Shining Tools Limited

Industrials — Tools & Accessories · BSE

₹185.00−₹4.05 (−2.14%)

DalalBaazaar Score

71 / 100

🟢 Good

Verdict

REASONABLE

Risk

Moderate

Driven by 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, 6:51 pm

Understanding the Business

Company site ↗

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

What does this company do?

Shining Tools Limited engages in the design, manufacture, and supply of solid carbide cutting tool solutions in India. The company's cutting tools includes end mills, fir-tree cutters, thread mills, drills, reamers, ballnose, and corner radius.

IndustryTools & Accessories

SectorIndustrials

Employees31

Annual revenue₹18 Cr

How does it make money?

Turns over ₹18 Cr a year. Of every ₹100 of sales, about ₹21 reaches shareholders as profit, with ₹39 left at the operating level before interest, tax and depreciation. Each of its 31 employees supports ₹59.0 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹59.0 lakh

Who are its competitors?

The closest listed comparisons in its industry are LARSEN & TOUBRO LTD., SIEMENS LTD, ABB 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 19.4% 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 ROE15.2%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +77% while net margin moved -2868% 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+77%

Margin effect-2868%

DalalBaazaar Score

71/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast
✗ Trading within 10% of its 52-week high — entries here carry more pullback risk
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

78/ 100

Good

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

Valuation

63/ 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

22.0x

1.1Y Median

22.8x

13 monthly readings · mean 30.1x · range 12.1x–58.3x

Sector Median

88.8x

median of 3 sector peers

🟡Currently trading close to its 1.1y median of 22.8x — the market is paying about what it usually pays for this company.

🟢Against its sector it trades 75% below the peer median of 88.8x.

vs. its own history

Fair

22.8x median over 13 months · -4%

vs. sector peers

Cheap

88.8x median of 3 peers · -75%

vs. generic bands

Fair

15x–35x

EV/EBITDA

15.5x

PEG

1.05

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 18.2% to 39.0% over 3 years.
Debt is being paid down
Total debt is down 33% over 3 years.
Return on equity is rising
ROE has improved from -3.9% to 15.0%.
Return on capital is rising
ROCE has improved from 13.9% to 19.4%.
Very low debt
Debt/Equity of 0.24x leaves the balance sheet with plenty of headroom.

🔴 What Needs Attention0

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

Red Flags

2 items require attention · 1 high · 1 watch

🔴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 -₹11 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 19.4% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Margin expansion has further to run
EBITDA margin has risen from 18.2% to 39.0%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Deleveraging frees up earnings
Debt is down 33% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
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.

🔴 Bear CaseWhat could go wrong?

Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
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 16% a year✓ 21.0% CAGR
Latest reported year was 9.5%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 37%✓ 39.0%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹11 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.9x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 16%✓ 19.4%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

9 / 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

₹105 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

22.0x

Fair

Fairly valued against the generic band

P/B Ratio

4.05x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹8.41

Profitable

Profitable on a per-share basis

ROE

23.0%

Strong

Strong capital efficiency

ROCE

19.4%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.24x

Low

Conservative leverage

Revenue Growth (YoY)

9.5%

Modest

Modest growth

Profit Growth (YoY)

20.9%

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

-₹16 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

ROA

11.4%

Good

Assets are working hard

Operating Margin

21.1%

Good

Healthy core-business profitability

Net Margin

21.3%

Good

Strong bottom-line conversion

Current Ratio

2.62

Comfortable

Healthy short-term liquidity

52W Range Position

91%

Near high

Near its 52-week high

Technical Snapshot

SMA 20 / SMA 50

170.8 / 129.8

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

58.5

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹10 Cr	₹11 Cr	₹15 Cr	₹18 Cr	+21.0%
EBITDA	₹2 Cr	₹4 Cr	₹7 Cr	₹7 Cr	+56.0%
EBITDA Margin	18.2%	39.4%	44.2%	39.0%	—
PAT (Net Profit)	-₹0 Cr	₹2 Cr	₹2 Cr	₹4 Cr	—
EPS	₹-0.14	₹2.78	₹3.17	—	—
ROE	-3.9%	43.8%	22.5%	15.0%	—
ROCE	13.9%	41.0%	32.2%	19.4%	—
Total Debt	₹9 Cr	₹8 Cr	₹8 Cr	₹6 Cr	-12.7%
Free Cash Flow	₹2 Cr	₹3 Cr	-₹2 Cr	-₹11 Cr	—

🟢 Revenue has grown at 21.0% a year over 3 years.

🟢 EBITDA has grown at 56.0% a year over 3 years.

🟢 EBITDA Margin has risen from 18.2% to 39.0% over 3 years (+20.8 pts).

🟢 PAT (Net Profit) has turned positive, from -₹0 Cr to ₹4 Cr.

🟢 ROE has risen from -3.9% to 15.0% over 3 years (+19.0 pts).

🟢 ROCE has risen from 13.9% to 19.4% over 3 years (+5.5 pts).

🟢 Total Debt has shrunk at 12.7% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹2 Cr to -₹11 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹36 Cr

Total Liabilities

₹10 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

₹1 Cr

Capex

-₹12 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

72.8%

Peer Comparison

Company	P/E	ROE
LARSEN & TOUBRO LTD.	30.1x	15.2%
SIEMENS LTD	88.8x	10.5%
ABB INDIA LIMITED	92.6x	19.1%

Recent News

6 general

Shining Tools Ltd Key Financial Ratios – Valuation, Profitability & More

Value Research, 21 Sept

Shining Tools Limited Addresses BSE Inquiry on Recent Share Price Movement

scanx.trade, 10 Apr

Shining Tools IPO listing today. Here's what GMP indicates ahead of debut

The Economic Times, 14 Nov

Shining Tools IPO Date, Review, Price, Allotment Details

IPO Watch, 09 Dec

Shining Tools incorporates Shinvi Tools as 55% stake subsidiary

scanx.trade, 10 Sept

SJP ULTRASONICS LTD. Stock/Share price , NSE/BSE Forecast News and Live Quotes

Equitymaster, 08 Oct

Watch Items

Trading very close to its 52-week high — momentum-driven entries here carry more mean-reversion risk.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongBusiness Quality · Financial Health · Growth · Profitability

MiddlingValuation

WeakRisk

Points for each in the Score ↑

Good business at a fair price

A sound business at a reasonable valuation. Suitable for a long-term holding, with the valuation and the direction of margins worth watching rather than the business itself. 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 ↑