TD Power Systems Limited

Industrials — Specialty Industrial Machinery · NSE

₹734.95+₹0.20 (+0.03%)

DalalBaazaar Score

69 / 100

🟢 Good

Verdict

NEUTRAL

Risk

High

Driven by high debt relative to equity, small-cap size, which brings sharper price swings, a very high earnings multiple, which leaves little margin for disappointment.

In simple words: Strong business and financial position, with both sales and profits growing well. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:10 pm

Caution warranted. Multiple fundamental metrics — flagged in red below — point to either valuation stretch, leverage risk, or weakening profitability. This doesn't mean avoid the stock outright, but it does mean the burden of proof is on the growth story to justify the current price.

Understanding the Business

Company site ↗

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

What does this company do?

TD Power Systems Limited, together with its subsidiaries, manufactures and sells AC generators and electric motors in India and internationally.

IndustrySpecialty Industrial Machinery

SectorIndustrials

Employees970

Annual revenue₹1,833 Cr

How does it make money?

Turns over ₹1,833 Cr a year. Of every ₹100 of sales, about ₹13 reaches shareholders as profit, with ₹19 left at the operating level before interest, tax and depreciation. Each of its 970 employees supports ₹1.89 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin19.2%

Net margin13.0%

Revenue / employee₹1.89 Cr

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.

SIEMENS LTDP/E 88.8x · ROE 10.5%

ABB INDIA LIMITEDP/E 92.6x · ROE 19.1%

LARSEN & TOUBRO LTD.P/E 30.1x · ROE 15.2%

HAVELLS INDIA LIMITEDP/E 43.5x · ROE 17.1%

What is its competitive advantage?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 30.3%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 28.5% against a peer median of 17.1% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

ROCE30.3%

ROE28.5%

Peer median ROE17.1%

What is the outlook?

2 analysts covering the stock expect revenue to grow about 20.6% and earnings to grow about 25.8% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+20.6%

Est. earnings growth+25.8%

Analysts2

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 +116% 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+116%

Margin effect+14%

DalalBaazaar Score

69/ 100

Good

Weighted across six categories. Every point is explained below.

✗ P/E of 83.5x is demanding — it needs sustained high growth to justify
✗ P/E is 190% above its own historical median of 28.8x — expensive by its own standards
✗ P/B of 21.42x is a steep premium to book

Quality vs. Valuation

Company Quality

81/ 100

Excellent

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

Valuation

26/ 100

Expensive

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

A good business, but the price already reflects that. The quality is real; the question is whether you are overpaying for it today.

Historical Valuation

Current P/E

83.5x

3Y Median

28.8x

40 monthly readings · mean 32.8x · range 19.5x–59.0x

Sector Median

66.2x

median of 4 sector peers

⚠️Current valuation is approximately 190% above its 3y median of 28.8x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

⚠️Against its sector it trades 26% above the peer median of 66.2x.

vs. its own history

Expensive

28.8x median over 40 months · +190%

vs. sector peers

Expensive

66.2x median of 4 peers · +26%

vs. generic bands

Expensive

Above 35x

P/E (Trailing)

83.5x

P/B

21.42x

EV/EBITDA

67.1x

PEG

2.38

Dividend Yield

0.14%

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 17.6% to 19.2% over 3 years.
Return on equity is rising
ROE has improved from 16.0% to 22.3%.
Return on capital is rising
ROCE has improved from 21.2% to 30.3%.
High return on capital employed
ROCE of 30.3% is the mark of a business that converts capital into profit efficiently.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention3

Receivables growing faster than sales
Receivables are up 176% against revenue growth of 116% — customers are taking longer to pay.
Inventory building faster than sales
Inventory is up 153% against revenue growth of 116% — stock may not be moving.
Valuation above its historical average
At 83.5x the stock trades 190% above its own median of 28.8x.

Red Flags

3 items require attention · 2 high · 1 watch

🔴High leverageFinancial
Debt/Equity of 1.69x — earnings must service borrowings before shareholders see anything.
🔴Receivables growing faster than salesFinancial
Receivables up 176% against revenue up 116% — sales are being booked faster than they are collected.
🟡Inventory building faster than salesFinancial
Inventory up 153% against revenue up 116% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 30.3% 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 17.6% to 19.2%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
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?

Leverage amplifies any setback
Debt/Equity of 1.69x. Interest is payable whether or not the business has a good year.
Sales are being booked faster than collected
Receivables are up 176% against revenue up 116%. 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 190% 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.
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 22% a year✓ 29.2% CAGR
Latest reported year was 72.1%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 17%✓ 19.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✓ ₹18 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.1x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 27%✓ 30.3%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

10 / 12 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
✓ Analyst consensus isn't majority-sell
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

6 good · 2 neutral · 3 weak

Market Cap

₹23,625 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

83.5x

Expensive

Expensive — verify against sector peers

P/B Ratio

21.42x

Rich

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

EPS (TTM)

₹8.8

Profitable

Profitable on a per-share basis

ROE

28.5%

Strong

Strong capital efficiency

ROCE

30.3%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

1.69x

High

High leverage

Revenue Growth (YoY)

72.1%

Healthy

Healthy top-line growth

Profit Growth (YoY)

72.0%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.14%

Modest

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

Free Cash Flow

₹18 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹734.95

P/E (Forward)

49.4x

Improving

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

Operating Margin

17.9%

Good

Healthy core-business profitability

Net Margin

12.9%

Good

Strong bottom-line conversion

Current Ratio

1.95

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.60

Defensive

Steadier than the market

52W Range Position

78%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

775.9 / 750.7

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

47.1

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹849 Cr	₹976 Cr	₹1,256 Cr	₹1,833 Cr	+29.2%
EBITDA	₹149 Cr	₹184 Cr	₹254 Cr	₹351 Cr	+32.9%
EBITDA Margin	17.6%	18.8%	20.3%	19.2%	—
PAT (Net Profit)	₹97 Cr	₹118 Cr	₹175 Cr	₹239 Cr	+35.1%
EPS	₹6.22	₹7.58	₹11.17	₹15.28	+34.9%
ROE	16.0%	16.8%	20.3%	22.3%	—
ROCE	21.2%	22.8%	26.9%	30.3%	—
Total Debt	—	₹0 Cr	₹12 Cr	₹18 Cr	—
Free Cash Flow	₹68 Cr	₹39 Cr	-₹16 Cr	₹18 Cr	-35.3%

🟢 Revenue has grown at 29.2% a year over 3 years.

🟢 EBITDA has grown at 32.9% a year over 3 years.

🟢 EBITDA Margin has risen from 17.6% to 19.2% over 3 years (+1.6 pts).

🟢 PAT (Net Profit) has grown at 35.1% a year over 3 years.

🟢 EPS has grown at 34.9% a year over 3 years.

🟢 ROE has risen from 16.0% to 22.3% over 3 years (+6.3 pts).

🟢 ROCE has risen from 21.2% to 30.3% over 3 years (+9.1 pts).

🔴 Free Cash Flow has shrunk at 35.3% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1,877 Cr

Total Liabilities

₹805 Cr

Total Debt

₹18 Cr

Cash & Equivalents

₹78 Cr

Operating Cash Flow

₹129 Cr

Capex

-₹111 Cr

Shareholding (proxy)

Institutional Holding

37.5%

Insider Holding

26.6%

Corporate Actions

Dividend Rate

₹1.05

Ex-Dividend Date

05 Aug 2026

Analyst Consensus

Recommendations

2 Buy · 0 Hold · 0 Sell

Target Price (Mean)

₹887.75

+20.8% vs CMP

Target Range

₹875.5 – ₹900

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

1 positive4 mixed1 general

TD Power Systems Share Price News After Third Straight Fall

Univest, 15 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.

TD Power Systems (NSEI:TDPOWERSYS) Stock Forecast & Analyst Predictions

Simply Wall Street, 08 OctAnalyst view

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

Stock split alert! Last day to buy multibagger TD Power Systems shares to be eligible for 1:2 split

The Economic Times, 21 AugCapital return

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

TD Power Systems Collects ₹600 Crore Via QIP At ₹775 Per Share

Sahi, 13 Oct

TD Power Systems Raises Rs 600 Cr Through QIP

Equitypandit, 13 OctFunding

🟡Mixed / dependsNew funding changes the capital structure. Debt raises leverage; an equity raise dilutes existing holders.

TD Power Systems shares fall 4% after closing ₹600 crore QIP - These funds were issued shares

CNBC TV18, 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.

Watch Items

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

DalalBaazaar Thesis

🟢Business QualityStrong15.4/20

🟢Financial HealthStrong13.9/20

🟢GrowthStrong18.5/20

🟢ProfitabilityStrong12.9/15

🔴ValuationDemanding3.3/15

🟡RiskModerate4.8/10

Good business, demanding price

The quality is real and the price already reflects it. Buying here is a bet that the business keeps compounding for long enough to grow into the multiple — which good businesses often do, but it removes the margin for error that a lower price would have given you. 2 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓Revenue growth stays above 22% a year29.2% CAGR
✓EBITDA margin holds above 17%19.2%
✓Free cash flow remains positive₹18 Cr
✓Debt / EBITDA stays below 2x0.1x
✓ROCE stays above 27%30.3%