India Nippon Electricals Limited

Consumer Cyclical — Auto Parts · NSE

₹1,168.00+₹22.90 (+2.00%)

DalalBaazaar Score

72 / 100

🟢 Good

Verdict

REASONABLE

Risk

Moderate

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

In simple words: Strong business and financial position, 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, 7:02 pm

Understanding the Business

Company site ↗

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

What does this company do?

India Nippon Electricals Limited manufactures and sells electronic ignition systems for the automotive industry in India and internationally.

IndustryAuto Parts

SectorConsumer Cyclical

Employees598

Annual revenue₹1,053 Cr

How does it make money?

Turns over ₹1,053 Cr a year. Of every ₹100 of sales, about ₹11 reaches shareholders as profit, with ₹12 left at the operating level before interest, tax and depreciation. Each of its 598 employees supports ₹1.76 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.76 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.

Compared side by side in Peers ↓

What is its competitive advantage?Some evidence

ROCE of 16.8% 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 ROE23.0%

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 +63% while net margin moved +41% 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+63%

Margin effect+41%

DalalBaazaar Score

72/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.37 — historically steadier than the index
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

78/ 100

Good

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

Valuation

67/ 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

23.0x

3Y Median

25.3x

40 monthly readings · mean 26.4x · range 18.7x–38.1x

Sector Median

45.7x

median of 4 sector peers

🟡Currently trading close to its 3y median of 25.3x — the market is paying about what it usually pays for this company.

🟢Against its sector it trades 50% below the peer median of 45.7x.

vs. its own history

Fair

25.3x median over 40 months · -9%

vs. sector peers

Cheap

45.7x median of 4 peers · -50%

vs. generic bands

Fair

15x–35x

EV/EBITDA

20.1x

PEG

0.72

What's Good / What's Bad

🟢 What's Going Well6

Margins are improving
EBITDA margin is up from 9.8% to 12.5% over 3 years.
Debt is being paid down
Total debt is down 48% over 3 years.
Return on equity is rising
ROE has improved from 8.6% to 13.5%.
Return on capital is rising
ROCE has improved from 10.2% to 16.8%.
Very low debt
Debt/Equity of 0.23x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

2 items require attention · 1 high · 1 watch

🔴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.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹2 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 9.8% to 12.5%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Deleveraging frees up earnings
Debt is down 48% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
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?

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

1Revenue growth stays above 13% a year✓ 17.7% CAGR
Latest reported year was 35.5%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 10%✓ 12.5%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹2 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.0x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 14%✓ 16.8%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

9 / 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

5 good · 5 neutral · 1 weak

Market Cap

₹2,642 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

23.0x

Fair

Fairly valued against the generic band

P/B Ratio

3.22x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹50.84

Profitable

Profitable on a per-share basis

ROE

13.5%

Moderate

Moderate capital efficiency

ROCE

16.8%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.23x

Low

Conservative leverage

Revenue Growth (YoY)

35.5%

Healthy

Healthy top-line growth

Profit Growth (YoY)

16.5%

Healthy

Profits growing at a healthy clip

Dividend Yield

1.33%

Modest

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

Free Cash Flow

-₹2 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

47.7x

Flat

At or above the trailing multiple — no earnings uplift is being priced in

Operating Margin

8.8%

Average

Average margins

Net Margin

10.0%

Good

Strong bottom-line conversion

Current Ratio

2.51

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.37

Defensive

Steadier than the market

52W Range Position

55%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

1229.0 / 1180.0

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

17.8

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹646 Cr	₹717 Cr	₹832 Cr	₹1,053 Cr	+17.7%
EBITDA	₹63 Cr	₹72 Cr	₹102 Cr	₹131 Cr	+27.6%
EBITDA Margin	9.8%	10.1%	12.3%	12.5%	—
PAT (Net Profit)	₹48 Cr	₹59 Cr	₹82 Cr	₹111 Cr	+32.1%
EPS	₹21.32	₹26.21	₹36.37	₹49.14	+32.1%
ROE	8.6%	9.5%	11.6%	13.5%	—
ROCE	10.2%	11.4%	13.7%	16.8%	—
Total Debt	₹4 Cr	₹3 Cr	₹2 Cr	₹2 Cr	-19.6%
Free Cash Flow	₹32 Cr	₹39 Cr	₹26 Cr	-₹2 Cr	—

🟢 Revenue has grown at 17.7% a year over 3 years.

🟢 EBITDA has grown at 27.6% a year over 3 years.

🟢 EBITDA Margin has risen from 9.8% to 12.5% over 3 years (+2.7 pts).

🟢 PAT (Net Profit) has grown at 32.1% a year over 3 years.

🟢 EPS has grown at 32.1% a year over 3 years.

🟢 ROE has risen from 8.6% to 13.5% over 3 years (+4.9 pts).

🟢 ROCE has risen from 10.2% to 16.8% over 3 years (+6.6 pts).

🟢 Total Debt has shrunk at 19.6% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹32 Cr to -₹2 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1,067 Cr

Total Liabilities

₹246 Cr

Cash & Equivalents

₹6 Cr

Operating Cash Flow

₹40 Cr

Capex

-₹42 Cr

Shareholding (proxy)

Institutional Holding

0.3%

Insider Holding

70.9%

Corporate Actions

Dividend Rate

₹15.5

Ex-Dividend Date

20 Feb 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

Broker’s call: India Nippon Elec (Buy)

BusinessLine, 13 Jul

India Nippon Electricals Share Price: 52-Week High Update

Univest, 10 Sept

India Nippon Electricals Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 31 Aug

India Nippon Electricals Q1FY27 net profit rises 16% to ₹270.3 cr

scanx.trade, 08 AugResults

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

India Nippon Electricals Ltd. Share Price Live Today

CNBC TV18, 03 Jan

India Nippon Electricals Ltd. Upper Circuit: Price and Key Data

Univest, 09 Sept

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 · Financial Health · Growth · Profitability

MiddlingValuation

WeakRisk

Points for each in the Score ↑

Good business at a fair price

A sound business at a reasonable valuation. Suitable for a long-term holding, with the valuation and the direction of margins worth watching rather than the business itself. 1 high-severity red flag sits above this conclusion and should be read first.

1 of 5 tripwires tripped — Free cash flow remains positive · see Key things to watch ↑