At a Glance
Hira Automobiles is an authorized dealer of Maruti Suzuki with 12 showrooms and 11 workshops spread across Punjab. While the business sounds simple and steady, the stock is up 321% in the past year despite a 5-year revenue decline of -7%. ROE is ~5%, P/E is 95x, and sales have dropped YoY. So… who’s driving this rally?
1. 🪪 WTF Do They Even Do?
Welcome to Maruti ki Dukaan, Punjab edition.
Hira Automobiles Ltd is not a car manufacturer. It’s just a dealer—but a big one. It:
- Sells new Maruti Suzuki cars across its 12 showrooms
- Runs 11 workshops for service, spares, and insurance
- Also operates a Maruti Driving School (yes, they’ll teach you how to scratch your Alto before you even get it)
- Offers insurance and accessory sales (read: floormats + overpriced perfume)
- Trades in used cars too
But it’s not a franchise. It’s an official Maruti partner. Think of it as your neighbourhood Maruti showroom… but listed.
2. 📊 Financials: Revenue Down, Stock Price Up?
Revenue & Profit Trends (in ₹ Cr)
| Year | Revenue | Net Profit | OPM | ROE |
|---|---|---|---|---|
| FY22 | ₹224 Cr | ₹1.05 Cr | 4% | 5% |
| FY23 | ₹249 Cr | ₹1.23 Cr | 4% | 5.1% |
| FY24 | ₹262 Cr | ₹1.11 Cr | 4% | 5.1% |
| FY25 | ₹211 Cr | ₹0.97 Cr | 5% | ~5% |
Yes. FY25 revenue is down by ₹51 Cr. But the stock is up 321% in the past year.
Margins are razor thin (4–5%) because… well, welcome to the world of auto dealership. You sell 10 cars to make what Maruti earns from a single Swift variant update.
3. 📦 Valuation – Is It Cheap, Meh, or Crack?
- P/E: 95.9x (😵💫)
- Market Cap: ₹75 Cr
- Book Value: ₹52.5
- P/B: 5.18x (Very expensive for a low-growth dealership)
This is a ₹1 Cr PAT business valued at ₹75 Cr.
Let’s do a sanity check.
🔢 Fair Value Range Calculation (Conservative)
- EPS TTM = ₹2.82
- Assuming 15x–25x P/E (dealership avg)
- 🧮 FV = ₹42 to ₹70
So at ₹272, you’re paying for a fantasy Maruti EV dealership expansion + AI-enabled oil change business model that doesn’t exist (yet).
4. 🔍 What’s Cooking – Any Drama or Triggers?
- FY25 Profit Down: Net profit of ₹0.97 Cr vs ₹1.1 Cr last year
- Revenue Down 19% YoY – despite new launches like Fronx and Jimny from Maruti
- No dividends ever (because profits are tiny)
- No expansion announcements from the company
Basically, nothing’s cooking. The only sizzle is in the stock chart.
5. 🧾 Balance Sheet – How Much Debt, How Many Dreams?
- Total Borrowings: ₹77 Cr
- Equity Capital: ₹3 Cr
- Reserves: ₹11 Cr
That’s ~7x debt to net worth.
But the business needs it—inventory for 12 showrooms, credit cycles, etc. Still, interest eats up 80–90% of PBT. Low-interest cover is a red flag.
6. 💸 Cash Flow – Sab Number Game Hai
| Year | CFO (₹ Cr) |
|---|---|
| FY23 | ₹11 Cr |
| FY24 | ₹5 Cr |
Cash flows have remained positive, mostly due to tight working capital. But margins are so thin, one bad inventory cycle could choke this engine.
7. 📉 Ratios – Sexy or Stressy?
| Metric | Value |
|---|---|
| ROE | ~5.1% |
| ROCE | 9.65% |
| OPM | ~4–5% |
| D/E | ~6.5x |
| P/E | 95.9x |
Verdict: Stressy with a side of speculative.
8. 🧾 P&L Breakdown – Show Me the Money
- Sales: ₹211 Cr (FY25)
- OPM: 5% (Best ever for the co)
- Interest: ₹8 Cr
- Profit Before Tax: ₹1.1 Cr
- Net Profit: ₹0.97 Cr
The biggest expense? Interest.
The second biggest? Probably free chai and balloons for test drive customers.
9. 🤼 Peer Comparison – Who Else in the Game?
| Company | P/E | ROE | OPM | Sales (₹ Cr) | MCap (₹ Cr) |
|---|---|---|---|---|---|
| Redington | 20.7x | 14.5% | 2% | 99,334 | 24,399 |
| MSTC | 19.2x | 24.2% | 57% | 311 | 3,779 |
| MMTC | 108x | 5.8% | – | 2.7 | 10,553 |
| Hira Auto | 95.9x | 5.1% | 4–5% | 211 | 75 |
Basically, all other peers either:
- Have huge volumes (Redington)
- Are PSUs with asset sales (MMTC)
- Have monopoly businesses (MSTC)
Hira? Just your local showroom with a dream.
10. 🧠 Miscellaneous
- Promoter Holding: 95.73% 😳
This is barely a public company—just 4.27% float! - No major FII/DII presence
- Only 211 shareholders
This is basically a family-run business with a price chart on BSE
🧠 EduInvesting Verdict™
“Hira Automobiles is like that Swift Dzire guy at a wedding – confident, overvalued, but you know he borrowed the car.”
It’s a classic small-cap speculative stock.
The business is real, but tiny.
The valuation is crazy.
The growth is missing.
The float is illiquid.
And yet… it’s up 321% in a year. Why? Probably because someone with 1% float moved the stock 3x.
🎯 Fair Value Range: ₹42–₹70
At ₹272?
You’re not investing.
You’re entering a Maruti showroom and saying, “Bhaiya, mujhe Swift nahi… company khareedni hai.”
Tags: Hira Automobiles, Maruti Dealer, Auto Sector, Punjab Stocks, Small Cap, BSE Stocks, Overvalued Stocks, Auto Dealership Stocks
✍️ Written by Prashant | 📅 July 3, 2025
