Loyal Equipments Limited

Industrials — Specialty Industrial Machinery · BSE

₹153.70+₹8.80 (+6.07%)

DalalBaazaar Score

55 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Moderate

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

In simple words: Strong business and financial position, 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, 6:57 pm

Understanding the Business

Company site ↗

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

What does this company do?

Loyal Equipments Limited engages in designing, manufacturing, supply, erection, and commissioning of process equipment in India and internationally.

IndustrySpecialty Industrial Machinery

SectorIndustrials

Employees112

Annual revenue₹79 Cr

How does it make money?

Turns over ₹79 Cr a year. Of every ₹100 of sales, about ₹9 reaches shareholders as profit, with ₹16 left at the operating level before interest, tax and depreciation. Each of its 112 employees supports ₹70.5 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹70.5 lakh

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 15.9% 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 has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +60% while net margin moved -30% 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+60%

Margin effect-30%

DalalBaazaar Score

55/ 100

Moderate

Weighted across six categories. Every point is explained below.

✓ Beta of 0.56 — historically steadier than the index
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

57/ 100

Average

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

Valuation

60/ 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

30.1x

3Y Median

28.8x

40 monthly readings · mean 28.6x · range 15.0x–47.6x

Sector Median

66.2x

median of 4 sector peers

🟡Currently trading close to its 3y median of 28.8x — the market is paying about what it usually pays for this company.

🟢Against its sector it trades 54% below the peer median of 66.2x.

vs. its own history

Fair

28.8x median over 40 months · +5%

vs. sector peers

Cheap

66.2x median of 4 peers · -54%

vs. generic bands

Fair

15x–35x

EV/EBITDA

14.4x

PEG

7.34

What's Good / What's Bad

🟢 What's Going Well1

Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 26.5% to 11.9% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 26.7% to 15.9% — often a sign of competition or overexpansion.

Red Flags

3 items require attention · 1 high · 2 watch

🔴Debt has risen sharplyFinancial
Total debt is up 60% over 3 years, from ₹14 Cr to ₹22 Cr.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹18 Cr in the latest year.
🟡Margins are compressingFinancial
EBITDA margin is down 3.5 points over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Cheaper than its peers
It trades 54% 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?

Margins are being competed away
EBITDA margin has fallen from 20.0% to 16.5%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Returns on shareholder capital are falling
ROE has dropped from 26.5% to 11.9%. 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.

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

1Revenue growth stays above 13% a year✓ 17.0% CAGR
Latest reported year was 63.7%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 14%✓ 16.5%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹18 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.7x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 13%✓ 15.9%
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

5 good · 5 neutral · 1 weak

Market Cap

₹166 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

30.1x

Fair

Fairly valued against the generic band

P/B Ratio

2.93x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹5.1

Profitable

Profitable on a per-share basis

ROE

11.9%

Moderate

Moderate capital efficiency

ROCE

15.9%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.39x

Low

Conservative leverage

Revenue Growth (YoY)

63.7%

Healthy

Healthy top-line growth

Profit Growth (YoY)

36.2%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.65%

Modest

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

Free Cash Flow

-₹18 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

11.0%

Average

Average margins

Net Margin

8.1%

Average

Average bottom-line conversion

Current Ratio

1.85

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.56

Defensive

Steadier than the market

52W Range Position

32%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

140.8 / 145.1

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

60.1

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹49 Cr	₹71 Cr	₹75 Cr	₹79 Cr	+17.0%
EBITDA	₹10 Cr	₹13 Cr	₹17 Cr	₹13 Cr	+9.8%
EBITDA Margin	20.0%	18.1%	22.4%	16.5%	—
PAT (Net Profit)	₹6 Cr	₹7 Cr	₹11 Cr	₹7 Cr	+4.1%
EPS	₹5.85	₹6.95	₹10.21	₹6.24	+2.2%
ROE	26.5%	24.0%	21.0%	11.9%	—
ROCE	26.7%	32.1%	27.0%	15.9%	—
Total Debt	₹14 Cr	₹14 Cr	₹11 Cr	₹22 Cr	+16.9%
Free Cash Flow	₹6 Cr	₹7 Cr	-₹2 Cr	-₹18 Cr	—

🟢 Revenue has grown at 17.0% a year over 3 years.

🟢 EBITDA has grown at 9.8% a year over 3 years.

🔴 EBITDA Margin has fallen from 20.0% to 16.5% over 3 years (-3.5 pts).

🟢 PAT (Net Profit) has grown at 4.1% a year over 3 years.

🟢 EPS has grown at 2.2% a year over 3 years.

🔴 ROE has fallen from 26.5% to 11.9% over 3 years (-14.6 pts).

🔴 ROCE has fallen from 26.7% to 15.9% over 3 years (-10.7 pts).

🔴 Total Debt has grown at 16.9% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹6 Cr to -₹18 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹93 Cr

Total Liabilities

₹36 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

₹1 Cr

Capex

-₹19 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

76.6%

Corporate Actions

Dividend Rate

₹1

Ex-Dividend Date

23 Sept 2025

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 positive1 negative4 general

Loyal Equipments shares FY26 annual report link ahead of Sep 29 AGM

scanx.trade, 29 Sept

Compare Honeywell Automation with

Equitymaster, 08 Oct

Loyal Equipments Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 30 Aug

Loyal Equip Standalone June 2026 Net Sales at Rs 18.85 crore, up 66.33% Y-o-Y

Moneycontrol.com, 11 Aug

Loyal Equipments Submits Additional Details to BSE on CEO Resignation Compliance

scanx.trade, 28 FebManagement

🔴Potentially negativeA senior departure, and an auditor's resignation especially, is worth understanding before anything else in this report.

Sandur Manganese & Iron Ores consolidated net profit rises 36.28% in the June 2026 quarter

Business Standard, 07 AugResults

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

Watch Items

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

DalalBaazaar Thesis

StrongFinancial Health

MiddlingBusiness Quality · Growth · Profitability · Valuation

WeakRisk

Points for each in the Score ↑

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. 1 high-severity red flag sits above this conclusion and should be read first.

1 of 5 tripwires tripped — Free cash flow remains positive · see Key things to watch ↑