Stovec Industries Limited

Industrials — Specialty Industrial Machinery · BSE

₹1,490.40−₹14.10 (−0.94%)

DalalBaazaar Score

41 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

Driven by micro-cap size, which brings thin liquidity, a very high earnings multiple, which leaves little margin for disappointment, falling profits.

In simple words: The business is earning a fairly low return on the money invested in it, but sales are shrinking. Valuation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:46 pm

Understanding the Business

Company site ↗

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

What does this company do?

Stovec Industries Limited engages in the manufacturing and sale of textile machinery and consumables in India and internationally. The company operates through Textile Consumables and Textile Machinery, and Graphics Product segments.

IndustrySpecialty Industrial Machinery

SectorIndustrials

Employees244

Annual revenue₹178 Cr

How does it make money?

Turns over ₹178 Cr a year. Of every ₹100 of sales, about ₹4 reaches shareholders as profit, with ₹8 left at the operating level before interest, tax and depreciation. Each of its 244 employees supports ₹72.9 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹72.9 lakh

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.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 6.8% 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 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 -15% while net margin moved -67% 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-15%

Margin effect-67%

DalalBaazaar Score

41/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 5.1% a year
✗ Profit has declined at 34.7% a year
✗ Profit fell 17.1% in the latest year

Quality vs. Valuation

Company Quality

41/ 100

Weak

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

Valuation

39/ 100

Expensive

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

Weak on business quality and not cheap enough to compensate.

Historical Valuation

Current P/E

56.8x

4Y Median

40.2x

44 monthly readings · mean 42.8x · range 17.5x–80.8x

Sector Median

66.2x

median of 4 sector peers

⚠️Current valuation is approximately 41% above its 4y median of 40.2x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

🟡Against its sector it is priced broadly in line with the peer median of 66.2x.

vs. its own history

Expensive

40.2x median over 44 months · +41%

vs. sector peers

Fair

66.2x median of 4 peers · -14%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

19.1x

PEG

—

What's Good / What's Bad

🟢 What's Going Well1

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

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 14.3% to 5.2% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 18.4% to 6.8% — often a sign of competition or overexpansion.

Red Flags

4 items require attention · 2 high · 2 watch

🔴Significant margin compressionFinancial
EBITDA margin has fallen 6.5 points, from 14.8% to 8.3%.
🔴Receivables growing faster than salesFinancial
Receivables up 51% against revenue up -15% — sales are being booked faster than they are collected.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹5 Cr in the latest year.
🟡Profit is decliningFinancial
Net profit is down 72% over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

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?

Margins are being competed away
EBITDA margin has fallen from 14.8% to 8.3%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Sales are being booked faster than collected
Receivables are up 51% against revenue up -15%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
The price already assumes success
The stock trades 41% above its own median multiple. At this level the business has to deliver just to stand still, and a stumble is repriced twice — lower earnings on a lower multiple.
Returns on shareholder capital are falling
ROE has dropped from 14.3% to 5.2%. 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 6%✓ 8.3%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹5 Cr
Profit that never becomes cash eventually stops being profit.
3ROCE stays above 8%✗ 6.8%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
4Valuation vs its own median of 40.2x✗ 56.8x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

3 / 10 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✓ 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

2 good · 4 neutral · 5 weak

Market Cap

₹311 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

56.8x

Expensive

Expensive — verify against sector peers

P/B Ratio

2.33x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹26.23

Profitable

Profitable on a per-share basis

ROE

4.2%

Weak

Weak capital efficiency

ROCE

6.8%

Weak

Low return on total capital employed

Debt/Equity

Not available

No data

Source didn't return this field

Revenue Growth (YoY)

-7.0%

Shrinking

Sales are contracting

Profit Growth (YoY)

-17.1%

Falling

Profits are shrinking

Dividend Yield

0.81%

Modest

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

Free Cash Flow

₹14 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

11.9x

Improving

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

ROA

1.3%

Weak

Assets generate little profit

Operating Margin

4.9%

Weak

Thin margins leave little room for error

Net Margin

2.9%

Weak

Very little revenue reaches the bottom line

Current Ratio

3.29

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.26

Defensive

Steadier than the market

52W Range Position

11%

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

1571.2 / 1626.0

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

23.5

Oversold zone

Financial Trend (4-Year)

Metric	FY22	FY23	FY24	FY25	3Y CAGR
Revenue	₹208 Cr	₹184 Cr	₹211 Cr	₹178 Cr	-5.1%
EBITDA	₹31 Cr	₹18 Cr	₹25 Cr	₹15 Cr	-21.7%
EBITDA Margin	14.8%	9.7%	11.7%	8.3%	—
PAT (Net Profit)	₹25 Cr	₹9 Cr	₹13 Cr	₹7 Cr	-34.7%
EPS	₹118.61	₹43.28	₹62.07	₹33.04	-34.7%
ROE	14.3%	6.5%	10.4%	5.2%	—
ROCE	18.4%	8.2%	13.9%	6.8%	—
Free Cash Flow	₹18 Cr	₹5 Cr	₹13 Cr	-₹5 Cr	—

🔴 Revenue has shrunk at 5.1% a year over 3 years.

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

🔴 EBITDA Margin has fallen from 14.8% to 8.3% over 3 years (-6.5 pts).

🔴 PAT (Net Profit) has shrunk at 34.7% a year over 3 years.

🔴 EPS has shrunk at 34.7% a year over 3 years.

🔴 ROE has fallen from 14.3% to 5.2% over 3 years (-9.0 pts).

🔴 ROCE has fallen from 18.4% to 6.8% over 3 years (-11.6 pts).

🔴 Free Cash Flow has turned negative, from ₹18 Cr to -₹5 Cr.

Balance Sheet & Cash Flow — FY2025

Total Assets

₹168 Cr

Total Liabilities

₹36 Cr

Total Debt

—

Cash & Equivalents

₹29 Cr

Operating Cash Flow

-₹2 Cr

Capex

-₹3 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

75.4%

Corporate Actions

Dividend Rate

₹12

Ex-Dividend Date

30 Apr 2026

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 positive4 general

Stovec Industries Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 22 Sept

Stovec Industries seeks shareholder nod for appointment of two SPGPrints directors

scanx.trade, 01 Oct

Stovec Industries Ltd Valuation Shifts Signal Improved Price Attractiveness Amid Market Challenges

MarketsMojo, 09 Oct

120% dividend stock: Check amount, record date, payout history

Business Today, 13 AprCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Small-Cap Stock Recommends Big Dividend of Rs. 12/Share, Q3 Results Out Too; Buy?

Goodreturns, 24 FebCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Stovec Industries promoter shares encumbered under shareholders pact

scanx.trade, 14 Sept

Watch Items

Revenue growth is negative (-7.0%) on the latest reported period — check if this is one-off or a trend.
Cross-check against the company's latest quarterly filing / investor presentation before acting.
1 metric couldn't be retrieved for this stock — this is more common for smaller or thinly-covered listings.
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

StrongFinancial Health

MiddlingRisk

WeakBusiness Quality · Growth · Profitability · Valuation

Points for each in the Score ↑

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation. 2 high-severity red flags sit above this conclusion and should be read first.

3 of 4 tripwires tripped — Free cash flow remains positive; ROCE stays above 8%; Valuation vs its own median of 40.2x · see Key things to watch ↑