Forecast News and Live Quotes

Equitymaster, 27 Sept

Hind Rectifiers Secures ₹100 Cr Investment From Tata Group At ₹920 Per Share

Sahi, 18 May

Hind Rectifiers' (NSE:HIRECT) earnings growth rate lags the 52% CAGR delivered to shareholders

Simply Wall Street, 22 JanResults

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

Hirect shares jump over 4% after order wins worth ₹120 crore from Indian Railways, stock up 72% YTD

Upstox, 27 JulOrder win

🟢Potentially positiveOrder wins add to future revenue, though the effect depends on the contract's size against annual sales and on when it is executed.

Mukul Agrawal portfolio stock Hind Rectifiers zooms 19%, hits new high

Business Standard, 15 Jul

Hirect Ltd Q4 Results 2026 - Find Hirect Ltd Q4 Earnings Result | HIRECT Q4 results

Livemint, 02 SeptResults

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

Watch Items

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

DalalBaazaar Thesis

StrongGrowth · Profitability

MiddlingBusiness Quality

WeakFinancial Health · Valuation · Risk

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

2 of 5 tripwires tripped — Debt / EBITDA stays below 2x; Free cash flow remains positive · see Key things to watch ↑