The Hi-Tech Gears Limited

Consumer Cyclical — Auto Parts · NSE

₹559.50−₹6.85 (−1.21%)

DalalBaazaar Score

42 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

Driven by micro-cap size, which brings thin liquidity, a very high earnings multiple, which leaves little margin for disappointment, falling profits.

In simple words: The business is earning a fairly low return on the money invested in it, though profits are falling even as sales grow. Valuation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:10 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 The Hi-Tech Gears Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

The Hi-Tech Gears Limited manufactures and sells auto components for automobile manufacturers in India, the United States, and internationally.

IndustryAuto Parts

SectorConsumer Cyclical

Employees824

Annual revenue₹889 Cr

How does it make money?

Turns over ₹889 Cr a year. Of every ₹100 of sales, about ₹2 reaches shareholders as profit, with ₹13 left at the operating level before interest, tax and depreciation. Each of its 824 employees supports ₹1.08 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin13.0%

Net margin2.4%

Revenue / employee₹1.08 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?Little sign of one

Returns on capital of 7.4% 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.

ROCE7.4%

ROE4.0%

Peer median ROE23.0%

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved -22% while net margin moved +16% 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-22%

Margin effect+16%

DalalBaazaar Score

42/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 8.0% a year
✗ Profit has declined at 3.2% a year
✗ Profit fell 20.7% in the latest year

Quality vs. Valuation

Company Quality

43/ 100

Weak

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.

Weak on business quality and not cheap enough to compensate.

Historical Valuation

Current P/E

53.4x

3Y Median

30.6x

40 monthly readings · mean 33.8x · range 9.5x–86.7x

Sector Median

45.7x

median of 4 sector peers

⚠️Current valuation is approximately 75% above its 3y median of 30.6x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

⚠️Against its sector it trades 17% above the peer median of 45.7x.

vs. its own history

Expensive

30.6x median over 40 months · +75%

vs. sector peers

Fair

45.7x median of 4 peers · +17%

vs. generic bands

Expensive

Above 35x

P/E (Trailing)

53.4x

P/B

2.01x

EV/EBITDA

10.6x

PEG

—

Dividend Yield

0.71%

What's Good / What's Bad

🟢 What's Going Well3

Debt is being paid down
Total debt is down 60% over 3 years.
Cash generation is improving
Free cash flow is up 119% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on capital is falling
ROCE has declined from 9.7% to 7.4% — often a sign of competition or overexpansion.
Valuation above its historical average
At 53.4x the stock trades 75% above its own median of 30.6x.

Red Flags

No automated checks triggered

None of the automated financial checks below were triggered on the years of data available. That is not the same as a clean bill of health — see what could not be checked.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Deleveraging frees up earnings
Debt is down 60% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹54 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.
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?

The price already assumes success
The stock trades 75% above its own median multiple. At this level the business has to deliver just to stand still, and a stumble is repriced twice — lower earnings on a lower multiple.
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

1EBITDA margin holds above 11%✓ 13.0%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Interest cover stays above 3x✓ 3.2x
How much operating profit can fall before interest stops being comfortably covered.
3Free cash flow remains positive✓ ₹54 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.6x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 8%✗ 7.4%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

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

4 good · 3 neutral · 4 weak

Market Cap

₹1,053 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

53.4x

Expensive

Expensive — verify against sector peers

P/B Ratio

2.01x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹10.48

Profitable

Profitable on a per-share basis

ROE

4.0%

Weak

Weak capital efficiency

ROCE

7.4%

Weak

Low return on total capital employed

Debt/Equity

0.35x

Low

Conservative leverage

Revenue Growth (YoY)

10.3%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-20.7%

Falling

Profits are shrinking

Dividend Yield

0.71%

Modest

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

Free Cash Flow

₹54 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹559.5

Operating Margin

3.8%

Weak

Thin margins leave little room for error

Net Margin

2.1%

Weak

Very little revenue reaches the bottom line

Current Ratio

2.01

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.79

Defensive

Steadier than the market

52W Range Position

12%

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

577.8 / 564.8

Bullish alignment (short > long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

31.1

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1,140 Cr	₹1,084 Cr	₹907 Cr	₹889 Cr	-8.0%
EBITDA	₹140 Cr	₹153 Cr	₹148 Cr	₹115 Cr	-6.2%
EBITDA Margin	12.3%	14.2%	16.3%	13.0%	—
PAT (Net Profit)	₹23 Cr	₹114 Cr	₹40 Cr	₹21 Cr	-3.2%
EPS	₹12.3	₹60.73	₹21.46	₹11.15	-3.2%
ROE	6.5%	24.5%	8.3%	4.0%	—
ROCE	9.7%	28.6%	13.6%	7.4%	—
Total Debt	₹457 Cr	₹298 Cr	₹202 Cr	₹182 Cr	-26.4%
Free Cash Flow	₹25 Cr	₹83 Cr	₹125 Cr	₹54 Cr	+29.9%

🔴 Revenue has shrunk at 8.0% a year over 3 years.

🔴 EBITDA has shrunk at 6.2% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 13.0% over 3 years.

🔴 PAT (Net Profit) has shrunk at 3.2% a year over 3 years.

🔴 EPS has shrunk at 3.2% a year over 3 years.

🔴 ROE has fallen from 6.5% to 4.0% over 3 years (-2.5 pts).

🔴 ROCE has fallen from 9.7% to 7.4% over 3 years (-2.3 pts).

🟢 Total Debt has shrunk at 26.4% a year over 3 years.

🟢 Free Cash Flow has grown at 29.9% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹839 Cr

Total Liabilities

₹317 Cr

Total Debt

₹182 Cr

Cash & Equivalents

₹6 Cr

Operating Cash Flow

₹86 Cr

Capex

-₹32 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

58.4%

Corporate Actions

Dividend Rate

₹4

Ex-Dividend Date

15 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 mixed1 negative3 general

Why Is The Hi-Tech Gears Share Price Falling Key Reasons 2026

Univest, 06 JulPrice 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.

Hi-Tech Gears Q4 Net Profit Declines 16.5% to ₹8.1 Cr as Margins Shrink

Sahi, 29 MayResults

🔴Potentially negativeReported deterioration, which feeds the growth and margin inputs on this page directly.

The Hi-Tech Gears Limited (NSE:HITECHGEAR) Pays A ₹4.00 Dividend In Just Three Days

Simply Wall Street, 11 SeptCapital return

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

NCLAT extends interim stay on Hi-Tech Gears CIRP process

scanx.trade, 20 Aug

The Hi-Tech Gears Ltd. Peer Comparison – Compare with Others

Value Research, 31 Aug

The Hi-Tech Gears Ltd. Lower Circuit Today: Price, Data and Peers

Univest, 29 Sept

Watch Items

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

DalalBaazaar Thesis

🟡Business QualityAdequate9/20

🟢Financial HealthStrong16.4/20

🔴GrowthWeak2.4/20

🔴ProfitabilityWeak4.5/15

🔴ValuationDemanding4.9/15

🔴RiskHigh4.4/10

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation.

This thesis breaks if

✓EBITDA margin holds above 11%13.0%
✓Interest cover stays above 3x3.2x
✓Free cash flow remains positive₹54 Cr
✓Debt / EBITDA stays below 2x1.6x
✗ROCE stays above 8%7.4%