KVS Castings Limited

Consumer Cyclical — Auto Parts · BSE

₹71.16+₹3.38 (+4.99%)

DalalBaazaar Score

54 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

High

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

In simple words: Reasonable but unspectacular business quality, though profits are falling even as sales grow. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:06 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 KVS Castings Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

KVS Castings Limited engages in the manufacturing and selling of cast iron and ductile iron castings in India. It offers suspension brackets, brake drums, gear box housings, pump body products, and oil filters.

IndustryAuto Parts

SectorConsumer Cyclical

Employees118

Annual revenue₹51 Cr

How does it make money?

Turns over ₹51 Cr a year. Of every ₹100 of sales, about ₹14 reaches shareholders as profit, with ₹22 left at the operating level before interest, tax and depreciation. Each of its 118 employees supports ₹43.6 lakh of revenue a year, the signature of a people-led business.

EBITDA margin21.6%

Net margin13.7%

Revenue / employee₹43.6 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 11.7% 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.

ROCE11.7%

ROE14.2%

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 -10% while net margin moved +62% 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-10%

Margin effect+62%

DalalBaazaar Score

54/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 3.5% a year
• Profit CAGR of 13.4%
✗ Profit fell 38.2% in the latest year

Quality vs. Valuation

Company Quality

54/ 100

Average

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

16.4x

1.2Y Median

19.9x

14 monthly readings · mean 18.9x · range 14.2x–25.1x

Sector Median

45.7x

median of 4 sector peers

🟢Current valuation is approximately 18% below its 1.2y median of 19.9x. 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 64% below the peer median of 45.7x.

vs. its own history

Fair

19.9x median over 14 months · -18%

vs. sector peers

Cheap

45.7x median of 4 peers · -64%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

16.4x

P/B

2.05x

EV/EBITDA

13.9x

PEG

1.22

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well2

Margins are improving
EBITDA margin is up from 13.1% to 21.6% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention5

Debt is rising
Total debt is up 395% 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 24.4% to 10.8% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 29.5% to 11.7% — often a sign of competition or overexpansion.
Receivables growing faster than sales
Receivables are up 24% against revenue growth of -10% — customers are taking longer to pay.

Red Flags

4 items require attention · 2 high · 2 watch

🔴Debt has risen sharplyFinancial
Total debt is up 395% over 3 years, from ₹5 Cr to ₹25 Cr.
🔴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 -₹45 Cr in the latest year.
🟡Receivables growing faster than salesFinancial
Receivables up 24% against revenue up -10% — 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 13.1% to 21.6%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Cheaper than its peers
It trades 64% 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?

Sales are being booked faster than collected
Receivables are up 24% against revenue up -10%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Returns on shareholder capital are falling
ROE has dropped from 24.4% to 10.8%. 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.
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
2 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 20%✓ 21.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA stays below 2x✗ 2.2x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
3Free cash flow remains positive✗ -₹45 Cr
Profit that never becomes cash eventually stops being profit.
4ROCE stays above 9%✓ 11.7%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Valuation vs its own median of 19.9x✓ 16.4x today
A re-rating above its own history needs a reason; without one it is just a higher price.

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

2 good · 7 neutral · 2 weak

Market Cap

₹133 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

16.4x

Fair

Fairly valued against the generic band

P/B Ratio

2.05x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹4.34

Profitable

Profitable on a per-share basis

ROE

14.2%

Moderate

Moderate capital efficiency

ROCE

11.7%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.38x

Low

Conservative leverage

Revenue Growth (YoY)

2.1%

Modest

Modest growth

Profit Growth (YoY)

-38.2%

Falling

Profits are shrinking

Dividend Yield

None

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

Free Cash Flow

-₹47 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹71.16

ROA

8.4%

Good

Assets are working hard

Operating Margin

18.3%

Good

Healthy core-business profitability

Net Margin

13.7%

Good

Strong bottom-line conversion

Current Ratio

1.72

Comfortable

Healthy short-term liquidity

52W Range Position

48%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

79.5 / 81.7

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

30.9

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹57 Cr	₹54 Cr	₹50 Cr	₹51 Cr	-3.5%
EBITDA	₹7 Cr	₹9 Cr	₹10 Cr	₹11 Cr	+14.0%
EBITDA Margin	13.1%	16.5%	19.5%	21.6%	—
PAT (Net Profit)	₹5 Cr	₹6 Cr	₹7 Cr	₹7 Cr	+13.4%
EPS	₹2.58	₹3.17	₹3.51	—	—
ROE	24.4%	23.1%	19.1%	10.8%	—
ROCE	29.5%	31.4%	25.9%	11.7%	—
Total Debt	₹5 Cr	₹1 Cr	₹4 Cr	₹25 Cr	+70.4%
Free Cash Flow	₹2 Cr	₹4 Cr	₹4 Cr	-₹45 Cr	—

🔴 Revenue has shrunk at 3.5% a year over 3 years.

🟢 EBITDA has grown at 14.0% a year over 3 years.

🟢 EBITDA Margin has risen from 13.1% to 21.6% over 3 years (+8.5 pts).

🟢 PAT (Net Profit) has grown at 13.4% a year over 3 years.

🔴 ROE has fallen from 24.4% to 10.8% over 3 years (-13.6 pts).

🔴 ROCE has fallen from 29.5% to 11.7% over 3 years (-17.8 pts).

🔴 Total Debt has grown at 70.4% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹2 Cr to -₹45 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹101 Cr

Total Liabilities

₹36 Cr

Total Debt

₹25 Cr

Cash & Equivalents

₹4 Cr

Operating Cash Flow

₹5 Cr

Capex

-₹50 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

81.8%

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

6 general

KVS Castings Upper Circuit Today: Price, Data and Peers

Univest, 16 Oct

KVS Castings Ltd Key Financial Ratios – Valuation, Profitability & More

Value Research, 30 Aug

KVS Castings Limited Share Price

Upstox, 05 May

KVS Castings spurts as Unit-2 goes live; capacity jumps to 19,200 MTPA

Business Standard, 02 Mar

KVS Castings Limited Commences Operations at New Manufacturing Plant, Expands Capacity to 19200 Metric Tonnes Per Annum

scanx.trade, 01 Mar

KVS Castings shares to debut today. GMP signals cautious listing

The Economic Times, 06 Oct

Watch Items

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

DalalBaazaar Thesis

🟡Business QualityAdequate11.8/20

🟢Financial HealthStrong13/20

🔴GrowthWeak7.8/20

🟡ProfitabilityModerate8.2/15

🟡ValuationFair9.3/15

🔴RiskHigh4.3/10

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

This thesis breaks if

✓EBITDA margin holds above 20%21.6%
✗Debt / EBITDA stays below 2x2.2x
✗Free cash flow remains positive-₹45 Cr
✓ROCE stays above 9%11.7%
✓Valuation vs its own median of 19.9x16.4x today