Veto Switchgears and Cables Limited

Industrials — Electrical Equipment & Parts · NSE

₹132.70+₹1.66 (+1.27%)

DalalBaazaar Score

57 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

High

Driven by high debt relative to equity, micro-cap size, which brings thin liquidity.

In simple words: Reasonable but unspectacular business quality, 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, 7:02 pm

Understanding the Business

Company site ↗

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

What does this company do?

Veto Switchgears and Cables Limited, together with its subsidiaries, engages in the manufacture and sale of wires and cables, and electrical accessories in India and internationally. It operates through Wire and Cables, Lighting & Fittings, and Accessories & Others segments.

IndustryElectrical Equipment & Parts

SectorIndustrials

Employees351

Annual revenue₹386 Cr

How does it make money?

Turns over ₹386 Cr a year. Of every ₹100 of sales, about ₹7 reaches shareholders as profit, with ₹10 left at the operating level before interest, tax and depreciation. Each of its 351 employees supports ₹1.10 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.10 Cr

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?Little sign of one

Returns on capital of 11.9% 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?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +33% while net margin moved -7% 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+33%

Margin effect-7%

DalalBaazaar Score

57/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROE of 8.7% is weak

Quality vs. Valuation

Company Quality

54/ 100

Average

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

Valuation

78/ 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

9.3x

3Y Median

11.3x

40 monthly readings · mean 11.7x · range 7.3x–18.5x

Sector Median

88.8x

median of 3 sector peers

🟢Current valuation is approximately 18% below its 3y median of 11.3x. 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 90% below the peer median of 88.8x.

vs. its own history

Fair

11.3x median over 40 months · -18%

vs. sector peers

Cheap

88.8x median of 3 peers · -90%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

7.0x

PEG

1.24

What's Good / What's Bad

🟢 What's Going Well2

Debt is being paid down
Total debt is down 51% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Return on capital is falling
ROCE has declined from 13.9% to 11.9% — often a sign of competition or overexpansion.

Red Flags

3 items require attention · 2 high · 1 watch

🔴High leverageFinancial
Debt/Equity of 7.39x — earnings must service borrowings before shareholders see anything.
🔴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.
🟡Margins are compressingFinancial
EBITDA margin is down 2.8 points over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Deleveraging frees up earnings
Debt is down 51% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Cheaper than its peers
It trades 90% 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?

Margins are being competed away
EBITDA margin has fallen from 13.0% to 10.2%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Leverage amplifies any setback
Debt/Equity of 7.39x. Interest is payable whether or not the business has a good year.
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
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 8% a year✓ 10.0% CAGR
Latest reported year was 37.7%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 8%✓ 10.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✓ ₹5 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.5x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 9%✓ 11.9%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

7 / 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

6 good · 4 neutral · 1 weak

Market Cap

₹254 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

9.3x

Cheap

Cheap against the generic band

P/B Ratio

0.88x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹14.33

Profitable

Profitable on a per-share basis

ROE

8.7%

Moderate

Moderate capital efficiency

ROCE

11.9%

Moderate

Moderate return on the capital in the business

Debt/Equity

7.39x

High

High leverage

Revenue Growth (YoY)

37.7%

Healthy

Healthy top-line growth

Profit Growth (YoY)

72.2%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.75%

Modest

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

Free Cash Flow

₹5 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

7.6x

Improving

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

Operating Margin

10.0%

Average

Average margins

Net Margin

6.7%

Average

Average bottom-line conversion

Current Ratio

3.19

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.38

Defensive

Steadier than the market

52W Range Position

68%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

139.1 / 130.9

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

24.5

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹290 Cr	₹300 Cr	₹300 Cr	₹386 Cr	+10.0%
EBITDA	₹38 Cr	₹35 Cr	₹33 Cr	₹39 Cr	+1.3%
EBITDA Margin	13.0%	11.7%	11.1%	10.2%	—
PAT (Net Profit)	₹20 Cr	₹18 Cr	₹22 Cr	₹25 Cr	+7.5%
EPS	₹10.59	₹9.39	₹11.59	₹13.15	+7.5%
ROE	8.7%	7.3%	8.3%	8.7%	—
ROCE	13.9%	12.7%	11.3%	11.9%	—
Total Debt	₹43 Cr	₹23 Cr	₹23 Cr	₹21 Cr	-21.0%
Free Cash Flow	₹13 Cr	₹21 Cr	-₹5 Cr	₹5 Cr	-26.3%

🟢 Revenue has grown at 10.0% a year over 3 years.

🟡 EBITDA has been broadly flat over 3 years (1.3% a year).

🔴 EBITDA Margin has fallen from 13.0% to 10.2% over 3 years (-2.8 pts).

🟢 PAT (Net Profit) has grown at 7.5% a year over 3 years.

🟢 EPS has grown at 7.5% a year over 3 years.

🟡 ROE has held roughly flat at 8.7% over 3 years.

🔴 ROCE has fallen from 13.9% to 11.9% over 3 years (-2.0 pts).

🟢 Total Debt has shrunk at 21.0% a year over 3 years.

🔴 Free Cash Flow has shrunk at 26.3% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹398 Cr

Total Liabilities

₹108 Cr

Cash & Equivalents

₹2 Cr

Operating Cash Flow

₹10 Cr

Capex

-₹5 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

50.5%

Corporate Actions

Dividend Rate

₹1

Ex-Dividend Date

21 Sept 2026

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

2 positive1 mixed3 general

Veto Switchgears and Cables (VETO.NS) Slips 1.12% to ₹131.04, Sitting at the Midpoint of Its Recent Range - NAAIM Leverage

https://www.siam.in/, 15 Oct

Is It Smart To Buy Veto Switchgears and Cables Limited (NSE:VETO) Before It Goes Ex-Dividend?

Simply Wall Street, 17 SeptCapital return

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

Veto Switchgears FY26 net profit rises to ₹238.32 crore

scanx.trade, 25 MayResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Veto Switchgears And Cables Share Price Target 2027, 2028 and 2030: Long Term Analyst Forecast

Univest, 11 AugAnalyst view

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

Veto Switchgears and Cables (VETO.NS) Slips 1.14% to ₹125.70 as Traders Watch ₹119.41 Support - ETF Inflow Streak

siam.in, 14 Sept

Veto Switchgears promoter shares free from encumbrance in FY26

scanx.trade, 29 Jun

Watch Items

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

MiddlingBusiness Quality · Growth · Risk

WeakProfitability

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

All 5 tripwires holding · see Key things to watch ↑