1. 📌 At a Glance
Disa India Ltd makes the machines that make the machines. With a ~30% ROCE, zero debt, and growing profits, it’s the silent achiever of industrial India. Its ₹2,000 Cr market cap may not scream unicorn, but the fundamentals whisper multibagger. Still, trading at a hefty 37x PE — is it pricing in too much “precision”?
2. 🎣 Hook: “Boring Business, Blazing Profits”
Disa India doesn’t do AI. It doesn’t do D2C. It doesn’t even do buzzwords.
Instead, it builds:
- Moulding machines 🛠️
- Foundry systems 🔥
- Shot blasting & surface prep tech 💣
- Dust filters for factories 🌫️
Not sexy. But damn, this foundry enabler throws 29% ROCE and consistent double-digit growth. It’s basically Ashneer Grover with a welding torch.
3. 🏗️ WTF Do They Even Do? (Business Model)
Disa India is your behind-the-scenes industrial muscle. Here’s how they make money:
🟠 Core Segments:
- Foundry Equipment: Supplies to auto, iron casting, and machinery manufacturers
- Shot Blast Machines: For surface prep (pre-paint, polish, stress relief)
- Dust Control & Filters: Compliance-friendly industrial air systems
🟡 Industries Served:
- Auto Ancillaries
- Infrastructure Casting
- Steel, Foundry, Railways
📍 Clients: L&T, Mahindra CIE, BEML, plus 100s of Tier-2 suppliers
🔧 Order Book visibility is 2–3 quarters. Business is B2B with capex-linked demand.
4. 📊 Financials: Profit, Margins, ROE, Growth
| Metric | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Revenue (₹ Cr) | 185 | 256 | 262 | 329 | 390 |
| EBITDA (₹ Cr) | 27 | 46 | 35 | 50 | 60 |
| Net Profit (₹ Cr) | 24 | 39 | 30 | 43 | 50 |
| OPM (%) | 15% | 18% | 13% | 15% | 15% |
| EPS (₹) | 166 | 265 | 204 | 295 | 347 |
| ROE (%) | 18% | 18% | 18% | 21% | 21% |
🧠 Takeaway:
- 📈 Revenue CAGR (5Y): 11%
- 🧾 PAT CAGR (5Y): 13%
- 🔥 ROE rising = Good management or pricing power kicking in
5. 💸 Valuation – Is It Cheap, Meh, or Crack?
- CMP: ₹13,972
- P/E: 37x
- P/B: 7.6x
- EV/EBITDA: ~32x (est.)
- Market Cap: ₹2,032 Cr
🧠 EduVal™ Fair Value
Let’s say FY26E EPS hits ₹390. Assigning a reasonable 25x PE:
➡️ FV Range = ₹9,500 – ₹10,500
So… it’s overvalued by 30–40% unless it surprises with 20%+ growth in FY26.
6. 🔥 What’s Cooking – News, Triggers, Drama
- 🏭 New Land Acquired (Mar 2025) – Future expansion = growth runway
- 💀 Bhadra Castalloy Subsidiary Shut Down – Cleanup move to focus on core
- ⚖️ Litigations Resolved – Arbitration appeals dismissed = no overhang
- 👨💼 CFO Retired (Apr 2024) – Smooth management transition
- 🚧 Capex Cycle Upturn – Infra, railways, auto ancillaries are ordering again
Net-Net: Tailwinds incoming. No major drama. No flashy pump-and-dump.
7. 💣 Balance Sheet – How Much Debt, How Many Dreams?
| Metric | FY25 |
|---|---|
| Equity Capital | ₹1 Cr |
| Reserves | ₹265 Cr |
| Borrowings | ₹1 Cr (negligible) |
| Other Liabilities | ₹169 Cr |
| Total Assets | ₹437 Cr |
| Fixed Assets | ₹61 Cr |
| Net Cash | ₹150+ Cr (est.) |
🧠 Ultra-clean. Zero leverage. Net cash positive. Book value = ₹1,834.
➡️ Stock trades at 7.6x BV — high, but so is quality.
8. 💵 Cash Flow – Sab Number Game Hai
| Year | CFO (₹ Cr) | Capex | FCF (Est.) | Net Cash Flow |
|---|---|---|---|---|
| FY23 | ₹39 | ₹9 | ₹30 | ₹4 |
| FY24 | ₹56 | ₹10 | ₹46 | ₹0 |
| FY25 | ₹33 | ₹15 | ₹18 | ₹16 |
Steady cash generation, minor reinvestment, positive FCF. Exactly what a smallcap cash cow looks like.
9. 📈 Ratios – Sexy or Stressy?
| Metric | Value |
|---|---|
| ROCE | 29% 🔥 |
| ROE | 21% 👌 |
| Dividend Payout | 29% |
| Dividend Yield | 1.43% |
| Debtor Days | 40 |
| Inventory Days | 122 |
| Cash Conversion Cycle | 73 days |
| Interest Coverage | Infinite (no debt) |
🧠 Verdict: Efficient operations, good returns, clean books. Only the PE ratio is scary.
10. 📃 P&L Breakdown – Show Me the Money
- FY25 Revenue: ₹390 Cr
- EBITDA: ₹60 Cr (15% margin)
- PAT: ₹50 Cr
- EPS: ₹346.72
Disa runs a tight ship. No margin shocks. No one-offs. Just slow, machine-grade growth.
11. 🧢 Peer Comparison – Who Else Is in the Game?
| Company | ROCE | P/E | OPM | Remarks |
|---|---|---|---|---|
| Disa India | 29% | 37x | 15% | Niche foundry king |
| Kaynes Tech | 14% | 140x | 15% | Electronics; rich valuation |
| Honeywell Auto | 18% | 69x | 14% | Larger but slower |
| Jyoti CNC | 24% | 73x | 27% | New-age metalwork |
| Tega Inds | 18% | 56x | 20% | Mining exposure |
🧠 Insight: Disa is underrated on efficiency, but overrated on PE. You’re paying up for quality, not story.
12. 🧬 Misc – Shareholding, Promoters, Governance
- Promoters: 74.82% (WHEELABRATOR GROUP, global industrial giant)
- FIIs: LOL – 0.02%
- DIIs: 8.23%
- Public: 16.94%
- No pledging, no dilution, no drama.
Small float = illiquidity premium. Big swings on low volume.
13. ⚖️ EduInvesting Verdict™
🧠 “If you like machines that mint money and hate market drama — Disa might be your bae.”
✅ Pros:
- Niche foundry player
- ROCE/ROE both > 20%
- Strong balance sheet
- Capex cycle upturn trigger
🚫 Cons:
- Expensive at 37x PE
- Illiquid; operator playground risk
- Growth visibility limited to India
📊 FV Range: ₹9,500 – ₹10,500 (Based on 25–27x FY26E EPS)
✍️ Written by Prashant | 📅 7 July 2025
Tags: Disa India, Foundry Equipment Stocks, Capital Goods, High ROE Smallcaps, Manufacturing India, Metal Industry Automation, Wheelabrator Group
