Talbros Engineering Limited

Consumer Cyclical — Auto Parts · BSE

₹620.00₹0.00 (0.00%)

DalalBaazaar Score

53 / 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, 6:59 pm

Understanding the Business

Company site ↗

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

What does this company do?

Talbros Engineering Limited manufactures and sells rear axle shafts for automobile companies in India and internationally. The company provides spindle shafts; light, medium, and heavy-duty axle shafts; and off-highway, tandem, straight, front, and assembled axle shafts.

IndustryAuto Parts

SectorConsumer Cyclical

Employees336

Annual revenue₹517 Cr

How does it make money?

Turns over ₹517 Cr a year. Of every ₹100 of sales, about ₹6 reaches shareholders as profit, with ₹12 left at the operating level before interest, tax and depreciation. Each of its 336 employees supports ₹1.54 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.54 Cr

Who are its competitors?

The closest listed comparisons in its industry are BOSCH LIMITED, MARUTI SUZUKI INDIA LTD., TVS MOTOR COMPANY LTD, EICHER MOTORS LTD. 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 19.1% 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 ROE23.0%

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 +21% while net margin moved -14% 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+21%

Margin effect-14%

DalalBaazaar Score

53/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue CAGR of only 6.6% — barely ahead of inflation
✗ Profit CAGR of only 1.5%
✗ Profit is compounding slower than revenue — margins are being squeezed as the business grows

Quality vs. Valuation

Company Quality

49/ 100

Average

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

Valuation

75/ 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

10.6x

3Y Median

15.0x

40 monthly readings · mean 14.8x · range 10.0x–19.5x

Sector Median

45.7x

median of 4 sector peers

🟢Current valuation is approximately 29% below its 3y median of 15.0x. 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 77% below the peer median of 45.7x.

vs. its own history

Cheap

15.0x median over 40 months · -29%

vs. sector peers

Cheap

45.7x median of 4 peers · -77%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

7.7x

PEG

7.27

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 23.4% to 16.0% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 24.9% to 19.1% — often a sign of competition or overexpansion.

Red Flags

2 items require attention · 2 watch

🟡Debt is increasingFinancial
Total debt is up 46% over 3 years.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹8 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 19.1% 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.
Priced below its own history
The stock trades 29% 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 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?

Growth barely outpaces inflation
Revenue compounding at 6.6% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
Returns on shareholder capital are falling
ROE has dropped from 23.4% to 16.0%. 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 10%✓ 11.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA stays below 2x✗ 2.5x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
3Free cash flow remains positive✗ -₹8 Cr
Profit that never becomes cash eventually stops being profit.
4Revenue growth stays above 5% a year✓ 6.6% CAGR
Latest reported year was 6.8%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
5ROCE stays above 16%✓ 19.1%
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

₹315 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

10.6x

Cheap

Cheap against the generic band

P/B Ratio

1.73x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹58.71

Profitable

Profitable on a per-share basis

ROE

16.0%

Strong

Strong capital efficiency

ROCE

19.1%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.81x

Moderate

Moderate leverage

Revenue Growth (YoY)

6.8%

Modest

Modest growth

Profit Growth (YoY)

12.5%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.48%

Modest

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

Free Cash Flow

-₹8 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

28.1x

Flat

At or above the trailing multiple — no earnings uplift is being priced in

Operating Margin

8.2%

Average

Average margins

Net Margin

5.5%

Average

Average bottom-line conversion

Current Ratio

1.21

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.20

Defensive

Steadier than the market

52W Range Position

29%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

634.4 / 633.4

Bullish alignment (short > long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

39.6

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹427 Cr	₹393 Cr	₹430 Cr	₹517 Cr	+6.6%
EBITDA	₹52 Cr	₹40 Cr	₹47 Cr	₹60 Cr	+4.6%
EBITDA Margin	12.2%	10.2%	10.9%	11.6%	—
PAT (Net Profit)	₹28 Cr	₹18 Cr	₹20 Cr	₹29 Cr	+1.5%
EPS	₹55.01	₹35.13	₹39.73	₹57.44	+1.5%
ROE	23.4%	13.2%	13.1%	16.0%	—
ROCE	24.9%	15.3%	16.6%	19.1%	—
Total Debt	₹101 Cr	₹113 Cr	₹132 Cr	₹148 Cr	+13.4%
Free Cash Flow	-₹14 Cr	-₹7 Cr	₹8 Cr	-₹8 Cr	—

🟢 Revenue has grown at 6.6% a year over 3 years.

🟢 EBITDA has grown at 4.6% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 11.6% over 3 years.

🟡 PAT (Net Profit) has been broadly flat over 3 years (1.5% a year).

🟡 EPS has been broadly flat over 3 years (1.5% a year).

🔴 ROE has fallen from 23.4% to 16.0% over 3 years (-7.4 pts).

🔴 ROCE has fallen from 24.9% to 19.1% over 3 years (-5.8 pts).

🔴 Total Debt has grown at 13.4% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹382 Cr

Total Liabilities

₹199 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

₹45 Cr

Capex

-₹53 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

82.8%

Corporate Actions

Dividend Rate

₹3

Ex-Dividend Date

23 Sept 2026

Peer Comparison

Company	P/E	ROE
BOSCH LIMITED	56.9x	15.9%
MARUTI SUZUKI INDIA LTD.	25.2x	13.4%
TVS MOTOR COMPANY LTD	56.8x	35.8%
EICHER MOTORS LTD	34.7x	23.0%

Recent News

2 positive4 general

Talbros Engineering to pay ₹3.00 dividend from Oct 6; FY26 profit up 44%

scanx.trade, 30 SeptCapital return

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

GMDC, Titagarh Rail, Mishra Dhatu Nigam, Talbros Engineering Dividends: Last Day To Buy Shares To Qualify

NDTV Profit, 22 Sept

Talbros Engineering Invests ₹25 Crores in Madhya Pradesh Facility to Fuel Future Growth

Sahi, 03 Jul

Talbros Engineering buys Pithampur plant for ₹25 crore

scanx.trade, 22 Jul

Dividend countdown begins! Last chance to buy today GMDC, Titagarh Rail, AGI Infra, others ahead of record date

Livemint, 22 SeptCapital return

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

PANCHMAHQ Stock Price and Chart — NSE:PANCHMAHQ

TradingView, 18 Aug

Watch Items

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

DalalBaazaar Thesis

StrongValuation

MiddlingFinancial Health · Profitability

WeakBusiness Quality · Growth · Risk

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