Kalyani Forge Limited

Consumer Cyclical — Auto Parts · NSE

₹801.00−₹23.30 (−2.83%)

DalalBaazaar Score

47 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

High

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

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

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:03 pm

Understanding the Business

Company site ↗

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

What does this company do?

Kalyani Forge Limited, an engineering company, manufactures and sells forged, machined, and assembled products in India.

IndustryAuto Parts

SectorConsumer Cyclical

Annual revenue₹235 Cr

How does it make money?

Turns over ₹235 Cr a year. Of every ₹100 of sales, about ₹4 reaches shareholders as profit, with ₹13 left at the operating level before interest, tax and depreciation.

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 15.2% 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?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -11% while net margin moved -5825% 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-11%

Margin effect-5825%

DalalBaazaar Score

47/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 4.0% a year

Quality vs. Valuation

Company Quality

43/ 100

Weak

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

Valuation

75/ 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

23.5x

2Y Median

35.7x

28 monthly readings · mean 37.4x · range 23.9x–59.7x

Sector Median

45.7x

median of 4 sector peers

🟢Current valuation is approximately 34% below its 2y median of 35.7x. 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 49% below the peer median of 45.7x.

vs. its own history

Cheap

35.7x median over 28 months · -34%

vs. sector peers

Cheap

45.7x median of 4 peers · -49%

vs. generic bands

Fair

15x–35x

EV/EBITDA

12.9x

PEG

—

What's Good / What's Bad

🟢 What's Going Well3

Margins are improving
EBITDA margin is up from 7.1% to 13.1% over 3 years.
Return on equity is rising
ROE has improved from -0.2% to 9.8%.
Return on capital is rising
ROCE has improved from 4.8% to 15.2%.

🔴 What Needs Attention0

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

Red Flags

4 items require attention · 3 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 177% over 3 years, from ₹38 Cr to ₹106 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 37% against revenue up -11% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 7.1% to 13.1%. 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 34% 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 49% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.

🔴 Bear CaseWhat could go wrong?

The debt load needs earnings to hold up
Debt is 3.4x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Sales are being booked faster than collected
Receivables are up 37% against revenue up -11%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
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 11%✓ 13.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 3.4x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Free cash flow remains positive✗ -₹26 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✓ 3.1x
How much operating profit can fall before interest stops being comfortably covered.
5ROCE stays above 12%✓ 15.2%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

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

3 good · 7 neutral · 1 weak

Market Cap

₹291 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

23.5x

Fair

Fairly valued against the generic band

P/B Ratio

3.05x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹34.06

Profitable

Profitable on a per-share basis

ROE

9.8%

Moderate

Moderate capital efficiency

ROCE

15.2%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

1.11x

Moderate

Moderate leverage

Revenue Growth (YoY)

4.2%

Modest

Modest growth

Profit Growth (YoY)

218.1%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.50%

Modest

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

Free Cash Flow

-₹26 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

11.4%

Average

Average margins

Net Margin

5.2%

Average

Average bottom-line conversion

Current Ratio

1.32

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

-0.22

Defensive

Steadier than the market

52W Range Position

41%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

914.3 / 858.3

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

21.2

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹265 Cr	₹236 Cr	₹236 Cr	₹235 Cr	-4.0%
EBITDA	₹19 Cr	₹24 Cr	₹26 Cr	₹31 Cr	+17.7%
EBITDA Margin	7.1%	10.1%	11.1%	13.1%	—
PAT (Net Profit)	-₹0 Cr	₹5 Cr	₹8 Cr	₹9 Cr	—
EPS	₹-0.5	₹12.51	₹22.86	₹25.6	—
ROE	-0.2%	5.5%	9.3%	9.8%	—
ROCE	4.8%	10.2%	16.7%	15.2%	—
Total Debt	₹38 Cr	₹61 Cr	₹72 Cr	₹106 Cr	+40.4%
Free Cash Flow	-₹10 Cr	-₹16 Cr	-₹3 Cr	-₹26 Cr	—

🔴 Revenue has shrunk at 4.0% a year over 3 years.

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

🟢 EBITDA Margin has risen from 7.1% to 13.1% over 3 years (+6.0 pts).

🟢 PAT (Net Profit) has turned positive, from -₹0 Cr to ₹9 Cr.

🟢 EPS has turned positive, from ₹-0.5 to ₹25.6.

🟢 ROE has risen from -0.2% to 9.8% over 3 years (+10.0 pts).

🟢 ROCE has risen from 4.8% to 15.2% over 3 years (+10.5 pts).

🔴 Total Debt has grown at 40.4% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹251 Cr

Total Liabilities

₹156 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

₹7 Cr

Capex

-₹33 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

78.1%

Corporate Actions

Dividend Rate

₹4

Ex-Dividend Date

21 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

Kalyani Forge (KALYANIFRG) Share/Stock Price Live, NSE

TechGraph, 12 Oct

Compare KALYANI FORGE with ADITYA FORGE

Equitymaster, 16 Oct

Kalyani Forge Q1FY27 Results: Net profit up 218% YoY to ₹4.48 crore

scanx.trade, 25 AugResults

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

Kalyani Forge KALYANIFRG NSE Price Movement Clarification

Kalkine India, 02 Sept

Kalyani Forge Share Price Forecast: 3 Year Outlook to 2030

Univest, 20 Jul

Kalyani Forge Ltd leads gainers in 'B' group

Business Standard, 01 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 · Valuation

MiddlingProfitability

WeakFinancial Health · Growth · 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.

2 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Free cash flow remains positive · see Key things to watch ↑