Pavna Industries Limited

Consumer Cyclical — Auto Parts · NSE

₹14.91+₹0.01 (+0.07%)

DalalBaazaar Score

41 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

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

In simple words: The business is earning a fairly low return on the money invested in it, 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, 7:47 pm

Understanding the Business

Company site ↗

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

What does this company do?

Pavna Industries Limited, together with its subsidiaries, manufactures and sells automotive components for reputed original equipment manufacturers in India and internationally.

IndustryAuto Parts

SectorConsumer Cyclical

Employees649

Annual revenue₹297 Cr

How does it make money?

Turns over ₹297 Cr a year. Of every ₹100 of sales, about ₹2 reaches shareholders as profit, with ₹10 left at the operating level before interest, tax and depreciation. Each of its 649 employees supports ₹45.8 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹45.8 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.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 6.1% 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 -18% while net margin moved -33% 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-18%

Margin effect-33%

DalalBaazaar Score

41/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 6.4% a year
✗ Profit has declined at 18.0% a year
✗ Profit fell 37.5% in the latest year

Quality vs. Valuation

Company Quality

31/ 100

Weak

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

Valuation

83/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

Optically cheap, but the underlying business scores poorly. Cheap-and-weak is what a value trap looks like from the outside — the low price may be deserved.

Historical Valuation

Current P/E

11.5x

3Y Median

55.4x

40 monthly readings · mean 53.4x · range 24.0x–79.8x

Sector Median

45.7x

median of 4 sector peers

🟢Current valuation is approximately 79% below its 3y median of 55.4x. 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 75% below the peer median of 45.7x.

vs. its own history

Cheap

55.4x median over 40 months · -79%

vs. sector peers

Cheap

45.7x median of 4 peers · -75%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

10.7x

PEG

—

What's Good / What's Bad

🟢 What's Going Well2

Debt is being paid down
Total debt is down 19% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 13.6% to 2.3% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 18.0% to 6.1% — often a sign of competition or overexpansion.

Red Flags

2 items require attention · 1 high · 1 watch

🔴Free cash flow negative for 4 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🟡Profit is decliningFinancial
Net profit is down 45% over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Deleveraging frees up earnings
Debt is down 19% 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 79% 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 75% 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?

The debt load needs earnings to hold up
Debt is 3.8x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Returns on shareholder capital are falling
ROE has dropped from 13.6% to 2.3%. 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 8%✓ 10.0%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 3.8x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Free cash flow remains positive✗ -₹51 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✗ 2.2x
How much operating profit can fall before interest stops being comfortably covered.
5ROCE stays above 8%✗ 6.1%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

5 / 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 · 2 neutral · 4 weak

Market Cap

₹208 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

11.5x

Cheap

Cheap against the generic band

P/B Ratio

1.05x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹1.3

Profitable

Profitable on a per-share basis

ROE

2.3%

Weak

Weak capital efficiency

ROCE

6.1%

Weak

Low return on total capital employed

Debt/Equity

0.52x

Low

Conservative leverage

Revenue Growth (YoY)

52.1%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-37.5%

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

-₹51 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

4.0%

Weak

Thin margins leave little room for error

Net Margin

2.3%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.37

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.13

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

15.3 / 16.6

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

42.2

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹362 Cr	₹317 Cr	₹308 Cr	₹297 Cr	-6.4%
EBITDA	₹34 Cr	₹38 Cr	₹34 Cr	₹30 Cr	-4.0%
EBITDA Margin	9.3%	11.9%	10.9%	10.0%	—
PAT (Net Profit)	₹8 Cr	₹11 Cr	₹7 Cr	₹5 Cr	-18.0%
EPS	₹0.69	₹0.87	₹0.59	₹0.33	-21.7%
ROE	13.6%	14.5%	3.7%	2.3%	—
ROCE	18.0%	25.1%	9.5%	6.1%	—
Total Debt	₹139 Cr	₹123 Cr	₹36 Cr	₹113 Cr	-6.7%
Free Cash Flow	-₹5 Cr	-₹15 Cr	-₹25 Cr	-₹51 Cr	—

🔴 Revenue has shrunk at 6.4% a year over 3 years.

🔴 EBITDA has shrunk at 4.0% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 10.0% over 3 years.

🔴 PAT (Net Profit) has shrunk at 18.0% a year over 3 years.

🔴 EPS has shrunk at 21.7% a year over 3 years.

🔴 ROE has fallen from 13.6% to 2.3% over 3 years (-11.3 pts).

🔴 ROCE has fallen from 18.0% to 6.1% over 3 years (-11.9 pts).

🟢 Total Debt has shrunk at 6.7% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹372 Cr

Total Liabilities

₹154 Cr

Cash & Equivalents

₹2 Cr

Operating Cash Flow

-₹1 Cr

Capex

-₹50 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

78.1%

Corporate Actions

Ex-Dividend Date

21 Nov 2022

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 mixed5 general

Pavna Industries: સબસિડિયરીમાં 50.74% હિસ્સો વેચ્યો, કંપનીને મળશે ₹8.80 કરોડનું ફંડ

Whalesbook, 13 Oct

Pavna Industries sells 50.74% stake in subsidiary for ₹8.79 crore

scanx.trade, 13 Oct

Pavna Industries Q2 FY27: Date and Outlook

Univest, 10 SeptResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Investors Could Be Concerned With Pavna Industries' (NSE:PAVNAIND) Returns On Capital

Simply Wall Street, 26 Jan

Small-cap stock under ₹50 Pavna Industries surges 15% amid stock market rally

Livemint, 31 Dec

Pavna Industries: సబ్సిడరీలో వాటాల విక్రయం.. **₹8.80 కోట్ల** డీల్ పూర్తి

Whalesbook, 13 Oct

Watch Items

Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongValuation

MiddlingFinancial Health

WeakBusiness Quality · Growth · Profitability · Risk

Points for each in the Score ↑

Cheap, but for a reason

The low price is the whole case here, and the business underneath scores poorly. Cheap-and-weak is what a value trap looks like from the outside — it needs a specific reason the numbers are about to improve, not just the observation that they are low. 1 high-severity red flag sits above this conclusion and should be read first.

4 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Free cash flow remains positive; Interest cover stays above 3x; ROCE stays above 8% · see Key things to watch ↑