Indo Farm Equipment Limited

Industrials — Farm & Heavy Construction Machinery · NSE

₹131.20+₹2.18 (+1.69%)

DalalBaazaar Score

59 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Low

Driven by 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 modest growth. Nothing on this snapshot stands out as an immediate concern — the usual checks on business quality and management still apply.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:08 pm

Mixed / neutral. No major red flags jump out, but nothing here screams "obviously cheap" either. This is a name that needs a peer comparison and a view on near-term earnings triggers before sizing a position.

Understanding the Business

Company site ↗

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

What does this company do?

Indo Farm Equipment Limited manufactures and sells agricultural, industrial, and construction equipment in India and internationally. The company operates through the Tractor, Crane, NBFC, and Others segments.

IndustryFarm & Heavy Construction Machinery

SectorIndustrials

Employees745

Annual revenue₹439 Cr

How does it make money?

Turns over ₹439 Cr a year. Of every ₹100 of sales, about ₹6 reaches shareholders as profit, with ₹15 left at the operating level before interest, tax and depreciation. Each of its 745 employees supports ₹59.0 lakh of revenue a year, the signature of a people-led business.

EBITDA margin15.0%

Net margin5.6%

Revenue / employee₹59.0 lakh

Who are its competitors?

The closest listed comparisons in its industry are MAHINDRA & MAHINDRA LTD, ASHOK LEYLAND LTD, TATA MOTORS LIMITED, LARSEN & TOUBRO LTD.. These are the companies its valuation and returns are measured against elsewhere in this report.

MAHINDRA & MAHINDRA LTDP/E 17.8x · ROE 19.7%

ASHOK LEYLAND LTDP/E 25.2x · ROE 24.4%

TATA MOTORS LIMITEDP/E 37.1x · ROE 32.8%

LARSEN & TOUBRO LTD.P/E 30.1x · ROE 15.2%

What is its competitive advantage?Little sign of one

Returns on capital of 8.2% 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.

ROCE8.2%

ROE4.4%

Peer median ROE24.4%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +19% while net margin moved +35% 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+19%

Margin effect+35%

DalalBaazaar Score

59/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROCE of 8.2% is below 10% — capital is not working hard
✗ ROCE has fallen by 3.6 points — returns are eroding
• EBITDA margin of 15.0% is respectable
✗ Net margin of 5.5% is slim
• Revenue has compounded at 5.9% a year, which is the base these returns are earned on

Quality vs. Valuation

Company Quality

58/ 100

Average

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

Valuation

70/ 100

Cheap

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

25.3x

2Y Median

36.5x

23 monthly readings · mean 37.3x · range 19.5x–65.0x

Sector Median

27.6x

median of 4 sector peers

🟢Current valuation is approximately 31% below its 2y median of 36.5x. 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 is priced broadly in line with the peer median of 27.6x.

vs. its own history

Cheap

36.5x median over 23 months · -31%

vs. sector peers

Fair

27.6x median of 4 peers · -8%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

25.3x

P/B

1.14x

EV/EBITDA

10.7x

PEG

1.48

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well4

Debt is being paid down
Total debt is down 47% over 3 years.
Valuation below its historical average
At 25.3x the stock trades 31% below its own median of 36.5x.
Very low debt
Debt/Equity of 0.27x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on capital is falling
ROCE has declined from 11.8% to 8.2% — often a sign of competition or overexpansion.
Receivables growing faster than sales
Receivables are up 61% against revenue growth of 19% — customers are taking longer to pay.

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.
🟡Receivables growing faster than salesFinancial
Receivables up 61% against revenue up 19% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Deleveraging frees up earnings
Debt is down 47% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Priced below its own history
The stock trades 31% 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.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹0 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?

Sales are being booked faster than collected
Receivables are up 61% against revenue up 19%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Growth barely outpaces inflation
Revenue compounding at 5.9% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
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 13%✓ 15.0%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA stays below 2x✗ 2.3x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
3Interest cover stays above 3x✓ 3.2x
How much operating profit can fall before interest stops being comfortably covered.
4Revenue growth stays above 4% a year✓ 5.9% CAGR
Latest reported year was 14.5%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
5Free cash flow remains positive✓ ₹0 Cr
Profit that never becomes cash eventually stops being profit.

Investment Checklist

7 / 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

₹630 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

25.3x

Fair

Fairly valued against the generic band

P/B Ratio

1.14x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹5.19

Profitable

Profitable on a per-share basis

ROE

4.4%

Weak

Weak capital efficiency

ROCE

8.2%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.27x

Low

Conservative leverage

Revenue Growth (YoY)

14.5%

Healthy

Healthy top-line growth

Profit Growth (YoY)

4.4%

Modest

Slow profit growth

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

₹0 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹131.2

Operating Margin

9.8%

Average

Average margins

Net Margin

5.5%

Average

Average bottom-line conversion

Current Ratio

2.93

Comfortable

Healthy short-term liquidity

52W Range Position

13%

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

134.9 / 138.9

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

40.0

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹370 Cr	₹375 Cr	₹387 Cr	₹439 Cr	+5.9%
EBITDA	₹58 Cr	₹62 Cr	₹60 Cr	₹66 Cr	+4.5%
EBITDA Margin	15.6%	16.5%	15.4%	15.0%	—
PAT (Net Profit)	₹15 Cr	₹15 Cr	₹24 Cr	₹25 Cr	+17.1%
EPS	₹3.2	₹3.21	₹5.7	₹5.14	+17.1%
ROE	5.3%	4.9%	4.4%	4.4%	—
ROCE	11.8%	12.3%	8.0%	8.2%	—
Total Debt	₹281 Cr	₹272 Cr	₹173 Cr	₹150 Cr	-18.9%
Free Cash Flow	₹21 Cr	₹31 Cr	₹26 Cr	₹0 Cr	-80.7%

🟢 Revenue has grown at 5.9% a year over 3 years.

🟢 EBITDA has grown at 4.5% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 15.0% over 3 years.

🟢 PAT (Net Profit) has grown at 17.1% a year over 3 years.

🟢 EPS has grown at 17.1% a year over 3 years.

🟡 ROE has held roughly flat at 4.4% over 3 years.

🔴 ROCE has fallen from 11.8% to 8.2% over 3 years (-3.6 pts).

🟢 Total Debt has shrunk at 18.9% a year over 3 years.

🔴 Free Cash Flow has shrunk at 80.7% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹770 Cr

Total Liabilities

₹214 Cr

Total Debt

₹150 Cr

Cash & Equivalents

₹73 Cr

Operating Cash Flow

₹30 Cr

Capex

-₹30 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

73.5%

Peer Comparison

Company	P/E	ROE
MAHINDRA & MAHINDRA LTD	17.8x	19.7%
ASHOK LEYLAND LTD	25.2x	24.4%
TATA MOTORS LIMITED	37.1x	32.8%
LARSEN & TOUBRO LTD.	30.1x	15.2%

Recent News

1 positive1 mixed1 negative3 general

INDO FARM EQUIPMENT LTD Share Price

Upstox, 05 May

Indo Farm Equipment vs Nifty 50: Share Price Performance Compared

Univest, 29 Sept

Indo Farm maintains 20-25% FY27 revenue growth guidance on tractor demand

scanx.trade, 08 Aug

Indo Farm Equipment shares plunge 51 pc from Dalal Street debut day peak

Investment Guru India, 26 AugPrice 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.

Indo Farm Equipment Q4 Net Profit Falls 38% to ₹8.2 Cr Despite Revenue Growth

Sahi, 21 MayResults

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

Indo Farm Equipment consolidated net profit rises 4.24% in the June 2026 quarter

Business Standard, 10 AugResults

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

Watch Items

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

DalalBaazaar Thesis

🔴Business QualityWeak7.5/20

🟢Financial HealthStrong16.4/20

🟢GrowthStrong13.1/20

🔴ProfitabilityWeak6.2/15

🟢ValuationAttractive10.9/15

🟡RiskModerate5/10

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. 1 high-severity red flag sits above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above 13%15.0%
✗Debt / EBITDA stays below 2x2.3x
✓Interest cover stays above 3x3.2x
✓Revenue growth stays above 4% a year5.9% CAGR
✓Free cash flow remains positive₹0 Cr