Spectrum Electrical Industries Limited

Industrials — Electrical Equipment & Parts · NSE

₹3,813.00+₹14.20 (+0.37%)

DalalBaazaar Score

63 / 100

🟢 Good

Verdict

NEUTRAL

Risk

High

Driven by moderate debt load, negative free cash flow, small-cap size, which brings sharper price swings.

In simple words: Strong business and financial position, 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, 7:01 pm

Understanding the Business

Company site ↗

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

What does this company do?

Spectrum Electrical Industries Limited designs, manufactures, and sells electrical, automobile, and irrigation components in India.

IndustryElectrical Equipment & Parts

SectorIndustrials

Employees1,949

Annual revenue₹501 Cr

How does it make money?

Turns over ₹501 Cr a year. Of every ₹100 of sales, about ₹9 reaches shareholders as profit, with ₹17 left at the operating level before interest, tax and depreciation. Each of its 1,949 employees supports ₹25.7 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹25.7 lakh

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 16.3% 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?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +98% while net margin moved +166% 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+98%

Margin effect+166%

DalalBaazaar Score

63/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Debt/Equity of 1.02x is on the heavy side
• Current ratio of 1.34 covers short-term liabilities, without much slack
✗ Free cash flow is negative — growth is being funded by borrowing or fresh equity
• Interest cover of 4.9x is adequate
✗ Debt has grown 34.3% a year — worth checking what it bought

Quality vs. Valuation

Company Quality

68/ 100

Good

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

Valuation

54/ 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

104.2x

3Y Median

145.0x

40 monthly readings · mean 164.4x · range 74.0x–417.8x

Sector Median

88.8x

median of 3 sector peers

🟢Current valuation is approximately 28% below its 3y median of 145.0x. 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 17% above the peer median of 88.8x.

vs. its own history

Cheap

145.0x median over 40 months · -28%

vs. sector peers

Fair

88.8x median of 3 peers · +17%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

79.4x

PEG

1.41

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 11.0% to 17.0% over 3 years.
Return on equity is rising
ROE has improved from 9.6% to 18.2%.
Return on capital is rising
ROCE has improved from 13.7% to 16.3%.
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 142% over 3 years, from ₹103 Cr to ₹249 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?

Margin expansion has further to run
EBITDA margin has risen from 11.0% to 17.0%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 28% 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.
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?

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
Small 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 19% a year✓ 25.5% CAGR
Latest reported year was 80.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 15%✓ 17.0%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA stays below 2x✗ 2.9x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4Free cash flow remains positive✗ -₹48 Cr
Profit that never becomes cash eventually stops being profit.
5ROCE stays above 13%✓ 16.3%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

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

5 good · 3 neutral · 3 weak

Market Cap

₹6,515 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

104.2x

Expensive

Expensive — verify against sector peers

P/B Ratio

24.47x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹36.61

Profitable

Profitable on a per-share basis

ROE

18.2%

Strong

Strong capital efficiency

ROCE

16.3%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

1.02x

Moderate

Moderate leverage

Revenue Growth (YoY)

80.9%

Healthy

Healthy top-line growth

Profit Growth (YoY)

129.6%

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

-₹48 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

13.5%

Average

Average margins

Net Margin

8.7%

Average

Average bottom-line conversion

Current Ratio

1.34

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

-0.07

Defensive

Steadier than the market

52W Range Position

94%

Near high

Near its 52-week high

Technical Snapshot

SMA 20 / SMA 50

3634.7 / 2905.8

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

63.3

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹253 Cr	₹314 Cr	₹386 Cr	₹501 Cr	+25.5%
EBITDA	₹28 Cr	₹47 Cr	₹58 Cr	₹85 Cr	+45.1%
EBITDA Margin	11.0%	14.8%	15.1%	17.0%	—
PAT (Net Profit)	₹8 Cr	₹19 Cr	₹26 Cr	₹44 Cr	+73.9%
EPS	₹5.59	₹12.44	₹16.3	₹28.33	+71.8%
ROE	9.6%	11.8%	13.4%	18.2%	—
ROCE	13.7%	18.8%	17.1%	16.3%	—
Total Debt	₹103 Cr	₹94 Cr	₹185 Cr	₹249 Cr	+34.3%
Free Cash Flow	-₹12 Cr	-₹15 Cr	-₹88 Cr	-₹48 Cr	—

🟢 Revenue has grown at 25.5% a year over 3 years.

🟢 EBITDA has grown at 45.1% a year over 3 years.

🟢 EBITDA Margin has risen from 11.0% to 17.0% over 3 years (+6.0 pts).

🟢 PAT (Net Profit) has grown at 73.9% a year over 3 years.

🟢 EPS has grown at 71.8% a year over 3 years.

🟢 ROE has risen from 9.6% to 18.2% over 3 years (+8.6 pts).

🟢 ROCE has risen from 13.7% to 16.3% over 3 years (+2.6 pts).

🔴 Total Debt has grown at 34.3% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹668 Cr

Total Liabilities

₹423 Cr

Cash & Equivalents

₹11 Cr

Operating Cash Flow

₹94 Cr

Capex

-₹143 Cr

Shareholding (proxy)

Institutional Holding

5.4%

Insider Holding

79.6%

Corporate Actions

Ex-Dividend Date

26 May 2023

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

1 mixed5 general

Spectrum Electrical Industries vs Nifty 50 Return Comparison

Univest, 14 Oct

Spectrum Electrical Industries Ltd is Rated Hold

MarketsMojo, 17 Oct

Spectrum Electrical Industries Share Price Falls 5% Today

Univest, 13 OctPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Spectrum Electrical Industries gets trading approval for preferential shares

scanx.trade, 06 Oct

If EPS Growth Is Important To You, Spectrum Electrical Industries (NSE:SPECTRUM) Presents An Opportunity

Simply Wall Street, 16 Sept

Spectrum Electrical Industries Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 31 Aug

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 · Growth · Profitability

MiddlingRisk

WeakFinancial Health · Valuation

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

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