At a Glance
Aaron Industries, the first listed elevator parts company on NSE SME, has seen its profits compound at 44% CAGR over the last 5 years. With 21% ROE, expanding margins, and new Unit-3 now operational, the company is vertically integrating itself. But with a PE of 47x, are valuations running ahead of fundamentals?
1. 🎯 Introduction – Why’s Everyone Pressing the Elevator Button?
- Stock up 41% in 1 year, 74% CAGR over 5 years 📈
- EPS has grown from ₹1.9 (FY21) → ₹7.87 (FY25)
- Margins hit all-time high of 19% in FY25
- New Unit-3 in Surat operational as of April 2025
- 73% promoter holding, no pledges
- PE: 47x 🤨
- Book Value: ₹41 → stock trades at 9x P/B
Sounds exciting. But does the elevator go all the way to the top, or is it stopping mid-floor?
2. ⚙️ WTF Do They Even Do?
Aaron is a Bharat-made elevator ecosystem enabler.
- 🛗 Makes elevator cabins, doors, rails, operating panels
- 🧱 Stainless steel polishing and press plate manufacturing
- 🏗 Clients include infra contractors, builders, interior fit-out firms
- 🌐 Distribution via direct B2B and channel partners
- 🏭 Three manufacturing units – all in Gujarat, now with added capacity
Imagine a company that’s like “Anchor + Otis Jr.” for elevators. That’s Aaron.
3. 📊 Financials – Is This Elevator Rising Smoothly?
| Metric | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Revenue (₹ Cr) | 25 | 38 | 56 | 63 | 78 |
| EBITDA (₹ Cr) | 3.5 | 5.9 | 9.5 | 11.1 | 14.8 |
| Net Profit (₹ Cr) | 1.9 | 3.7 | 5.4 | 6.3 | 8.24 |
| EPS (₹) | 1.92 | 3.69 | 5.38 | 6.04 | 7.87 |
| ROE (%) | 17% | 23% | 23% | 21% | 20.9% |
| OPM (%) | 13.9% | 15.5% | 17.1% | 17.6% | 19.0% |
💡 TL;DR: Profits tripled in 4 years, margins consistently improving, and growth funded without large dilution.
4. 📉 Valuation – Is It Cheap, Meh, or Crack?
| Metric | Value |
|---|---|
| Price | ₹374 |
| Market Cap | ₹392 Cr |
| PE (TTM) | 47.6x |
| P/B | 9.1x |
| EV/EBITDA | ~26x |
| Fair Value Range (EduEstimates) | ₹260 – ₹300 |
🚨 This is not cheap for a manufacturing SME.
It’s priced like a premium FMCG brand — while still facing risks of infra cyclicality, steel prices, and capacity utilization.
5. 🧂 What’s Cooking – News, Updates & Buzz
- 🏭 New Unit-3 at Surat completed ahead of schedule in Apr 2025
- 🛠 Bought high-end Salvagnini machinery in Mar 2024 – 3x production boost claimed
- 📜 Got BIS certification for SS press plates in Feb 2024
- 🧾 Bagged ₹2.74 Cr order from Palex Laminate in June 2024
- 📦 Inventory turnover improving post-capacity expansion
- 🪙 Preferential issue of ₹10.34 Cr done at ₹235/share – used for capex
They’re not just assembling parts — they’re assembling scale.
6. 🏦 Balance Sheet – How Much Karz, Kitna Equipment?
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Borrowings (₹ Cr) | 11.4 | 31.6 | 31.9 |
| Reserves (₹ Cr) | 10.4 | 25.4 | 32.6 |
| Fixed Assets + CWIP (₹ Cr) | 19.3 | 51.3 | 57.4 |
| Net Worth (₹ Cr) | 20.5 | 35.9 | 43.0 |
| D/E Ratio | 0.56x | 0.88x | 0.74x |
Debt is up post capex, but still within comfortable range. And no pledges = big ✅
7. 💵 Cash Flow – Sab Number Game Hai
| Year | CFO (₹ Cr) | Capex | FCF |
|---|---|---|---|
| FY24 | ₹5.6 Cr | ₹33 Cr | -₹27.4 Cr |
| FY25 | ₹8.6 Cr | ₹7.9 Cr | +₹0.7 Cr |
They turned cash flow positive post capex, which is excellent. Unit-3 is now monetizing.
8. 🧠 Ratios – Sexy or Stressy?
| Ratio | FY25 |
|---|---|
| ROE | 20.9% |
| ROCE | 18.6% |
| OPM | 19.0% |
| Debt/Equity | 0.74x |
| Inventory Days | 116 |
| Debtor Days | 24 |
| Interest Coverage | ~7x |
| Promoter Holding | 73.06% (no pledges) |
Everything is sexy except the valuation.
9. 💸 P&L Breakdown – Show Me the Money
- Elevator segment contributes ~70% of revenue
- SS press plates: 25–30% of top line
- OPM expanded to 20.9% in latest quarter
- Depreciation up due to Unit-3, but net margins held
- EPS: ₹7.87 for FY25, grew 30% YoY
- Dividend: ~15% payout
10. 🏁 Peer Comparison – Who Else Is Climbing?
| Company | PE | ROE | Sales (Cr) | OPM |
|---|---|---|---|---|
| Aaron | 47.6x | 20.9% | ₹78 Cr | 19.0% |
| Crizac | 28.1x | 36.2% | ₹849 Cr | 25.0% |
| Altius Infra | 53.5x | 5.9% | ₹5,971 Cr | 40.7% |
| Indus Infra Trust | 10.9x | 9.4% | ₹744 Cr | 70% |
Aaron looks like the best small-cap elevator play, but valuation premium is already baked in.
11. 🧾 Miscellaneous – Promoters, Float, Expansion
- 👨👩👧👦 Promoters: 73.06% holding
- 👥 Public: 11,473 shareholders
- 📈 No institutional holding except 0.52% DII
- 🧱 Unit-3 in Surat = production of SS panels + elevator rails + cabins
- 🎯 No ESOPs, no pledges, no convertible debentures = clean cap table
12. 🧑⚖️ EduInvesting Verdict™
“This stock took the elevator instead of the stairs. And now it’s pressing the penthouse button… with a PE of 47.”
✅ Strong margins
✅ 30%+ EPS growth
✅ New capacity ramped up
❌ High PE for an SME
❌ SME platform = lower liquidity
⚠️ Needs to double sales in next 2 years to justify current valuation
Fair Value Range: ₹260 – ₹300
If EPS crosses ₹10+ in FY26, market might rerate it further. Until then, every dip feels like a ‘floor correction’.
✍️ Written by Prashant | 📅 July 8, 2025
Tags: Aaron Industries, Elevator Stocks, SME Stocks, Gujarat Manufacturing, Stainless Steel India, EduInvesting, Capex Story, Microcap Momentum, PE 47 Stocks, NSE SME
