Krishna Defence and Allied Industries Limited

Industrials — Specialty Industrial Machinery · NSE

₹1,189.30−₹11.90 (−0.99%)

DalalBaazaar Score

72 / 100

🟢 Good

Verdict

NEUTRAL

Risk

High

Driven by moderate debt load, micro-cap size, which brings thin liquidity.

In simple words: Strong business and financial position, but sales are shrinking. Valuation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:47 pm

Understanding the Business

Company site ↗

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

What does this company do?

Krishna Defence and Allied Industries Limited engages in the designing, developing, and manufacturing range of equipment for defence, security, dairy, and kitchen verticals in India.

IndustrySpecialty Industrial Machinery

SectorIndustrials

Employees189

Annual revenue₹239 Cr

How does it make money?

Turns over ₹239 Cr a year. Of every ₹100 of sales, about ₹17 reaches shareholders as profit, with ₹24 left at the operating level before interest, tax and depreciation. Each of its 189 employees supports ₹1.26 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.26 Cr

Who are its competitors?

The closest listed comparisons in its industry are SIEMENS LTD, ABB INDIA LIMITED, LARSEN & TOUBRO LTD., HAVELLS INDIA LIMITED. 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 26.3% 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 ROE17.1%

What is the outlook?

1 analysts covering the stock expect revenue to grow about 30.9% and earnings to grow about 35.4% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+30.9%

Est. earnings growth+35.4%

Analysts1

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 +283% while net margin moved +103% 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+283%

Margin effect+103%

DalalBaazaar Score

72/ 100

Good

Weighted across six categories. Every point is explained below.

• Beta of 0.90 — moves roughly with the market
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast

Quality vs. Valuation

Company Quality

83/ 100

Excellent

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

Valuation

64/ 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

42.4x

3Y Median

77.8x

40 monthly readings · mean 84.2x · range 50.2x–236.6x

Sector Median

66.2x

median of 4 sector peers

🟢Current valuation is approximately 45% below its 3y median of 77.8x. 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 36% below the peer median of 66.2x.

vs. its own history

Cheap

77.8x median over 40 months · -45%

vs. sector peers

Cheap

66.2x median of 4 peers · -36%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

31.5x

PEG

0.43

What's Good / What's Bad

🟢 What's Going Well7

Margins are improving
EBITDA margin is up from 15.6% to 23.6% over 3 years.
Debt is being paid down
Total debt is down 88% over 3 years.
Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
Return on equity is rising
ROE has improved from 13.0% to 21.3%.
Return on capital is rising
ROCE has improved from 16.3% to 26.3%.
High return on capital employed
ROCE of 26.3% is the mark of a business that converts capital into profit efficiently.
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

1 item require attention · 1 watch

🟡Shareholders have been dilutedOwnership
Shares outstanding are up 30% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 26.3% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Margin expansion has further to run
EBITDA margin has risen from 15.6% to 23.6%. 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 88% 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 45% 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 36% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.

🔴 Bear CaseWhat could go wrong?

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.

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

1Revenue growth stays above 42% a year✓ 56.5% CAGR
Latest reported year was -15.2%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 22%✓ 23.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✓ ₹66 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 23%✓ 26.3%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

9 / 12 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
✓ Analyst consensus isn't majority-sell
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

5 good · 3 neutral · 3 weak

Market Cap

₹1,776 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

42.4x

Expensive

Expensive — verify against sector peers

P/B Ratio

9.18x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹28.02

Profitable

Profitable on a per-share basis

ROE

21.3%

Strong

Strong capital efficiency

ROCE

26.3%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

1.12x

Moderate

Moderate leverage

Revenue Growth (YoY)

-15.2%

Shrinking

Sales are contracting

Profit Growth (YoY)

22.6%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.11%

Modest

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

Free Cash Flow

₹66 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

24.7x

Improving

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

Operating Margin

28.8%

Good

Healthy core-business profitability

Net Margin

18.5%

Good

Strong bottom-line conversion

Current Ratio

3.99

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.90

Market-like

Moves roughly in line with the market

52W Range Position

71%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

1123.5 / 1088.6

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

65.1

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹62 Cr	₹104 Cr	₹189 Cr	₹239 Cr	+56.5%
EBITDA	₹10 Cr	₹17 Cr	₹34 Cr	₹56 Cr	+79.5%
EBITDA Margin	15.6%	16.0%	18.1%	23.6%	—
PAT (Net Profit)	₹5 Cr	₹10 Cr	₹22 Cr	₹41 Cr	+98.3%
EPS	₹4.63	₹7.87	₹15.4	—	—
ROE	13.0%	9.2%	16.9%	21.3%	—
ROCE	16.3%	13.4%	23.2%	26.3%	—
Total Debt	₹19 Cr	₹9 Cr	₹10 Cr	₹2 Cr	-51.1%
Free Cash Flow	-₹10 Cr	-₹6 Cr	-₹23 Cr	₹66 Cr	—

🟢 Revenue has grown at 56.5% a year over 3 years.

🟢 EBITDA has grown at 79.5% a year over 3 years.

🟢 EBITDA Margin has risen from 15.6% to 23.6% over 3 years (+7.9 pts).

🟢 PAT (Net Profit) has grown at 98.3% a year over 3 years.

🟢 ROE has risen from 13.0% to 21.3% over 3 years (+8.4 pts).

🟢 ROCE has risen from 16.3% to 26.3% over 3 years (+10.0 pts).

🟢 Total Debt has shrunk at 51.1% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹10 Cr to ₹66 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹217 Cr

Total Liabilities

₹24 Cr

Cash & Equivalents

₹6 Cr

Operating Cash Flow

₹86 Cr

Capex

-₹20 Cr

Corporate Actions

Dividend Rate

₹1.25

Ex-Dividend Date

08 Jul 2026

Analyst Consensus

Recommendations

1 Buy · 0 Hold · 0 Sell

Target Price (Mean)

₹1,725

+45.0% vs CMP

Target Range

₹1,725 – ₹1,725

Peer Comparison

Company	P/E	ROE
SIEMENS LTD	88.8x	10.5%
ABB INDIA LIMITED	92.6x	19.1%
LARSEN & TOUBRO LTD.	30.1x	15.2%
HAVELLS INDIA LIMITED	43.5x	17.1%

Recent News

1 positive2 mixed3 general

At ₹1,201, Is Krishna Defence and Allied Industries Limited (NSE:KRISHNADEF) Worth Looking At Closely?

Simply Wall Street, 06 Oct

Krishna Defence shares soar 20% as picks-and-shovels play gets 72% upside target

Business Today, 05 OctPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Krishna Defence and Allied Industries Ltd. (KRISHNADEF) Share Price Falls 8.3% Today

Univest, 13 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.

Krishna Defence KRISHNADEF Price Movement Clarification Oct 2026

Kalkine India, 08 Oct

Price Band Hitters, October 5, 2026 at 12:00 PM IST: MV Electrosystems, Krishna Defence, Augmont

HDFC Sky, 05 Oct

Krishna Defence FY26 net profit rises 73% to INR128 million

scanx.trade, 20 MayResults

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

Watch Items

Revenue growth is negative (-15.2%) on the latest reported period — check if this is one-off or a trend.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongBusiness Quality · Financial Health · Growth · Profitability

WeakValuation · Risk

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.

All 5 tripwires holding · see Key things to watch ↑