Duncan Engineering Ltd Q1 FY26: “Pneumatics, Profit and the Pursuit of Not Being Ignored”

Duncan Engineering Ltd Q1 FY26: “Pneumatics, Profit and the Pursuit of Not Being Ignored”

1. At a Glance

Tiny cap. Big dreams. Duncan Engineering just reported ₹1.24 Cr net profit in Q1 FY26 — a figure so modest it could be mistaken for your CA’s yearly bill. But hey, when you’ve risen from industrial obscurity and zero ROCE to 13% returns, someone’s clearly oiling the valves right.


2. Introduction with Hook

Imagine if a 1960s typewriter got into industrial manufacturing and started selling compressed air for a living. That’s Duncan. Founded in 1962, this company went from being the background noise of the auto-component sector to almost making some real noise.

It now makes pneumatic cylinders, rotary actuators, tyre valves — basically, the kind of stuff your dad would get excited about at an engineering expo.

Two Stats to Sound Smart at Parties:

  • ROCE: 13.2% (not bad, not Bosch)
  • OPM: 9.1% (up from “is this even a margin?” levels)

3. Business Model – WTF Do They Even Do?

Okay, here goes:
Duncan Engineering is in the business of industrial pneumatics and automation, which is a fancy way of saying: “We sell air. Compressed. In expensive cylinders.”
And no, they’re not trying to be Apple. Their products include:

  • Pneumatic cylinders
  • Tyre valves
  • Solenoid valves
  • Rotary actuators with torque up to 4000Nm (enough to turn your optimism into profit)

Their factory’s in Ranjangaon, Pune — because of course, it is.

Basically, they do the boring but essential backend engineering stuff that keeps plants humming and machines doing their thing. Think of them as the backstage crew of the auto-component circus.


4. Financials Overview – The Numbers They Let Us See

MetricQ1 FY26YoY Growth
Revenue₹18.01 Cr-1%
Operating Profit₹1.62 Cr+68%
Net Profit₹1.24 Cr+57%
OPM9.0%vs 5.7% last year
EPS₹3.36up from ₹2.14

Margins are still tighter than Mumbai parking, but at least the profits are no longer theoretical. The company’s quarterly profits are behaving less like weather patterns and more like a trend.


5. Valuation – Is This a ₹543 Joke or a Hidden Gem?

Let’s play “Guess That Multiple.”

  • P/E: 35.5x (Because small-caps love overpromising)
  • Book Value: ₹154 → CMP is 3.5x BV

Fair Value Range:

  • Method 1 – P/E 25x on FY25 PAT of ₹5.2 Cr = ₹350
  • Method 2 – EV/EBITDA 15x on ₹7.9 Cr = ~₹400

So… Fair Value Range = ₹350–₹400
(If you’re buying at ₹543, please also buy Maggi at the airport.)


6. What’s Cooking – News, Triggers, Drama

  • Q1 FY26 results show consistent profit for the 6th straight quarter.
  • Dividend declared: ₹3/share — hello, credibility!
  • Debtor days dropped from 32.9 to 24.3 — someone found the collections team.
  • Operating margins gradually recovering, though still allergic to double digits.

Nothing dramatic, no SEBI inquiries, no mergers — just slow and boring improvement. Which, in penny stock world, is plot-twist enough.


7. Balance Sheet – Assets, Liabilities, and Some Hope

ItemFY25
Equity Capital₹3.7 Cr
Reserves₹53.15 Cr
Borrowings₹3.05 Cr
Net Worth₹56.85 Cr
Total Liabilities₹75.54 Cr
  • “Almost debt free” is the new sexy.
  • Fixed Assets: ₹18.73 Cr
  • Investments: ₹26.9 Cr (Looks like someone went shopping.)

The ship isn’t sinking. It’s just… coasting.


8. Cash Flow – Sab Number Game Hai

YearCFOCFICFFNet
FY23₹13.79 Cr₹-15.13 Cr₹0.13 Cr₹-1.21 Cr
FY24₹2.77 Cr₹-0.73 Cr₹-1.08 Cr₹0.95 Cr
FY25₹6.62 Cr₹-4.29 Cr₹-1.99 Cr₹0.33 Cr
  • Positive operating cash flows, but investing like it’s Diwali.
  • Free cash flow is positive but not growing legs yet.
  • Cash flow looks like your freelancer friend — working constantly, but savings = 0.

9. Ratios – Sexy or Stressy?

MetricFY25
ROE9.53%
ROCE13.18%
P/E35.5x
D/E0.05
PAT Margin6.5%

Verdict: Not a runway model, but not in ICU either. ROCE is improving. D/E is a dream. But that P/E… oof.


10. P&L Breakdown – Show Me the Money

YearRevenueEBITDAPAT
FY23₹70.1 Cr₹13.1 Cr₹9.9 Cr
FY24₹65.1 Cr₹8.88 Cr₹6.87 Cr
FY25₹84.7 Cr₹7.29 Cr₹5.21 Cr
  • FY25 revenue is up, but EBITDA has shrunk faster than your New Year resolutions.
  • PAT grew 10%, but only if you squint really hard.
  • Not flashy, but at least it’s consistent now.

11. Peer Comparison – Who’s the Boss?

CompanyRev (Cr)PAT (Cr)P/EROCE
Bosch₹18,087₹2,01255.5x21.1%
Schaeffler₹8,547₹1,05859.7x25.7%
Uno Minda₹16,775₹93466.7x18.8%
Duncan₹86.9₹5.735.5x13.2%

Looks like the least drunk guest at a wedding full of finance bros. It’s in the game, but nobody’s asking it to dance yet.


12. Miscellaneous – Shareholding, Promoters

ShareholderJun 2025
Promoters74.56%
DIIs0.06%
Public25.38%
Total Shareholders3,879
  • Promoter holding stable, no pledge.
  • Public shareholding unchanged — which tells us nobody’s jumping in or out in panic (yet).
  • Dividend: ₹3/share — enough for chai and toast.

13. EduInvesting Verdict™

Duncan Engineering is like that 60-year-old with a gym membership — it’s not running marathons, but it’s trying. Revenues are slowly ticking up, margins still wheeze under load, and valuations are riding slightly ahead of reality.

A decent pit stop. But don’t expect business class legroom.


Written by EduInvesting Team | 25 July 2025
Tags: Duncan Engineering, Q1 FY26, Pneumatics, Auto Components, EduInvesting Premium

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