Indag Rubber Limited

Consumer Cyclical — Auto Parts · BSE

₹102.75+₹0.10 (+0.10%)

DalalBaazaar Score

43 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

Driven by high debt relative to equity, micro-cap size, which brings thin liquidity.

In simple words: The business is earning a fairly low return on the money invested in it, with both sales and profits growing well. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:46 pm

Understanding the Business

Company site ↗

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

What does this company do?

Indag Rubber Limited manufactures and sells precured tread rubber and allied products in India and internationally. It operates through the Precured Tread Rubber and Allied Products/Services; and the Electronics Including Green Energy Storage segments.

IndustryAuto Parts

SectorConsumer Cyclical

Employees275

Annual revenue₹214 Cr

How does it make money?

Turns over ₹214 Cr a year. Of every ₹100 of sales, about ₹5 reaches shareholders as profit, with ₹8 left at the operating level before interest, tax and depreciation. Each of its 275 employees supports ₹77.8 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹77.8 lakh

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.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 4.9% 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 ROE23.0%

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved -12% while net margin moved -13% 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-12%

Margin effect-13%

DalalBaazaar Score

43/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 4.2% a year
✗ Profit has declined at 8.4% a year

Quality vs. Valuation

Company Quality

36/ 100

Weak

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

Valuation

74/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

Optically cheap, but the underlying business scores poorly. Cheap-and-weak is what a value trap looks like from the outside — the low price may be deserved.

Historical Valuation

Current P/E

19.4x

3Y Median

30.2x

40 monthly readings · mean 33.3x · range 19.5x–52.5x

Sector Median

45.7x

median of 4 sector peers

🟢Current valuation is approximately 36% below its 3y median of 30.2x. 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 58% below the peer median of 45.7x.

vs. its own history

Cheap

30.2x median over 40 months · -36%

vs. sector peers

Cheap

45.7x median of 4 peers · -58%

vs. generic bands

Fair

15x–35x

EV/EBITDA

16.9x

PEG

—

What's Good / What's Bad

🟢 What's Going Well2

Cash generation is improving
Free cash flow is up 32% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Return on capital is falling
ROCE has declined from 7.9% to 4.9% — often a sign of competition or overexpansion.

Red Flags

4 items require attention · 3 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 185% over 3 years, from ₹6 Cr to ₹18 Cr.
🔴High leverageFinancial
Debt/Equity of 7.72x — earnings must service borrowings before shareholders see anything.
🔴Inventory building faster than salesFinancial
Inventory up 63% against revenue up -12% — stock may not be moving.
🟡Profit is decliningFinancial
Net profit is down 23% over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 36% 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 58% 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?

Leverage amplifies any setback
Debt/Equity of 7.72x. Interest is payable whether or not the business has a good year.
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
3 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

1EBITDA margin holds above 6%✓ 7.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✓ ₹6 Cr
Profit that never becomes cash eventually stops being profit.
3Debt / EBITDA stays below 2x✓ 1.1x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4ROCE stays above 8%✗ 4.9%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Valuation vs its own median of 30.2x✓ 19.4x today
A re-rating above its own history needs a reason; without one it is just a higher price.

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

6 good · 2 neutral · 3 weak

Market Cap

₹270 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

19.4x

Fair

Fairly valued against the generic band

P/B Ratio

1.17x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹5.3

Profitable

Profitable on a per-share basis

ROE

4.4%

Weak

Weak capital efficiency

ROCE

4.9%

Weak

Low return on total capital employed

Debt/Equity

7.72x

High

High leverage

Revenue Growth (YoY)

55.7%

Healthy

Healthy top-line growth

Profit Growth (YoY)

278.4%

Healthy

Profits growing at a healthy clip

Dividend Yield

2.92%

Healthy

Meaningful cash return while you hold the stock

Free Cash Flow

₹6 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

6.7x

Improving

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

Operating Margin

5.8%

Average

Average margins

Net Margin

5.8%

Average

Average bottom-line conversion

Current Ratio

2.58

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.22

Defensive

Steadier than the market

52W Range Position

37%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

105.5 / 111.4

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

47.7

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹243 Cr	₹250 Cr	₹227 Cr	₹214 Cr	-4.2%
EBITDA	₹21 Cr	₹25 Cr	₹11 Cr	₹17 Cr	-6.8%
EBITDA Margin	8.5%	10.0%	4.8%	7.8%	—
PAT (Net Profit)	₹13 Cr	₹16 Cr	₹7 Cr	₹10 Cr	-8.4%
EPS	₹5.04	₹6.15	₹2.49	₹3.88	-8.3%
ROE	6.2%	7.1%	2.9%	4.4%	—
ROCE	7.9%	8.7%	2.8%	4.9%	—
Total Debt	₹6 Cr	₹10 Cr	₹9 Cr	₹18 Cr	+41.8%
Free Cash Flow	₹5 Cr	₹6 Cr	-₹1 Cr	₹6 Cr	+9.6%

🔴 Revenue has shrunk at 4.2% a year over 3 years.

🔴 EBITDA has shrunk at 6.8% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 7.8% over 3 years.

🔴 PAT (Net Profit) has shrunk at 8.4% a year over 3 years.

🔴 EPS has shrunk at 8.3% a year over 3 years.

🔴 ROE has fallen from 6.2% to 4.4% over 3 years (-1.8 pts).

🔴 ROCE has fallen from 7.9% to 4.9% over 3 years (-3.0 pts).

🔴 Total Debt has grown at 41.8% a year over 3 years.

🟢 Free Cash Flow has grown at 9.6% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹306 Cr

Total Liabilities

₹73 Cr

Cash & Equivalents

₹4 Cr

Operating Cash Flow

₹9 Cr

Capex

-₹3 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

80.6%

Corporate Actions

Dividend Rate

₹3

Ex-Dividend Date

05 Aug 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 positive5 general

Indag Rubber Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 30 Aug

Indag Rubber Ltd. Upper Circuit Today: Price, Data and Peers

Univest, 01 Oct

Indag Rubber receives separate ₹1.77 lakh GST notice for FY23

scanx.trade, 25 Sept

Indag Rubber FY26 PAT rises 47% to ₹12.38 crore

scanx.trade, 28 May

Indag Rubber Q1 FY27 Results: Revenue Up 56%, PAT Rs 5 Cr

Univest, 14 AugResults

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

Indag Rubber Ltd

Equitypandit, 22 Jan

Watch Items

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

DalalBaazaar Thesis

StrongValuation

MiddlingFinancial Health

WeakBusiness Quality · Growth · Profitability · Risk

Points for each in the Score ↑

Cheap, but for a reason

The low price is the whole case here, and the business underneath scores poorly. Cheap-and-weak is what a value trap looks like from the outside — it needs a specific reason the numbers are about to improve, not just the observation that they are low. 3 high-severity red flags sit above this conclusion and should be read first.

1 of 5 tripwires tripped — ROCE stays above 8% · see Key things to watch ↑