Pennar Industries Limited

Industrials — Specialty Industrial Machinery · NSE

₹172.00+₹0.41 (+0.24%)

DalalBaazaar Score

58 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

High

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

In simple words: Strong business and financial position, with modest growth. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:08 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 Pennar Industries Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Pennar Industries Limited operates as an engineering company in India and internationally.

IndustrySpecialty Industrial Machinery

SectorIndustrials

Employees2,838

Annual revenue₹3,509 Cr

How does it make money?

Turns over ₹3,509 Cr a year. Of every ₹100 of sales, about ₹4 reaches shareholders as profit, with ₹10 left at the operating level before interest, tax and depreciation. Each of its 2,838 employees supports ₹1.24 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin10.1%

Net margin4.0%

Revenue / employee₹1.24 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?Some evidence

ROCE of 17.4% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

ROCE17.4%

ROE11.9%

Peer median ROE17.1%

What is the outlook?

1 analysts covering the stock expect revenue to grow about 13.5% and earnings to grow about 21.0% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+13.5%

Est. earnings growth+21.0%

Analysts1

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 +64% while net margin moved +13% 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+64%

Margin effect+13%

DalalBaazaar Score

58/ 100

Moderate

Weighted across six categories. Every point is explained below.

• ROE of 11.9% is moderate

Quality vs. Valuation

Company Quality

55/ 100

Average

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

Valuation

77/ 100

Cheap

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

16.3x

3Y Median

24.2x

40 monthly readings · mean 23.6x · range 14.8x–35.3x

Sector Median

66.2x

median of 4 sector peers

🟢Current valuation is approximately 32% below its 3y median of 24.2x. 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 66.2x.

vs. its own history

Cheap

24.2x median over 40 months · -32%

vs. sector peers

Cheap

66.2x median of 4 peers · -75%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

16.3x

P/B

2.00x

EV/EBITDA

9.2x

PEG

0.72

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well2

Valuation below its historical average
At 16.3x the stock trades 32% below its own median of 24.2x.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention3

Debt is rising
Total debt is up 69% over 3 years — worth checking what it funded.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Receivables growing faster than sales
Receivables are up 101% against revenue growth of 64% — customers are taking longer to pay.

Red Flags

4 items require attention · 2 high · 2 watch

🔴Debt has risen sharplyFinancial
Total debt is up 69% over 3 years, from ₹685 Cr to ₹1,158 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 -₹126 Cr in the latest year.
🟡Receivables growing faster than salesFinancial
Receivables up 101% against revenue up 64% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 32% 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 3.3x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Sales are being booked faster than collected
Receivables are up 101% against revenue up 64%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
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

1Revenue growth stays above 13% a year✓ 17.8% CAGR
Latest reported year was 2.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 8%✓ 10.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA falls below 3x✗ 3.3x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
4Free cash flow remains positive✗ -₹126 Cr
Profit that never becomes cash eventually stops being profit.
5Interest cover stays above 3x✗ 2.9x
How much operating profit can fall before interest stops being comfortably covered.

Investment Checklist

9 / 12 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
✓ Analyst consensus isn't majority-sell
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

3 good · 7 neutral · 1 weak

Market Cap

₹2,321 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

16.3x

Fair

Fairly valued against the generic band

P/B Ratio

2.00x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹10.54

Profitable

Profitable on a per-share basis

ROE

11.9%

Moderate

Moderate capital efficiency

ROCE

17.4%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

1.00x

Moderate

Moderate leverage

Revenue Growth (YoY)

2.9%

Modest

Modest growth

Profit Growth (YoY)

10.5%

Healthy

Profits growing at a healthy clip

Dividend Yield

None

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

Free Cash Flow

-₹126 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹172

P/E (Forward)

11.9x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

7.9%

Average

Average margins

Net Margin

3.9%

Average

Average bottom-line conversion

Current Ratio

1.13

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

-0.11

Defensive

Steadier than the market

52W Range Position

28%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

176.4 / 169.0

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

35.8

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹2,145 Cr	₹3,028 Cr	₹3,121 Cr	₹3,509 Cr	+17.8%
EBITDA	₹242 Cr	₹282 Cr	₹305 Cr	₹356 Cr	+13.7%
EBITDA Margin	11.3%	9.3%	9.8%	10.1%	—
PAT (Net Profit)	₹75 Cr	₹98 Cr	₹119 Cr	₹139 Cr	+22.5%
EPS	₹5.49	₹7.29	₹8.84	₹10.29	+23.3%
ROE	9.7%	11.2%	11.9%	11.9%	—
ROCE	16.7%	18.6%	18.0%	17.4%	—
Total Debt	₹685 Cr	₹785 Cr	₹812 Cr	₹1,158 Cr	+19.1%
Free Cash Flow	₹173 Cr	-₹22 Cr	₹130 Cr	-₹126 Cr	—

🟢 Revenue has grown at 17.8% a year over 3 years.

🟢 EBITDA has grown at 13.7% a year over 3 years.

🔴 EBITDA Margin has fallen from 11.3% to 10.1% over 3 years (-1.1 pts).

🟢 PAT (Net Profit) has grown at 22.5% a year over 3 years.

🟢 EPS has grown at 23.3% a year over 3 years.

🟢 ROE has risen from 9.7% to 11.9% over 3 years (+2.2 pts).

🟡 ROCE has held roughly flat at 17.4% over 3 years.

🔴 Total Debt has grown at 19.1% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹173 Cr to -₹126 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹3,551 Cr

Total Liabilities

₹2,387 Cr

Total Debt

₹1,158 Cr

Cash & Equivalents

₹206 Cr

Operating Cash Flow

₹202 Cr

Capex

-₹328 Cr

Shareholding (proxy)

Institutional Holding

7.0%

Insider Holding

42.5%

Corporate Actions

Ex-Dividend Date

19 Jul 2013

Analyst Consensus

Recommendations

1 Buy · 0 Hold · 0 Sell

Target Price (Mean)

₹260

+51.2% vs CMP

Target Range

₹260 – ₹260

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 mixed1 negative3 general

Pennar Industries (PENIND.NS) Edges Up to ₹172.96 as Stock Holds Mid-Range Ground - Vol Target Rebalance

www.siam.in, 12 Oct

Pennar Industries Co-Promoter Pledges 31.73 Lakh Shares Representing 2.35% Stake

Sahi, 19 JunOwnership

🔴Potentially negativePromoter selling or pledging is a signal worth understanding, though the reason is often personal rather than about the business.

Pennar Industries (NSEI:PENIND) Stock Forecast & Analyst Predictions

Simply Wall Street, 16 AugAnalyst view

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

PENIND Forecast — Price Target — Prediction for 2027

TradingView, 25 JunAnalyst view

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

Pennar Industries Share Price Forecast: 3 Year Outlook to 2030

Univest, 23 Jul

Pennar Industries - Unique Picks: 6 stocks held by a single MF scheme in May; surge up to 60% in CY26

The Economic Times, 11 Jun

Watch Items

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

DalalBaazaar Thesis

🟡Business QualityAdequate10.3/20

🟡Financial HealthAdequate9.8/20

🟢GrowthStrong14.9/20

🔴ProfitabilityWeak6.5/15

🟢ValuationAttractive10.7/15

🟡RiskModerate5.4/10

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

✓Revenue growth stays above 13% a year17.8% CAGR
✓EBITDA margin holds above 8%10.1%
✗Debt / EBITDA falls below 3x3.3x
✗Free cash flow remains positive-₹126 Cr
✗Interest cover stays above 3x2.9x