Kranti Industries Limited

Consumer Cyclical — Auto Parts · BSE

₹51.00−₹0.05 (−0.10%)

DalalBaazaar Score

39 / 100

🔴 Weak

Verdict

CAUTION

Risk

High

Driven by moderate debt load, negative free cash flow, 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. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:10 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 Kranti Industries Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Kranti Industries Limited, together with its subsidiaries, manufactures and supplies precision machined components for the automobile manufacturing industry in India.

IndustryAuto Parts

SectorConsumer Cyclical

Employees212

Annual revenue₹96 Cr

How does it make money?

Turns over ₹96 Cr a year. Of every ₹100 of sales, about ₹2 reaches shareholders as profit, with ₹11 left at the operating level before interest, tax and depreciation. Each of its 212 employees supports ₹45.2 lakh of revenue a year, the signature of a people-led business.

EBITDA margin10.9%

Net margin2.4%

Revenue / employee₹45.2 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.

BOSCH LIMITEDP/E 56.9x · ROE 15.9%

MARUTI SUZUKI INDIA LTD.P/E 25.2x · ROE 13.4%

TVS MOTOR COMPANY LTDP/E 56.8x · ROE 35.8%

EICHER MOTORS LTDP/E 34.7x · ROE 23.0%

What is its competitive advantage?Little sign of one

Returns on capital of 8.7% 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.

ROCE8.7%

ROE5.2%

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 +3% while net margin moved -57% 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+3%

Margin effect-57%

DalalBaazaar Score

39/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Revenue CAGR of only 0.9% — barely ahead of inflation
✗ Profit has declined at 24.0% a year

Quality vs. Valuation

Company Quality

30/ 100

Weak

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

Valuation

78/ 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

19.8x

3Y Median

126.3x

40 monthly readings · mean 104.0x · range 14.0x–223.9x

Sector Median

45.7x

median of 4 sector peers

🟢Current valuation is approximately 84% below its 3y median of 126.3x. 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 57% below the peer median of 45.7x.

vs. its own history

Cheap

126.3x median over 40 months · -84%

vs. sector peers

Cheap

45.7x median of 4 peers · -57%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

19.8x

P/B

0.62x

EV/EBITDA

10.8x

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well1

Valuation below its historical average
At 19.8x the stock trades 84% below its own median of 126.3x.

🔴 What Needs Attention7

Margins are compressing
EBITDA margin has slipped from 14.5% to 10.9% over 3 years.
Debt is rising
Total debt is up 47% over 3 years — worth checking what it funded.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Return on equity is falling
ROE has dropped from 19.8% to 5.2% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 19.7% to 8.7% — often a sign of competition or overexpansion.
Receivables growing faster than sales
Receivables are up 113% against revenue growth of 3% — customers are taking longer to pay.
Inventory building faster than sales
Inventory is up 223% against revenue growth of 3% — stock may not be moving.

Red Flags

8 items require attention · 4 high · 4 watch

🔴Thin interest coverageFinancial
Operating profit covers interest only 1.5x — little room if earnings dip.
🔴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.
🔴Receivables growing faster than salesFinancial
Receivables up 113% against revenue up 3% — sales are being booked faster than they are collected.
🔴Inventory building faster than salesFinancial
Inventory up 223% against revenue up 3% — stock may not be moving.
🟡Debt is increasingFinancial
Total debt is up 47% over 3 years.
🟡Profit is decliningFinancial
Net profit is down 56% over 3 years.
🟡Margins are compressingFinancial
EBITDA margin is down 3.6 points over 3 years.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 21% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 84% 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 57% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 14.5% to 10.9%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The debt load needs earnings to hold up
Debt is 4.6x 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 113% against revenue up 3%. 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 0.9% 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.
Returns on shareholder capital are falling
ROE has dropped from 19.8% to 5.2%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 9%✓ 10.9%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 4.6x
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✗ -₹8 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✗ 1.5x
How much operating profit can fall before interest stops being comfortably covered.
5Revenue growth stays above 4% a year✗ 0.9% CAGR
Latest reported year was 15.5%. The bar is set below the established compounding rate, so ordinary variation does not trip it.

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

4 good · 5 neutral · 2 weak

Market Cap

₹65 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

19.8x

Fair

Fairly valued against the generic band

P/B Ratio

0.62x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹2.58

Profitable

Profitable on a per-share basis

ROE

5.2%

Weak

Weak capital efficiency

ROCE

8.7%

Moderate

Moderate return on the capital in the business

Debt/Equity

1.09x

Moderate

Moderate leverage

Revenue Growth (YoY)

15.5%

Healthy

Healthy top-line growth

Profit Growth (YoY)

212.7%

Healthy

Profits growing at a healthy clip

Dividend Yield

None

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

Free Cash Flow

-₹8 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹51

Operating Margin

4.5%

Weak

Thin margins leave little room for error

Net Margin

1.5%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.02

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

-0.44

Defensive

Steadier than the market

52W Range Position

15%

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

48.9 / 48.8

Bullish alignment (short > long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

62.7

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹93 Cr	₹85 Cr	₹75 Cr	₹96 Cr	+0.9%
EBITDA	₹14 Cr	₹9 Cr	₹6 Cr	₹10 Cr	-8.4%
EBITDA Margin	14.5%	11.1%	8.3%	10.9%	—
PAT (Net Profit)	₹5 Cr	₹1 Cr	-₹2 Cr	₹2 Cr	-24.0%
EPS	₹4.94	₹0.49	₹-1.68	₹1.8	-28.6%
ROE	19.8%	1.7%	-4.9%	5.2%	—
ROCE	19.7%	4.8%	-1.0%	8.7%	—
Total Debt	₹32 Cr	₹41 Cr	₹44 Cr	₹48 Cr	+13.8%
Free Cash Flow	-₹6 Cr	-₹8 Cr	-₹11 Cr	-₹8 Cr	—

🟡 Revenue has been broadly flat over 3 years (0.9% a year).

🔴 EBITDA has shrunk at 8.4% a year over 3 years.

🔴 EBITDA Margin has fallen from 14.5% to 10.9% over 3 years (-3.6 pts).

🔴 PAT (Net Profit) has shrunk at 24.0% a year over 3 years.

🔴 EPS has shrunk at 28.6% a year over 3 years.

🔴 ROE has fallen from 19.8% to 5.2% over 3 years (-14.5 pts).

🔴 ROCE has fallen from 19.7% to 8.7% over 3 years (-11.0 pts).

🔴 Total Debt has grown at 13.8% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹121 Cr

Total Liabilities

₹77 Cr

Total Debt

₹48 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

₹5 Cr

Capex

-₹13 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

70.9%

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

Kranti Industries Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 30 Aug

Kranti Industries consolidated net profit rises 50.00% in the March 2026 quarter

Business Standard, 01 JunResults

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

Kranti Industries Ltd. Peer Comparison – Compare with Others

Value Research, 31 Aug

Kranti Industries approves ECLGS working capital loan from HDFC Bank

scanx.trade, 13 Jun

India pacer Kranti Gaud faces gender-based abuse during IND vs PAK women's Asia Cup 2026 match; video goes viral

Livemint, 07 Sept

Kranti Industries moves up 10% after securing Defence PSU order for machining precision components

Alice Blue, 03 Feb

Watch Items

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

DalalBaazaar Thesis

🔴Business QualityWeak5.9/20

🔴Financial HealthStretched7/20

🔴GrowthWeak5/20

🔴ProfitabilityWeak4.6/15

🟢ValuationAttractive12/15

🔴RiskHigh4/10

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. 4 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above 9%10.9%
✗Debt / EBITDA falls below 3x4.6x
✗Free cash flow remains positive-₹8 Cr
✗Interest cover stays above 3x1.5x
✗Revenue growth stays above 4% a year0.9% CAGR