Salzer Electronics Limited

Industrials — Electrical Equipment & Parts · NSE

₹497.25+₹0.40 (+0.08%)

DalalBaazaar Score

52 / 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, 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, 8:28 pm

Understanding the Business

Company site ↗

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

What does this company do?

Salzer Electronics Limited manufactures and supplies CAM operated rotary switches, selector switches, wiring ducts, voltmeter switches, copper wires and cables, and allied products in India and internationally.

IndustryElectrical Equipment & Parts

SectorIndustrials

Employees955

Annual revenue₹1,710 Cr

How does it make money?

Turns over ₹1,710 Cr a year. Of every ₹100 of sales, about ₹3 reaches shareholders as profit, with ₹8 left at the operating level before interest, tax and depreciation. Each of its 955 employees supports ₹1.79 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.79 Cr

Who are its competitors?

The closest listed comparisons in its industry are SIEMENS LTD, ABB INDIA LIMITED, 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 16.2% 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 +65% while net margin moved -17% 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+65%

Margin effect-17%

DalalBaazaar Score

52/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROE of 8.9% is weak

Quality vs. Valuation

Company Quality

48/ 100

Average

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

Valuation

65/ 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

20.1x

3Y Median

22.7x

40 monthly readings · mean 27.7x · range 13.9x–52.9x

Sector Median

88.8x

median of 3 sector peers

🟢Current valuation is approximately 12% below its 3y median of 22.7x. 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 77% below the peer median of 88.8x.

vs. its own history

Fair

22.7x median over 40 months · -12%

vs. sector peers

Cheap

88.8x median of 3 peers · -77%

vs. generic bands

Fair

15x–35x

EV/EBITDA

10.3x

PEG

1.83

What's Good / What's Bad

🟢 What's Going Well1

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

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

2 items require attention · 2 high

🔴Debt has risen sharplyFinancial
Total debt is up 90% over 3 years, from ₹282 Cr to ₹535 Cr.
🔴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.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Cheaper than its peers
It trades 77% 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 3.9x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
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 14% a year✓ 18.2% CAGR
Latest reported year was 12.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 6%✓ 8.0%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA falls below 3x✗ 3.9x
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✗ -₹17 Cr
Profit that never becomes cash eventually stops being profit.
5Interest cover stays above 3x✓ 3.1x
How much operating profit can fall before interest stops being comfortably covered.

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

4 good · 5 neutral · 2 weak

Market Cap

₹879 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

20.1x

Fair

Fairly valued against the generic band

P/B Ratio

1.48x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹24.72

Profitable

Profitable on a per-share basis

ROE

8.9%

Moderate

Moderate capital efficiency

ROCE

16.2%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.89x

Moderate

Moderate leverage

Revenue Growth (YoY)

12.9%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-54.3%

Falling

Profits are shrinking

Dividend Yield

0.50%

Modest

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

Free Cash Flow

-₹17 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

4.9%

Weak

Thin margins leave little room for error

Net Margin

2.4%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.41

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.31

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

524.9 / 546.4

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

16.6

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1,035 Cr	₹1,164 Cr	₹1,401 Cr	₹1,710 Cr	+18.2%
EBITDA	₹88 Cr	₹110 Cr	₹129 Cr	₹137 Cr	+16.1%
EBITDA Margin	8.5%	9.5%	9.2%	8.0%	—
PAT (Net Profit)	₹39 Cr	₹46 Cr	₹51 Cr	₹53 Cr	+11.0%
EPS	₹21.9	₹25.94	₹35.21	₹29.94	+11.0%
ROE	9.5%	9.7%	9.3%	8.9%	—
ROCE	15.8%	17.0%	17.1%	16.2%	—
Total Debt	₹282 Cr	₹312 Cr	₹461 Cr	₹535 Cr	+23.8%
Free Cash Flow	-₹15 Cr	-₹23 Cr	-₹81 Cr	-₹17 Cr	—

🟢 Revenue has grown at 18.2% a year over 3 years.

🟢 EBITDA has grown at 16.1% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 8.0% over 3 years.

🟢 PAT (Net Profit) has grown at 11.0% a year over 3 years.

🟢 EPS has grown at 11.0% a year over 3 years.

🟡 ROE has held roughly flat at 8.9% over 3 years.

🟡 ROCE has held roughly flat at 16.2% over 3 years.

🔴 Total Debt has grown at 23.8% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1,372 Cr

Total Liabilities

₹769 Cr

Cash & Equivalents

₹4 Cr

Operating Cash Flow

₹46 Cr

Capex

-₹64 Cr

Shareholding (proxy)

Institutional Holding

4.1%

Insider Holding

44.0%

Corporate Actions

Dividend Rate

₹2.5

Ex-Dividend Date

28 Aug 2026

Peer Comparison

Company	P/E	ROE
SIEMENS LTD	88.8x	10.5%
ABB INDIA LIMITED	92.6x	19.1%
HAVELLS INDIA LIMITED	43.5x	17.1%

Recent News

3 mixed3 general

Salzer Electronics (SALZERELEC) 52 Week Low Streak: Weakness Continues

Univest, 16 Oct

Salzer Electronics Reports Q1 Standalone Net Profit Of 85M Rupees, Revenue At 4.85B Rupees

Sahi, 08 AugResults

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

Salzer Electronics slips after Q1 adjusted PAT drops 53% YoY

Business Standard, 10 AugResults

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

We Think Salzer Electronics (NSE:SALZERELEC) Is Taking Some Risk With Its Debt

Simply Wall Street, 09 Feb

Salzer Electronics cuts FY27 EBITDA target to 8-8.5% on cost pressures

scanx.trade, 08 Aug

Salzer Electronics Share Price Target 2027, 2028 and 2030: Long Term Analyst Forecast

Univest, 11 AugAnalyst view

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

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.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

StrongValuation

MiddlingBusiness Quality · Financial Health · Growth · Risk

WeakProfitability

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

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