Honeywell Automation India Limited

Industrials — Electrical Equipment & Parts · NSE

₹32,115.00−₹265.00 (−0.82%)

DalalBaazaar Score

58 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

Driven by high debt relative to equity, a very high earnings multiple, which leaves little margin for disappointment.

In simple words: Strong business and financial position, with modest growth. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:01 pm

Understanding the Business

Company site ↗

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

What does this company do?

Honeywell Automation India Limited manufactures and sells industrial process control and automation systems in India and internationally. The company offers environmental and combustion controls, sensing and control solutions, and engineering services.

IndustryElectrical Equipment & Parts

SectorIndustrials

Employees3,167

Annual revenue₹4,679 Cr

How does it make money?

Turns over ₹4,679 Cr a year. Of every ₹100 of sales, about ₹11 reaches shareholders as profit, with ₹17 left at the operating level before interest, tax and depreciation. Each of its 3,167 employees supports ₹1.48 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.48 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 15.7% 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 is the outlook?

3 analysts covering the stock expect revenue to grow about 13.4% and earnings to grow about 11.2% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+13.4%

Est. earnings growth+11.2%

Analysts3

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 +36% while net margin moved -12% 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+36%

Margin effect-12%

DalalBaazaar Score

58/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ P/E of 51.5x is demanding — it needs sustained high growth to justify
✓ P/E is 25% below its own historical median of 68.4x — cheap by its own standards
✗ P/B of 6.36x 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

53/ 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

51.5x

3Y Median

68.4x

40 monthly readings · mean 70.4x · range 44.5x–114.5x

Sector Median

88.8x

median of 3 sector peers

🟢Current valuation is approximately 25% below its 3y median of 68.4x. 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 42% below the peer median of 88.8x.

vs. its own history

Cheap

68.4x median over 40 months · -25%

vs. sector peers

Cheap

88.8x median of 3 peers · -42%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

34.3x

PEG

8.28

What's Good / What's Bad

🟢 What's Going Well2

Cash generation is improving
Free cash flow is up 20% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Margins are compressing
EBITDA margin has slipped from 19.4% to 17.4% over 3 years.
Return on capital is falling
ROCE has declined from 18.5% to 15.7% — often a sign of competition or overexpansion.

Red Flags

2 items require attention · 2 high

🔴Debt has risen sharplyFinancial
Total debt is up 204% over 3 years, from ₹36 Cr to ₹111 Cr.
🔴High leverageFinancial
Debt/Equity of 2.48x — earnings must service borrowings before shareholders see anything.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 25% 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 42% 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?

Margins are being competed away
EBITDA margin has fallen from 19.4% to 17.4%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Leverage amplifies any setback
Debt/Equity of 2.48x. Interest is payable whether or not the business has a good year.
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 8% a year✓ 10.9% CAGR
Latest reported year was 1.8%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 15%✓ 17.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✓ ₹460 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.1x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 13%✓ 15.7%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

8 / 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

4 good · 4 neutral · 3 weak

Market Cap

₹28,413 Cr

Mid Cap

Mid-sized — more growth headroom, but sharper swings than large caps

P/E (Trailing)

51.5x

Expensive

Expensive — verify against sector peers

P/B Ratio

6.36x

Rich

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

EPS (TTM)

₹623.25

Profitable

Profitable on a per-share basis

ROE

11.8%

Moderate

Moderate capital efficiency

ROCE

15.7%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

2.48x

High

High leverage

Revenue Growth (YoY)

1.8%

Modest

Modest growth

Profit Growth (YoY)

20.9%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.34%

Modest

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

Free Cash Flow

₹460 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

38.7x

Improving

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

Operating Margin

13.2%

Average

Average margins

Net Margin

11.7%

Good

Strong bottom-line conversion

Current Ratio

3.52

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.56

Defensive

Steadier than the market

52W Range Position

39%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

33446.0 / 35017.5

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

26.3

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹3,432 Cr	₹4,055 Cr	₹4,182 Cr	₹4,679 Cr	+10.9%
EBITDA	₹665 Cr	₹750 Cr	₹799 Cr	₹816 Cr	+7.1%
EBITDA Margin	19.4%	18.5%	19.1%	17.4%	—
PAT (Net Profit)	₹438 Cr	₹501 Cr	₹524 Cr	₹525 Cr	+6.2%
EPS	₹495.4	₹567.13	₹592.15	₹593.81	+6.2%
ROE	13.7%	13.9%	13.0%	11.8%	—
ROCE	18.5%	18.5%	17.2%	15.7%	—
Total Debt	₹36 Cr	₹60 Cr	₹101 Cr	₹111 Cr	+44.9%
Free Cash Flow	₹382 Cr	₹407 Cr	₹398 Cr	₹460 Cr	+6.4%

🟢 Revenue has grown at 10.9% a year over 3 years.

🟢 EBITDA has grown at 7.1% a year over 3 years.

🔴 EBITDA Margin has fallen from 19.4% to 17.4% over 3 years (-1.9 pts).

🟢 PAT (Net Profit) has grown at 6.2% a year over 3 years.

🟢 EPS has grown at 6.2% a year over 3 years.

🔴 ROE has fallen from 13.7% to 11.8% over 3 years (-2.0 pts).

🔴 ROCE has fallen from 18.5% to 15.7% over 3 years (-2.8 pts).

🔴 Total Debt has grown at 44.9% a year over 3 years.

🟢 Free Cash Flow has grown at 6.4% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹6,229 Cr

Total Liabilities

₹1,766 Cr

Cash & Equivalents

₹565 Cr

Operating Cash Flow

₹493 Cr

Capex

-₹33 Cr

Shareholding (proxy)

Institutional Holding

14.1%

Insider Holding

75.1%

Corporate Actions

Next Earnings

29 Oct 2026

Dividend Rate

₹110

Ex-Dividend Date

17 Jul 2026

Analyst Consensus

Recommendations

1 Buy · 2 Hold · 1 Sell

Target Price (Mean)

₹39,925

+24.3% vs CMP

Target Range

₹37,500 – ₹44,000

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

Honeywell Automation India Limited (HONAUT.NS) Stock Price, News, Quote & History

Yahoo! Finance Canada, 01 Oct

Honeywell Automation India net profit rises 21% to ₹1,507M in Q1FY26

scanx.trade, 17 OctResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Honeywell Automation India Share Price Fall Streak

Univest, 08 OctPrice 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.

HONAUT Forecast — Price Target — Prediction for 2027

TradingView, 27 JunAnalyst view

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

Top 29 High-Priced Stocks To Invest In India In October 2026

Samco, 18 Oct

Honeywell Automation India Limited's (NSE:HONAUT) Share Price Could Signal Some Risk

Simply Wall Street, 23 Jan

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

StrongBusiness Quality · Profitability

MiddlingFinancial Health · Growth · Risk

WeakValuation

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.

All 5 tripwires holding · see Key things to watch ↑