Zuari Industries Limited

Industrials — Conglomerates · NSE

₹264.70−₹2.85 (−1.07%)

DalalBaazaar Score

46 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Moderate

Driven by short-term liabilities exceed short-term assets, micro-cap size, which brings thin liquidity.

In simple words: The business is earning a fairly low return on the money invested in it, 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, 7:03 pm

Understanding the Business

Company site ↗

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

What does this company do?

Zuari Industries Limited engages in agriculture, heavy engineering, infrastructure, lifestyle, and services businesses in India and internationally.

IndustryConglomerates

SectorIndustrials

Employees376

Annual revenue₹1,043 Cr

How does it make money?

Turns over ₹1,043 Cr a year. Of every ₹100 of sales, about ₹10 reaches shareholders as profit, with ₹39 left at the operating level before interest, tax and depreciation. Each of its 376 employees supports ₹2.77 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹2.77 Cr

Who are its competitors?

The closest listed comparisons in its industry are LARSEN & TOUBRO LTD., SIEMENS LTD, ABB 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 7.3% 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 ROE15.2%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +9% while net margin moved -68% 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+9%

Margin effect-68%

DalalBaazaar Score

46/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue CAGR of only 3.0% — barely ahead of inflation
✗ Profit has declined at 29.7% a year
✗ Profit is compounding slower than revenue — margins are being squeezed as the business grows

Quality vs. Valuation

Company Quality

42/ 100

Weak

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

Valuation

64/ 100

Fair

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

Weak on business quality and not cheap enough to compensate.

Historical Valuation

Current P/E

7.3x

3Y Median

1.4x

40 monthly readings · mean 2.2x · range 0.9x–7.8x

Sector Median

88.8x

median of 3 sector peers

⚠️Current valuation is approximately 428% above its 3y median of 1.4x. 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 92% below the peer median of 88.8x.

vs. its own history

Expensive

1.4x median over 40 months · +428%

vs. sector peers

Cheap

88.8x median of 3 peers · -92%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

8.1x

PEG

—

What's Good / What's Bad

🟢 What's Going Well0

Nothing stands out as clearly improving on the years of data available.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 12.9% to 3.0% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 14.3% to 7.3% — often a sign of competition or overexpansion.

Red Flags

4 items require attention · 2 high · 2 watch

🔴Thin interest coverageFinancial
Operating profit covers interest only 1.5x — little room if earnings dip.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 25.8 points, from 65.1% to 39.3%.
🟡Profit is decliningFinancial
Net profit is down 65% over 3 years.
🟡Short-term liquidity is tightFinancial
Current ratio of 0.66 — near-term obligations exceed near-term assets.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Cheaper than its peers
It trades 92% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 65.1% to 39.3%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The debt load needs earnings to hold up
Debt is 6.3x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
The price already assumes success
The stock trades 428% 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 3.0% 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 12.9% to 3.0%. 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.

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

1EBITDA margin holds above 37%✓ 39.3%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 6.3x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Interest cover stays above 3x✗ 1.5x
How much operating profit can fall before interest stops being comfortably covered.
4Revenue growth stays above 4% a year✗ 3.0% CAGR
Latest reported year was 21.2%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
5Free cash flow remains positive✓ ₹118 Cr
Profit that never becomes cash eventually stops being profit.

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 · 3 neutral · 2 weak

Market Cap

₹788 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

7.3x

Cheap

Cheap against the generic band

P/B Ratio

0.22x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹36.44

Profitable

Profitable on a per-share basis

ROE

3.0%

Weak

Weak capital efficiency

ROCE

7.3%

Weak

Low return on total capital employed

Debt/Equity

0.72x

Moderate

Moderate leverage

Revenue Growth (YoY)

21.2%

Healthy

Healthy top-line growth

Profit Growth (YoY)

900.0%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.38%

Modest

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

Free Cash Flow

₹118 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

2.0%

Weak

Thin margins leave little room for error

Net Margin

9.9%

Average

Average bottom-line conversion

Current Ratio

0.66

Tight

Tight short-term liquidity

Beta (vs Nifty)

0.33

Defensive

Steadier than the market

52W Range Position

35%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

276.4 / 272.0

Bullish alignment (short > long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

30.9

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹954 Cr	₹837 Cr	₹969 Cr	₹1,043 Cr	+3.0%
EBITDA	₹621 Cr	₹268 Cr	₹240 Cr	₹410 Cr	-12.9%
EBITDA Margin	65.1%	32.1%	24.8%	39.3%	—
PAT (Net Profit)	₹311 Cr	₹714 Cr	-₹93 Cr	₹108 Cr	-29.7%
EPS	₹104.3	₹239.72	₹-31.3	₹36.25	-29.7%
ROE	12.9%	18.2%	-1.8%	3.0%	—
ROCE	14.3%	20.0%	2.7%	7.3%	—
Total Debt	₹2,632 Cr	₹2,377 Cr	₹2,509 Cr	₹2,598 Cr	-0.4%
Free Cash Flow	₹252 Cr	₹58 Cr	-₹16 Cr	₹118 Cr	-22.3%

🟢 Revenue has grown at 3.0% a year over 3 years.

🔴 EBITDA has shrunk at 12.9% a year over 3 years.

🔴 EBITDA Margin has fallen from 65.1% to 39.3% over 3 years (-25.8 pts).

🔴 PAT (Net Profit) has shrunk at 29.7% a year over 3 years.

🔴 EPS has shrunk at 29.7% a year over 3 years.

🔴 ROE has fallen from 12.9% to 3.0% over 3 years (-10.0 pts).

🔴 ROCE has fallen from 14.3% to 7.3% over 3 years (-7.0 pts).

🟡 Total Debt has been broadly flat over 3 years (-0.4% a year).

🔴 Free Cash Flow has shrunk at 22.3% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹7,164 Cr

Total Liabilities

₹3,560 Cr

Cash & Equivalents

₹62 Cr

Operating Cash Flow

₹144 Cr

Capex

-₹26 Cr

Shareholding (proxy)

Institutional Holding

1.2%

Insider Holding

59.8%

Corporate Actions

Dividend Rate

₹1

Ex-Dividend Date

11 Sept 2026

Peer Comparison

Company	P/E	ROE
LARSEN & TOUBRO LTD.	30.1x	15.2%
SIEMENS LTD	88.8x	10.5%
ABB INDIA LIMITED	92.6x	19.1%

Recent News

1 positive2 mixed3 general

Zuari Industries vs Nifty 50: 1Y Return -21.05% vs -11.35%

Univest, 13 Oct

Zuari Industries Ltd. Key Financial Ratios – Valuation, Profitability & More

Value Research, 29 Aug

Zuari Industries Q4 Net Loss Surges 52% to ₹31.6 Crore on Higher Operational Costs

Sahi, 25 MayResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Zuari Industries returns to profit in FY26, declares dividend

scanx.trade, 15 MayCapital return

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

Zuari Industries - MFs pull back: Stakes cut in 12 smallcap stocks after two quarters of buying; stocks fall up to 40%

The Economic Times, 11 Aug

Zuari Industries Ltd. Share Price Rise: Key Stock Analysis

Univest, 20 AugPrice 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.

Watch Items

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

DalalBaazaar Thesis

StrongValuation

MiddlingBusiness Quality · Financial Health

WeakGrowth · Profitability · Risk

Points for each in the Score ↑

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation. 2 high-severity red flags sit above this conclusion and should be read first.

3 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Interest cover stays above 3x; Revenue growth stays above 4% a year · see Key things to watch ↑