1. 📌 At a Glance
Honeywell Automation India Ltd (HONAUT) is the desi tech arm of global giant Honeywell Inc. It’s the automation wizard for everything from airports to power plants. But while the buzzwords are spicy (AI, IoT, industrial automation), the sales CAGR is thanda — just ~5% in 5 years. Stock’s down ~29% in a year, trading at 69x PE. Valuation? Premium. Growth? Delayed train. Still, no debt, elite clientele, and ₹500+ EPS ka swag.
2. 🎣 Hook: “Tech Company Without Tech Valuation — Or Growth”
In a world where even chaiwalas are adding “AI-enabled QR” to their stall, Honeywell is actually automating oil rigs, airports, smart buildings, and defence sites.
But here’s the plot twist: Despite all the jazzy tech, this ₹36,000 Cr company has grown revenues by just 4.95% CAGR over 5 years. Bro, even Indian inflation grows faster than that.
So, the question is — is Honeywell Automation a sleeping giant or just an overpriced legacy tech supplier?
3. 🏗️ WTF Do They Even Do? (Business Model)
Honeywell Automation = Industrial Tech + Boring B2B + Some Sexy Contracts
Here’s the breakup:
- Process Solutions (~50%): Software & hardware for oil & gas, chemicals, pharma, power plants, etc.
- Building Solutions (~35%): Fire alarms, security, HVAC, smart buildings, data centers.
- Advanced Engineering / Others (~15%): Robotics, BMS (building mgmt), analytics, AI-ML-based solutions.
📍 All under the global Honeywell parent brand, with zero product overlap but full brand leverage.
🧠 TL;DR: They’re the guys making India’s biggest buildings and plants run on autopilot. Think Sasta Tesla meets industrial Bharat.
4. 📊 Financials: Profit, Margins, ROE, Growth
| Metric | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Revenue (₹ Cr) | 3,043 | 2,948 | 3,448 | 4,058 | 4,190 |
| EBITDA (₹ Cr) | 592 | 436 | 521 | 595 | 590 |
| Net Profit (₹ Cr) | 460 | 339 | 438 | 501 | 524 |
| EPS (₹) | 520 | 383 | 495 | 567 | 592 |
| OPM (%) | 19% | 15% | 15% | 15% | 14% |
| ROE (%) | 17% | 14% | 14% | 14% | 14% |
🧠 Key takeaways:
- Flat revenue growth = 🚫 SaaS-level excitement
- Margins stable-ish (14–15%)
- ROE decent but not heroic
- EPS rising, but slowly
5. 💸 Valuation – Is It Cheap, Meh, or Crack?
- P/E: 69x 😳
- P/B: 9x 💀
- EV/EBITDA: ~54x (est.)
📉 Is this a SaaS stock in disguise or a legacy play in denial?
🧠 Fair Value Range (EduCalc™)
Let’s assume a more realistic 35x forward PE on FY26E EPS of ₹640:
- FV Range = ₹22,400 to ₹24,000
- CMP = ₹40,980
➡️ Overvalued by 70–80% from conservative base
But again, if India goes full Smart Nation mode — this thing could justify a 60x PE. Could. Not would.
6. 🔥 What’s Cooking – News, Triggers, Drama
- 🛫 Big Win at Noida Airport – Airfield Ground Lighting automation order in FY25
- 🔋 Battery Storage Project in Lakshadweep – First-of-its-kind energy storage contract executed
- 💼 MD Resignation (May 2024) – Ashish Gaikwad out, Atul Pai in
- 🇮🇳 Make in India tailwinds – But Honeywell still imports a lot of tech/IP
➡️ Net-Net: News is spicy. Financial impact? Meh.
7. 💣 Balance Sheet – How Much Debt, How Many Dreams?
| Metric | FY25 |
|---|---|
| Equity Capital | ₹9 Cr |
| Reserves | ₹4,029 Cr |
| Borrowings | ₹101 Cr (negligible) |
| Cash & Equivalents | ~₹3,400 Cr |
| Fixed Assets | ₹202 Cr |
🧠 Takeaway: Company has more cash than its competitors have revenue.
No dilution. No debt stress. Just dry powder and patience.
8. 💵 Cash Flow – Sab Number Game Hai
| Year | CFO (₹ Cr) | FCF (₹ Cr est.) | CFI | CFF |
|---|---|---|---|---|
| FY23 | ₹410 | ₹370 | ₹-118 | ₹-102 |
| FY24 | ₹439 | ₹395 | ₹2,008 (divestment?) | ₹-106 |
| FY25 | ₹426 | ₹390 | ₹-8 | ₹-110 |
- Consistently positive free cash flow
- Capital-light model = high ROCE
- No financial engineering, no accounting circus
9. 📈 Ratios – Sexy or Stressy?
| Metric | Value |
|---|---|
| ROCE | 18% |
| ROE | 14% |
| Debtor Days | 93 |
| Cash Conversion | 5 days 😍 |
| Dividend Yield | 0.26% |
| Dividend Payout | 18% |
| Inventory Days | 34 |
🧠 Cash is King. And Honeywell’s empire is built on float, not flame.
10. 📃 P&L Breakdown – Show Me the Money
- ₹4,190 Cr revenue in FY25
- ₹590 Cr EBITDA (~14% OPM)
- ₹524 Cr PAT
- ₹592 EPS
📍 Slow but sturdy. No wild profit jumps. No boom-bust. Just software-grade annuity + project-based swings.
11. 🧢 Peer Comparison – Who Else Is in the Game?
| Company | P/E | ROCE | Revenue (Cr) | OPM | Remarks |
|---|---|---|---|---|---|
| Honeywell Auto | 69x | 18% | 4,190 | 14% | Premium brand, low growth |
| Kaynes Tech | 140x | 14% | 2,722 | 15% | Electronics, fast growing |
| Jyoti CNC | 73x | 24% | 1,818 | 27% | Momentum play, risky |
| Tega Industries | 56x | 18% | 1,638 | 21% | Consumables, mining exposure |
| LMW | 214x | 4.5% | 3,012 | 4.7% | Niche, overvalued |
🧠 Honeywell isn’t the most exciting — but probably the most stable.
12. 🧬 Misc – Shareholding, Promoters, Governance
- Promoter: Honeywell Asia Pacific Inc (75%)
- FIIs: 2.6%
- DIIs: 12.35%
- Public: ~10%
- Auditors: Changed in Feb 2025 – fresh set of eyes
- No pledging, no shady related party stuff.
➡️ Ultra-clean governance — the Tata DNA still lives on.
13. ⚖️ EduInvesting Verdict™
🔮 “Premium stock at a premium price with premium sleep quality.”
✅ Pros:
- Cash-rich, debt-free, global tech parent
- India infrastructure and smart automation play
- Rock-solid clients: Airports, Govt, Oil & Gas
🚫 Cons:
- Overvalued AF (~69x PE!)
- Revenue growth is sleepwalking (~5% CAGR)
- Low retail participation, liquidity
📊 FV Range: ₹22,400 – ₹24,000 (Based on 35–38x FY26E EPS)
🧠 Unless India wakes up tomorrow and decides to automate every railway toilet with Honeywell tech, this stock’s rally might remain a slow walk.
✍️ Written by Prashant | 📅 7 July 2025
Tags: Honeywell Automation, HONAUT, Smart Infrastructure Stocks, Capital Goods, Automation India, Infra Tech, PSU Projects, Industrial AI
