Munjal Auto Industries Limited

Consumer Cyclical — Auto Parts · NSE

₹103.05−₹0.67 (−0.65%)

DalalBaazaar Score

44 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

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

In simple words: Reasonable but unspectacular business quality, 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, 7:49 pm

Understanding the Business

Company site ↗

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

What does this company do?

Munjal Auto Industries Limited manufactures and sells auto components for motor vehicles in India. It operates through Auto Components and Composite Products & Moulds segments.

IndustryAuto Parts

SectorConsumer Cyclical

Employees861

Annual revenue₹2,233 Cr

How does it make money?

Turns over ₹2,233 Cr a year. Of every ₹100 of sales, about ₹2 reaches shareholders as profit, with ₹7 left at the operating level before interest, tax and depreciation. Each of its 861 employees supports ₹2.59 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹2.59 Cr

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.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 13.1% 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.

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 +13% while net margin moved -37% 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+13%

Margin effect-37%

DalalBaazaar Score

44/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue CAGR of only 4.3% — barely ahead of inflation
✗ Profit has declined at 10.5% a year
✗ Profit is compounding slower than revenue — margins are being squeezed as the business grows

Quality vs. Valuation

Company Quality

40/ 100

Weak

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.

Weak on business quality and not cheap enough to compensate.

Historical Valuation

Current P/E

20.5x

3Y Median

21.9x

40 monthly readings · mean 21.2x · range 9.5x–33.7x

Sector Median

45.7x

median of 4 sector peers

🟡Currently trading close to its 3y median of 21.9x — the market is paying about what it usually pays for this company.

🟢Against its sector it trades 55% below the peer median of 45.7x.

vs. its own history

Fair

21.9x median over 40 months · -6%

vs. sector peers

Cheap

45.7x median of 4 peers · -55%

vs. generic bands

Fair

15x–35x

EV/EBITDA

8.9x

PEG

—

What's Good / What's Bad

🟢 What's Going Well2

Margins are improving
EBITDA margin is up from 4.7% to 7.3% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Return on equity is falling
ROE has dropped from 14.6% to 9.0% — each rupee of shareholder capital earns less than it did.

Red Flags

3 items require attention · 1 high · 2 watch

🔴Debt has risen sharplyFinancial
Total debt is up 50% over 3 years, from ₹282 Cr to ₹423 Cr.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹29 Cr in the latest year.
🟡Profit is decliningFinancial
Net profit is down 28% over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 4.7% to 7.3%. 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 55% 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?

Growth barely outpaces inflation
Revenue compounding at 4.3% 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 14.6% to 9.0%. 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

1EBITDA margin holds above 5%✓ 7.3%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA stays below 2x✗ 2.6x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
3Free cash flow remains positive✗ -₹29 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✗ 3.0x
How much operating profit can fall before interest stops being comfortably covered.
5Revenue growth stays above 4% a year✓ 4.3% CAGR
Latest reported year was 42.4%. 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

3 good · 7 neutral · 1 weak

Market Cap

₹1,031 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

20.5x

Fair

Fairly valued against the generic band

P/B Ratio

2.30x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹5.02

Profitable

Profitable on a per-share basis

ROE

9.0%

Moderate

Moderate capital efficiency

ROCE

13.1%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.91x

Moderate

Moderate leverage

Revenue Growth (YoY)

42.4%

Healthy

Healthy top-line growth

Profit Growth (YoY)

63.3%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.97%

Modest

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

Free Cash Flow

-₹29 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

3.6%

Weak

Thin margins leave little room for error

Net Margin

2.0%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.26

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.71

Defensive

Steadier than the market

52W Range Position

57%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

105.2 / 108.7

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

40.0

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1,968 Cr	₹1,868 Cr	₹2,046 Cr	₹2,233 Cr	+4.3%
EBITDA	₹92 Cr	₹122 Cr	₹133 Cr	₹162 Cr	+20.8%
EBITDA Margin	4.7%	6.5%	6.5%	7.3%	—
PAT (Net Profit)	₹56 Cr	₹38 Cr	₹36 Cr	₹40 Cr	-10.5%
EPS	₹5.61	₹3.85	₹3.64	₹4.02	-10.5%
ROE	14.6%	9.6%	8.8%	9.0%	—
ROCE	14.6%	13.2%	10.4%	13.1%	—
Total Debt	₹282 Cr	₹276 Cr	₹350 Cr	₹423 Cr	+14.6%
Free Cash Flow	₹4 Cr	₹86 Cr	-₹41 Cr	-₹29 Cr	—

🟢 Revenue has grown at 4.3% a year over 3 years.

🟢 EBITDA has grown at 20.8% a year over 3 years.

🟢 EBITDA Margin has risen from 4.7% to 7.3% over 3 years (+2.6 pts).

🔴 PAT (Net Profit) has shrunk at 10.5% a year over 3 years.

🔴 EPS has shrunk at 10.5% a year over 3 years.

🔴 ROE has fallen from 14.6% to 9.0% over 3 years (-5.6 pts).

🔴 ROCE has fallen from 14.6% to 13.1% over 3 years (-1.4 pts).

🔴 Total Debt has grown at 14.6% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹4 Cr to -₹29 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1,455 Cr

Total Liabilities

₹989 Cr

Cash & Equivalents

₹12 Cr

Operating Cash Flow

₹45 Cr

Capex

-₹73 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

75.9%

Corporate Actions

Dividend Rate

₹1

Ex-Dividend Date

20 Aug 2026

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 positive2 mixed3 general

Munjal Auto Industries shares soar 15%, hit 52-week high after Q1 results. What moved the stock?

The Economic Times, 13 AugPrice 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.

Is Munjal Auto Industries the Best Stock in Its Sector? A Look at the Numbers

Univest, 01 Oct

Munjal Auto Industries MUNJALAU Share Price Surge Explained

Kalkine India, 01 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.

Munjal Auto Industries (MUNJALAU.NS) Slips 1.75% to ₹113.44: Support at ₹107.77 in Focus - Demand Zone

siam.in, 02 Sept

Munjal Auto Industries requests XBRL refiling for FY26

scanx.trade, 08 Jul

Munjal Auto Industries consolidated net profit rises 63.25% in the June 2026 quarter

Business Standard, 12 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

MiddlingBusiness Quality · Financial Health · Valuation · Risk

WeakGrowth · Profitability

Points for each in the Score ↑

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation. 1 high-severity red flag sits above this conclusion and should be read first.

3 of 5 tripwires tripped — Debt / EBITDA stays below 2x; Free cash flow remains positive; Interest cover stays above 3x · see Key things to watch ↑