Hindustan Foods Limited

Industrials — Conglomerates · NSE

₹569.10−₹10.20 (−1.76%)

DalalBaazaar Score

54 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Moderate

Driven by moderate debt load, negative free cash flow, small-cap size, which brings sharper price swings.

In simple words: Reasonable but unspectacular business quality, 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, 7:49 pm

Understanding the Business

Company site ↗

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

What does this company do?

Hindustan Foods Limited engages in the business of contract manufacturing of fast-moving consumer goods in India and internationally.

IndustryConglomerates

SectorIndustrials

Employees1,646

Annual revenue₹4,238 Cr

How does it make money?

Turns over ₹4,238 Cr a year. Of every ₹100 of sales, about ₹4 reaches shareholders as profit, with ₹9 left at the operating level before interest, tax and depreciation. Each of its 1,646 employees supports ₹2.57 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹2.57 Cr

Who are its competitors?

The closest listed comparisons in its industry are LARSEN & TOUBRO LTD., SIEMENS LTD, ABB 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?Little sign of one

Returns on capital of 13.4% 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.

Peer median ROE15.2%

What is the outlook?

2 analysts covering the stock expect revenue to grow about 23.1% and earnings to grow about 32.5% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+23.1%

Est. earnings growth+32.5%

Analysts2

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 +64% while net margin moved +28% 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+64%

Margin effect+28%

DalalBaazaar Score

54/ 100

Moderate

Weighted across six categories. Every point is explained below.

• ROCE of 13.4% is adequate but not distinctive
✗ ROCE has fallen by 3.4 points — returns are eroding
✗ EBITDA margin of 8.6% is thin — little cushion if costs rise
✗ Net margin of 3.6% is slim
• Revenue has compounded at 17.8% a year, which is the base these returns are earned on

Quality vs. Valuation

Company Quality

56/ 100

Average

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

Valuation

59/ 100

Fair

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

44.0x

3Y Median

65.2x

40 monthly readings · mean 66.1x · range 46.1x–93.1x

Sector Median

88.8x

median of 3 sector peers

🟢Current valuation is approximately 33% below its 3y median of 65.2x. 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 50% below the peer median of 88.8x.

vs. its own history

Cheap

65.2x median over 40 months · -33%

vs. sector peers

Cheap

88.8x median of 3 peers · -50%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

21.7x

PEG

1.57

What's Good / What's Bad

🟢 What's Going Well2

Margins are improving
EBITDA margin is up from 6.8% to 8.6% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 19.0% to 12.8% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 16.8% to 13.4% — often a sign of competition or overexpansion.

Red Flags

5 items require attention · 5 high

🔴Debt has risen sharplyFinancial
Total debt is up 112% over 3 years, from ₹514 Cr to ₹1,088 Cr.
🔴Free cash flow negative for 4 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🔴Receivables growing faster than salesFinancial
Receivables up 144% against revenue up 64% — sales are being booked faster than they are collected.
🔴Inventory building faster than salesFinancial
Inventory up 190% against revenue up 64% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 6.8% to 8.6%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 33% 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 50% 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?

Sales are being booked faster than collected
Receivables are up 144% against revenue up 64%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Returns on shareholder capital are falling
ROE has dropped from 19.0% to 12.8%. 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
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.
Several serious flags at once
5 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 13% a year✓ 17.8% CAGR
Latest reported year was 20.7%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 7%✓ 8.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA stays below 2x✗ 3.0x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4Free cash flow remains positive✗ -₹241 Cr
Profit that never becomes cash eventually stops being profit.
5Interest cover stays above 3x✓ 3.7x
How much operating profit can fall before interest stops being comfortably covered.

Investment Checklist

6 / 12 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
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

3 good · 5 neutral · 3 weak

Market Cap

₹6,904 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

44.0x

Expensive

Expensive — verify against sector peers

P/B Ratio

5.92x

Rich

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

EPS (TTM)

₹12.93

Profitable

Profitable on a per-share basis

ROE

12.8%

Moderate

Moderate capital efficiency

ROCE

13.4%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.93x

Moderate

Moderate leverage

Revenue Growth (YoY)

20.7%

Healthy

Healthy top-line growth

Profit Growth (YoY)

31.2%

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

-₹241 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

25.3x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

6.2%

Average

Average margins

Net Margin

3.6%

Average

Average bottom-line conversion

Current Ratio

1.41

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.35

Defensive

Steadier than the market

52W Range Position

54%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

591.3 / 607.7

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

27.5

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹2,592 Cr	₹2,745 Cr	₹3,629 Cr	₹4,238 Cr	+17.8%
EBITDA	₹177 Cr	₹225 Cr	₹304 Cr	₹367 Cr	+27.5%
EBITDA Margin	6.8%	8.2%	8.4%	8.6%	—
PAT (Net Profit)	₹71 Cr	₹93 Cr	₹115 Cr	₹149 Cr	+28.0%
EPS	₹6.31	₹8.23	₹9.85	₹12.34	+25.1%
ROE	19.0%	14.4%	12.5%	12.8%	—
ROCE	16.8%	13.8%	13.9%	13.4%	—
Total Debt	₹514 Cr	₹730 Cr	₹896 Cr	₹1,088 Cr	+28.4%
Free Cash Flow	-₹67 Cr	-₹46 Cr	-₹159 Cr	-₹241 Cr	—

🟢 Revenue has grown at 17.8% a year over 3 years.

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

🟢 EBITDA Margin has risen from 6.8% to 8.6% over 3 years (+1.8 pts).

🟢 PAT (Net Profit) has grown at 28.0% a year over 3 years.

🟢 EPS has grown at 25.1% a year over 3 years.

🔴 ROE has fallen from 19.0% to 12.8% over 3 years (-6.2 pts).

🔴 ROCE has fallen from 16.8% to 13.4% over 3 years (-3.4 pts).

🔴 Total Debt has grown at 28.4% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹3,174 Cr

Total Liabilities

₹2,009 Cr

Cash & Equivalents

₹36 Cr

Operating Cash Flow

₹100 Cr

Capex

-₹341 Cr

Shareholding (proxy)

Institutional Holding

11.8%

Insider Holding

66.7%

Analyst Consensus

Recommendations

2 Buy · 0 Hold · 0 Sell

Target Price (Mean)

₹840

+47.6% vs CMP

Target Range

₹680 – ₹1,000

Peer Comparison

Company	P/E	ROE
LARSEN & TOUBRO LTD.	30.1x	15.2%
SIEMENS LTD	88.8x	10.5%
ABB INDIA LIMITED	92.6x	19.1%

Recent News

1 mixed5 general

Hindustan Foods (BSE:519126) Stock Forecast & Analyst Predictions

Simply Wall Street, 07 OctAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Is Hindustan Foods the Best Stock in Its Sector? A Look at the Numbers

Univest, 15 Oct

Hindustan Foods Limited Fixes May 8, 2026 Record Date for Demerger Scheme

scanx.trade, 08 May

Hindustan Foods Limited's (NSE:HNDFDS) Fundamentals Look Pretty Strong: Could The Market Be Wrong About The Stock?

Simply Wall Street, 24 Jan

Hindustan Foods seeks ₹1,300 crore borrowing limit at 41st AGM

scanx.trade, 26 Aug

Hindustan Foods Limited (NSE:HNDFDS) Not Flying Under The Radar

Simply Wall Street, 06 Feb

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

StrongGrowth

MiddlingFinancial Health · Risk

WeakBusiness Quality · Profitability · Valuation

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. 5 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 ↑