Lloyds Engineering Works Limited

Industrials — Specialty Industrial Machinery · NSE

₹96.75+₹5.36 (+5.86%)

DalalBaazaar Score

57 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Very High

Driven by high debt relative to equity, negative free cash flow, small-cap size, which brings sharper price swings.

In simple words: Reasonable but unspectacular business quality, with both sales and profits growing well. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:08 pm

Caution warranted. Multiple fundamental metrics — flagged in red below — point to either valuation stretch, leverage risk, or weakening profitability. This doesn't mean avoid the stock outright, but it does mean the burden of proof is on the growth story to justify the current price.

Understanding the Business

Company site ↗

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

What does this company do?

Lloyds Engineering Works Limited provides engineering products and services in India.

IndustrySpecialty Industrial Machinery

SectorIndustrials

Employees449

Annual revenue₹1,294 Cr

How does it make money?

Turns over ₹1,294 Cr a year. Of every ₹100 of sales, about ₹15 reaches shareholders as profit, with ₹17 left at the operating level before interest, tax and depreciation. Each of its 449 employees supports ₹2.88 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin17.4%

Net margin14.7%

Revenue / employee₹2.88 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.

SIEMENS LTDP/E 88.8x · ROE 10.5%

ABB INDIA LIMITEDP/E 92.6x · ROE 19.1%

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

HAVELLS INDIA LIMITEDP/E 43.5x · ROE 17.1%

What is its competitive advantage?Little sign of one

Returns on capital of 12.2% 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.

ROCE12.2%

ROE11.4%

Peer median ROE17.1%

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 +317% while net margin moved +24% 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+317%

Margin effect+24%

DalalBaazaar Score

57/ 100

Moderate

Weighted across six categories. Every point is explained below.

• Beta of 1.18 — moves roughly with the market
✗ Small Cap: thinner liquidity and sharper drawdowns are normal
✗ High leverage magnifies any downturn in earnings
✗ Profits have swung sharply from year to year — earnings are hard to forecast
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

63/ 100

Average

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

Valuation

57/ 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

54.7x

3Y Median

111.3x

40 monthly readings · mean 117.0x · range 47.9x–289.4x

Sector Median

66.2x

median of 4 sector peers

🟢Current valuation is approximately 51% below its 3y median of 111.3x. 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 17% below the peer median of 66.2x.

vs. its own history

Cheap

111.3x median over 40 months · -51%

vs. sector peers

Fair

66.2x median of 4 peers · -17%

vs. generic bands

Expensive

Above 35x

P/E (Trailing)

54.7x

P/B

8.57x

EV/EBITDA

65.7x

PEG

0.75

Dividend Yield

0.26%

What's Good / What's Bad

🟢 What's Going Well2

Valuation below its historical average
At 54.7x the stock trades 51% below its own median of 111.3x.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention5

Debt is rising
Total debt is up 108% 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 18.8% to 11.4% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 25.8% to 12.2% — often a sign of competition or overexpansion.
Receivables growing faster than sales
Receivables are up 725% against revenue growth of 317% — customers are taking longer to pay.

Red Flags

6 items require attention · 4 high · 2 watch

🔴Debt has risen sharplyFinancial
Total debt is up 108% over 3 years, from ₹52 Cr to ₹109 Cr.
🔴High leverageFinancial
Debt/Equity of 6.45x — earnings must service borrowings before shareholders see anything.
🔴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 725% against revenue up 317% — sales are being booked faster than they are collected.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹334 Cr in the latest year.
🟡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?

Priced below its own history
The stock trades 51% 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.
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?

Leverage amplifies any setback
Debt/Equity of 6.45x. Interest is payable whether or not the business has a good year.
Sales are being booked faster than collected
Receivables are up 725% against revenue up 317%. 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 18.8% to 11.4%. 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.
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
Small 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 46% a year✓ 60.9% CAGR
Latest reported year was 142.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 15%✓ 17.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹334 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.5x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 9%✓ 12.2%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

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

3 good · 4 neutral · 4 weak

Market Cap

₹14,992 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

54.7x

Expensive

Expensive — verify against sector peers

P/B Ratio

8.57x

Rich

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

EPS (TTM)

₹1.77

Profitable

Profitable on a per-share basis

ROE

11.4%

Moderate

Moderate capital efficiency

ROCE

12.2%

Moderate

Moderate return on the capital in the business

Debt/Equity

6.45x

High

High leverage

Revenue Growth (YoY)

142.9%

Healthy

Healthy top-line growth

Profit Growth (YoY)

91.7%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.26%

Modest

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

Free Cash Flow

-₹334 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹96.75

Operating Margin

11.2%

Average

Average margins

Net Margin

13.9%

Good

Strong bottom-line conversion

Current Ratio

2.77

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

1.18

Market-like

Moves roughly in line with the market

52W Range Position

89%

Near high

Near its 52-week high

Technical Snapshot

SMA 20 / SMA 50

94.6 / 90.2

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

47.0

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹310 Cr	₹622 Cr	₹841 Cr	₹1,294 Cr	+60.9%
EBITDA	₹58 Cr	₹107 Cr	₹159 Cr	₹225 Cr	+56.9%
EBITDA Margin	18.7%	17.2%	18.9%	17.4%	—
PAT (Net Profit)	₹37 Cr	₹80 Cr	₹103 Cr	₹190 Cr	+72.8%
EPS	₹0.3	₹0.65	₹0.79	₹1.49	+71.0%
ROE	18.8%	19.4%	15.9%	11.4%	—
ROCE	25.8%	23.9%	21.0%	12.2%	—
Total Debt	₹52 Cr	₹75 Cr	₹83 Cr	₹109 Cr	+27.6%
Free Cash Flow	-₹38 Cr	-₹96 Cr	₹86 Cr	-₹334 Cr	—

🟢 Revenue has grown at 60.9% a year over 3 years.

🟢 EBITDA has grown at 56.9% a year over 3 years.

🔴 EBITDA Margin has fallen from 18.7% to 17.4% over 3 years (-1.4 pts).

🟢 PAT (Net Profit) has grown at 72.8% a year over 3 years.

🟢 EPS has grown at 71.0% a year over 3 years.

🔴 ROE has fallen from 18.8% to 11.4% over 3 years (-7.5 pts).

🔴 ROCE has fallen from 25.8% to 12.2% over 3 years (-13.6 pts).

🔴 Total Debt has grown at 27.6% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹2,369 Cr

Total Liabilities

₹686 Cr

Total Debt

₹109 Cr

Cash & Equivalents

₹335 Cr

Operating Cash Flow

-₹253 Cr

Capex

-₹81 Cr

Shareholding (proxy)

Institutional Holding

1.3%

Insider Holding

28.1%

Corporate Actions

Dividend Rate

₹0.25

Ex-Dividend Date

14 Aug 2026

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

2 mixed4 general

Lloyds Engineering Works unsecured creditors approve merger scheme with 100% votes

scanx.trade, 18 OctM&A

🟡Mixed / dependsAcquisitions change the balance sheet before they change the earnings. Look at what was paid, how it was funded, and whether debt rose.

Top 3 stocks to buy under ₹100: IRFC, Motherson Sumi, Lloyds Engineering Works by Sumeet Bagadia | Target price, SL

Livemint, 18 OctAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Should You Be Adding Lloyds Engineering Works (NSE:LLOYDSENGG) To Your Watchlist Today?

Simply Wall Street, 31 Aug

Lloyds Engineering Works Ltd Actuals & Estimates (NSE:LLOYDSENGG)

TradingView, 26 Jun

Lloyds Engineering Works - FIIs turn buyers after two quarters of selling; 15 stocks rally up to 265%, 6 turn multibaggers

The Economic Times, 22 Jun

Lloyds Engineering Issues 7.07 Crore Shares At ₹71.25 And Subsidiary Signs Tech Transfer Deal

Sahi, 17 Aug

Watch Items

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

DalalBaazaar Thesis

🟡Business QualityAdequate10.5/20

🟡Financial HealthAdequate9.9/20

🟢GrowthStrong18.5/20

🟡ProfitabilityModerate8.2/15

🔴ValuationDemanding6.7/15

🔴RiskHigh3.6/10

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

This thesis breaks if

✓Revenue growth stays above 46% a year60.9% CAGR
✓EBITDA margin holds above 15%17.4%
✗Free cash flow remains positive-₹334 Cr
✓Debt / EBITDA stays below 2x0.5x
✓ROCE stays above 9%12.2%