Wheels India Limited

Consumer Cyclical — Auto Parts · NSE

₹2,435.00+₹35.50 (+1.48%)

DalalBaazaar Score

56 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Moderate

Driven by short-term liabilities exceed short-term assets, small-cap size, which brings sharper price swings.

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

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:08 pm

Mixed / neutral. No major red flags jump out, but nothing here screams "obviously cheap" either. This is a name that needs a peer comparison and a view on near-term earnings triggers before sizing a position.

Understanding the Business

Company site ↗

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

What does this company do?

Wheels India Limited, together with its subsidiary, manufactures and sells automotive and industrial components in India and internationally.

IndustryAuto Parts

SectorConsumer Cyclical

Employees2,735

Annual revenue₹5,049 Cr

How does it make money?

Turns over ₹5,049 Cr a year. Of every ₹100 of sales, about ₹3 reaches shareholders as profit, with ₹9 left at the operating level before interest, tax and depreciation. Each of its 2,735 employees supports ₹1.85 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin8.8%

Net margin3.1%

Revenue / employee₹1.85 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.

BOSCH LIMITEDP/E 56.9x · ROE 15.9%

MARUTI SUZUKI INDIA LTD.P/E 25.2x · ROE 13.4%

TVS MOTOR COMPANY LTDP/E 56.8x · ROE 35.8%

EICHER MOTORS LTDP/E 34.7x · ROE 23.0%

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

ROCE has stayed above 15% in every year available and stands at 22.4%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 14.9% against a peer median of 23.0% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

ROCE22.4%

ROE14.9%

Peer median ROE23.0%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +19% while net margin moved +136% 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+19%

Margin effect+136%

DalalBaazaar Score

56/ 100

Moderate

Weighted across six categories. Every point is explained below.

• P/E of 36.4x already prices in growth
✗ P/E is 26% above its own historical median of 28.8x — expensive by its own standards
✗ P/B of 5.71x is a steep premium to book

Quality vs. Valuation

Company Quality

61/ 100

Average

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

Valuation

51/ 100

Fair

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

36.4x

3Y Median

28.8x

40 monthly readings · mean 28.0x · range 16.1x–39.3x

Sector Median

45.7x

median of 4 sector peers

⚠️Current valuation is approximately 26% 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 20% below the peer median of 45.7x.

vs. its own history

Expensive

28.8x median over 40 months · +26%

vs. sector peers

Cheap

45.7x median of 4 peers · -20%

vs. generic bands

Expensive

Above 35x

P/E (Trailing)

36.4x

P/B

5.71x

EV/EBITDA

16.5x

PEG

0.89

Dividend Yield

0.59%

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 5.8% to 8.8% over 3 years.
Return on equity is rising
ROE has improved from 7.1% to 14.9%.
Return on capital is rising
ROCE has improved from 16.0% to 22.4%.
High return on capital employed
ROCE of 22.4% 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 Attention2

Valuation above its historical average
At 36.4x the stock trades 26% above its own median of 28.8x.
Short-term liquidity is tight
Current ratio of 0.87 — near-term obligations exceed near-term assets.

Red Flags

1 item require attention · 1 watch

🟡Short-term liquidity is tightFinancial
Current ratio of 0.87 — near-term obligations exceed near-term assets.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 22.4% 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 5.8% to 8.8%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Cheaper than its peers
It trades 20% 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?

The price already assumes success
The stock trades 26% 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.
Growth barely outpaces inflation
Revenue compounding at 5.9% 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.
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.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 7%✓ 8.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Interest cover stays above 3x✗ 2.8x
How much operating profit can fall before interest stops being comfortably covered.
3Revenue growth stays above 4% a year✓ 5.9% CAGR
Latest reported year was 17.8%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
4Free cash flow remains positive✓ ₹201 Cr
Profit that never becomes cash eventually stops being profit.
5Debt / EBITDA stays below 2x✓ 1.7x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.

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

5 good · 5 neutral · 1 weak

Market Cap

₹6,541 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

36.4x

Fair

Fairly valued against the generic band

P/B Ratio

5.71x

Rich

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

EPS (TTM)

₹66.9

Profitable

Profitable on a per-share basis

ROE

14.9%

Moderate

Moderate capital efficiency

ROCE

22.4%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.73x

Moderate

Moderate leverage

Revenue Growth (YoY)

17.8%

Healthy

Healthy top-line growth

Profit Growth (YoY)

28.2%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.59%

Modest

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

Free Cash Flow

₹201 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹2,435

P/E (Forward)

65.3x

Flat

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

Operating Margin

5.3%

Average

Average margins

Net Margin

2.9%

Weak

Very little revenue reaches the bottom line

Current Ratio

0.87

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.45

Defensive

Steadier than the market

52W Range Position

96%

Near high

Near its 52-week high

Technical Snapshot

SMA 20 / SMA 50

2267.6 / 1904.0

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

61.7

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹4,247 Cr	₹4,583 Cr	₹4,404 Cr	₹5,049 Cr	+5.9%
EBITDA	₹246 Cr	₹299 Cr	₹363 Cr	₹443 Cr	+21.7%
EBITDA Margin	5.8%	6.5%	8.3%	8.8%	—
PAT (Net Profit)	₹55 Cr	₹63 Cr	₹111 Cr	₹155 Cr	+41.0%
EPS	₹22.66	₹25.69	₹45.39	₹63.44	+40.9%
ROE	7.1%	7.5%	12.0%	14.9%	—
ROCE	16.0%	16.3%	20.4%	22.4%	—
Total Debt	₹819 Cr	₹778 Cr	₹737 Cr	₹768 Cr	-2.1%
Free Cash Flow	₹215 Cr	₹179 Cr	₹191 Cr	₹201 Cr	-2.3%

🟢 Revenue has grown at 5.9% a year over 3 years.

🟢 EBITDA has grown at 21.7% a year over 3 years.

🟢 EBITDA Margin has risen from 5.8% to 8.8% over 3 years (+3.0 pts).

🟢 PAT (Net Profit) has grown at 41.0% a year over 3 years.

🟢 EPS has grown at 40.9% a year over 3 years.

🟢 ROE has risen from 7.1% to 14.9% over 3 years (+7.8 pts).

🟢 ROCE has risen from 16.0% to 22.4% over 3 years (+6.4 pts).

🟢 Total Debt has shrunk at 2.1% a year over 3 years.

🔴 Free Cash Flow has shrunk at 2.3% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹3,527 Cr

Total Liabilities

₹2,472 Cr

Total Debt

₹768 Cr

Cash & Equivalents

₹4 Cr

Operating Cash Flow

₹477 Cr

Capex

-₹277 Cr

Shareholding (proxy)

Institutional Holding

4.7%

Insider Holding

55.2%

Corporate Actions

Dividend Rate

₹14.44

Ex-Dividend Date

24 Jun 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

1 positive2 mixed3 general

Wheels India Share Price Near 52-Week High | Stock View

Univest, 16 Oct

Wheels India shares jump over 5% on launching QIP; check floor price and other details

Upstox, 25 SeptPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Wheels India Approves Issuing 1,269,391 Equity Shares At ₹1,418 To Raise ₹180 Crores

Sahi, 19 Aug

Is It Smart To Buy Wheels India Limited (NSE:WHEELS) Before It Goes Ex-Dividend?

Simply Wall Street, 20 JunCapital return

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

Wheels India share price hits a 52-week high, jumps over 55% in just 6 sessions- Should you buy?

Livemint, 09 SeptPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Wheels India revises preferential issue price to ₹1,461 per share

scanx.trade, 31 Aug

Watch Items

Trading very close to its 52-week high — momentum-driven entries here carry more mean-reversion risk.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🟡Business QualityAdequate12.4/20

🟡Financial HealthAdequate11.9/20

🟢GrowthStrong13.1/20

🟡ProfitabilityModerate8.5/15

🔴ValuationDemanding4.5/15

🟡RiskModerate5.5/10

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.

This thesis breaks if

✓EBITDA margin holds above 7%8.8%
✗Interest cover stays above 3x2.8x
✓Revenue growth stays above 4% a year5.9% CAGR
✓Free cash flow remains positive₹201 Cr
✓Debt / EBITDA stays below 2x1.7x