TEMPSENS INST (INDIA) LTD

Technology — Scientific & Technical Instruments · NSE

₹556.90+₹0.45 (+0.08%)

DalalBaazaar Score

60 / 100

🟢 Good

Verdict

NEUTRAL

Risk

Moderate

Driven by micro-cap size, which brings thin liquidity, 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. Valuation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:02 pm

Understanding the Business

Company site ↗

The 60-second version of TEMPSENS INST (INDIA) LTD — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Tempsens Instruments (India) Limited operates as a thermal engineering and specialised cable manufacturer in India and internationally. The company operates through verticals, such as Temperature sensing solutions, Electrical heating solutions, and Specialised cables.

IndustryScientific & Technical Instruments

SectorTechnology

Annual revenue₹441 Cr

How does it make money?

Turns over ₹441 Cr a year. Of every ₹100 of sales, about ₹15 reaches shareholders as profit, with ₹25 left at the operating level before interest, tax and depreciation.

Who are its competitors?

The closest listed comparisons in its industry are TATA CONSULTANCY SERV LT, INFOSYS LIMITED, HCL TECHNOLOGIES LTD, WIPRO 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 18.2% 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 ROE32.0%

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 +88% while net margin moved +8% 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+88%

Margin effect+8%

DalalBaazaar Score

60/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal

Quality vs. Valuation

Company Quality

74/ 100

Good

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

Valuation

23/ 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

69.4x

Sector Median

16.5x

median of 4 sector peers

⚠️Against its sector it trades 319% above the peer median of 16.5x.

vs. its own history

Not enough price and earnings history

vs. sector peers

Expensive

16.5x median of 4 peers · +319%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

42.3x

PEG

2.61

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 21.4% to 25.3% over 3 years.
Cash generation is improving
Free cash flow is up 3935% over 3 years.
Very low debt
Debt/Equity of 0.15x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 21.2% to 13.5% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 26.0% to 18.2% — often a sign of competition or overexpansion.

Red Flags

3 items require attention · 3 high

🔴Debt has risen sharplyFinancial
Total debt is up 195% over 3 years, from ₹26 Cr to ₹78 Cr.
🔴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.
🔴Receivables growing faster than salesFinancial
Receivables up 142% against revenue up 88% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 18.2% 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 21.4% to 25.3%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹28 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.
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?

Sales are being booked faster than collected
Receivables are up 142% against revenue up 88%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
A premium to the sector to defend
It trades 319% above the peer median. That premium needs a reason that persists, or it closes.
Returns on shareholder capital are falling
ROE has dropped from 21.2% to 13.5%. 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.
Several serious flags at once
3 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 18% a year✓ 23.3% CAGR
Latest reported year was 33.4%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 23%✓ 25.3%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✓ ₹28 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.7x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 15%✓ 18.2%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

8 / 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
✓ 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

Price history

Quick Metrics

6 good · 3 neutral · 2 weak

Market Cap

₹4,669 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

69.4x

Expensive

Expensive — verify against sector peers

P/B Ratio

9.03x

Rich

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

EPS (TTM)

₹8.03

Profitable

Profitable on a per-share basis

ROE

13.5%

Moderate

Moderate capital efficiency

ROCE

18.2%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.15x

Low

Conservative leverage

Revenue Growth (YoY)

33.4%

Healthy

Healthy top-line growth

Profit Growth (YoY)

13.9%

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

₹28 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

16.8%

Good

Healthy core-business profitability

Net Margin

14.6%

Good

Strong bottom-line conversion

Current Ratio

2.48

Comfortable

Healthy short-term liquidity

52W Range Position

48%

Mid-range

Technical Snapshot

RSI (14)

55.6

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹235 Cr	₹273 Cr	₹375 Cr	₹441 Cr	+23.3%
EBITDA	₹50 Cr	₹61 Cr	₹97 Cr	₹112 Cr	+30.3%
EBITDA Margin	21.4%	22.4%	25.9%	25.3%	—
PAT (Net Profit)	₹33 Cr	₹41 Cr	₹61 Cr	₹67 Cr	+26.5%
EPS	₹3.96	₹4.89	₹7.22	₹8.03	+26.5%
ROE	21.2%	20.0%	14.1%	13.5%	—
ROCE	26.0%	24.9%	18.7%	18.2%	—
Total Debt	₹26 Cr	₹30 Cr	₹72 Cr	₹78 Cr	+43.4%
Free Cash Flow	₹1 Cr	₹10 Cr	₹23 Cr	₹28 Cr	+243.0%

🟢 Revenue has grown at 23.3% a year over 3 years.

🟢 EBITDA has grown at 30.3% a year over 3 years.

🟢 EBITDA Margin has risen from 21.4% to 25.3% over 3 years (+3.9 pts).

🟢 PAT (Net Profit) has grown at 26.5% a year over 3 years.

🟢 EPS has grown at 26.5% a year over 3 years.

🔴 ROE has fallen from 21.2% to 13.5% over 3 years (-7.7 pts).

🔴 ROCE has fallen from 26.0% to 18.2% over 3 years (-7.8 pts).

🔴 Total Debt has grown at 43.4% a year over 3 years.

🟢 Free Cash Flow has grown at 243.0% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹661 Cr

Total Liabilities

₹136 Cr

Cash & Equivalents

₹28 Cr

Operating Cash Flow

₹42 Cr

Capex

-₹14 Cr

Shareholding (proxy)

Institutional Holding

9.2%

Insider Holding

71.7%

Peer Comparison

Company	P/E	ROE
TATA CONSULTANCY SERV LT	17.3x	45.6%
INFOSYS LIMITED	15.8x	32.0%
HCL TECHNOLOGIES LTD	20.4x	24.6%
WIPRO LTD	14.5x	15.9%

Recent News

6 general

TEMPSENS INST (INDIA) LTD Share Price

Upstox, 29 Sept

Price performance

Yahoo Finance UK, 17 Oct

Tempsens Instruments (India) IPO Details: GMP jumps 58% ahead of IPO opening on Thursday

India Infoline, 19 Aug

Tempsens Instruments Shares Make Bumper Debut, Stock Lists With 111% Premium

Outlook Money, 28 Aug

Tempsens Instruments allotment today; GMP signals 105% listing gains. Here’s how to check your status

The Economic Times, 25 Aug

Tempsens Instruments Shares More Than Double On Debut, List At 111% Premium

Outlook Business, 28 Aug

Watch Items

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

DalalBaazaar Thesis

StrongBusiness Quality · Financial Health · Growth

MiddlingProfitability

WeakValuation · Risk

Points for each in the Score ↑

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

All 5 tripwires holding · see Key things to watch ↑