Hi-Tech Gears Ltd is an auto components manufacturer primarily engaged in the business of manufacturing gears and transmission components. The company operates as a key player in the global automotive components industry, serving diverse sectors including two-wheelers, passenger vehicles, commercial vehicles, and agricultural and off-road vehicles.
The product portfolio of the company comprises precision gears, shafts, transmission components, and engine components catering to two-wheelers (26%), Passenger Vehicles (43%), Commercial Vehicles, and Agri and Off-Road vehicles (31%). This diversified product range positions the company strategically across multiple automotive segments, reducing dependency on any single market vertical.
Hi-Tech Gears posted a ₹404 Mn profit in FY25, down 64.7% Year-over-Year. The company faced challenges in FY25 due to market softness, particularly in international operations. However, despite the revenue drop, EBITDA margin improved to 15.40% from 14.24% YoY, supported by lower finance costs and improved cost controls.
Net debt-to-equity improved significantly from 0.30 in FY24 to 0.09 in FY25, reflecting strong deleveraging. This improvement in financial leverage demonstrates the company's focus on debt reduction and balance sheet optimization. The cash conversion cycle reduced to 70 days from 95 YoY, signaling improved working capital efficiency.
• Profit (FY25): ₹404 Mn (down 64.7% YoY)
• Revenue (FY25): ₹927 Cr
• Market Cap: ₹1,341 Cr (down 25.8% in 1 year)
• EBITDA Margin: 15.40% (improved YoY)
• Net Debt-to-Equity: 0.09 (improved from 0.30 in FY24)
• Cash Conversion Cycle: 70 days (reduced from 95 YoY)
• Return on Equity (ROE): 8.50%
• Return on Capital Employed (ROCE): 11.6%
As of March 31, 2025, the market capitalization stood at ₹11,369.90 Mn (₹1,136.99 Cr). The stock price was ₹695.00, with a 52-week range of ₹515.00 (Low) to ₹1,065.00 (High).
Key valuation metrics include:
• P/E Ratio: 32.4
• P/B Ratio: 2.77
• Book Value: ₹257.00
• Dividend Yield: 0.70%
• Promoter Holding: 56.2% indicates strong promoter confidence in the business. As of the last reported quarter, promoters held 56.2%, and the public held 43.8% of the total shares.
The company has demonstrated resilience in operational performance despite market challenges. It has delivered good profit growth of 37.3% CAGR over the last 5 years, showcasing its ability to generate sustainable profitability over the long term.
However, the company has delivered a poor sales growth of 5.12% over the past five years. This indicates challenges in revenue expansion, though the company has maintained profitability through operational efficiency improvements.
The company has reduced debt, reflecting disciplined financial management and a focus on balance sheet strength. Margins improved sequentially due to better productivity and cost controls.
With rising momentum in EV adoption and increasing contribution from exports (52% of FY25 revenue), Hi-Tech Gears is aiming for a return to growth in FY26. The company's strategic focus on electric vehicles and export markets positions it well for future growth opportunities.
EBITDA margins have improved, and strategic expansion into EVs and exports drives future growth. The company is actively diversifying into emerging segments like electric vehicles while strengthening its export capabilities.
The company stated: "We are focusing on profitable and sustainable growth through operational excellence, product innovation, and market diversification. Despite a tough macro environment, our margins held firm, and we are well-positioned to tap into emerging demand in EV and export segments."
The company remains committed to lean manufacturing, cash flow efficiency, and new business development to fuel its next phase of expansion. This strategic approach emphasizes operational excellence and capital efficiency as key drivers of future performance. The company's focus on operational consolidation with refurbishment of machinery demonstrates its commitment to maintaining competitive manufacturing capabilities while optimizing costs.
