HBL Engineering (formerly HBL Power Systems) posted a consolidated PAT of ₹276.92 Cr on ₹1967 Cr revenue for FY25. EPS stood at ₹9.96, and the company declared a 100% dividend of ₹1/share. While the core battery business charged ahead, the electronics segment short-circuited. So is this the real EV infra play or just a greenwashed electronics conglomerate?
⚙️ About HBL Engineering
- Old Name: HBL Power Systems
- Founded: 1977, Hyderabad
- Sectors: Industrial batteries, defence & aviation, electronics, rail, aerospace
- New Identity: Engineering + Energy + Defence Tech
- Subsidiaries: USA, Germany, TTL Electric Fuel, TorqueDrive
- Associates: Naval Systems & Technologies, Tonbo Imaging
Think of it as India’s mini Raytheon — with batteries, bombs, and B2B margins.
👔 Key Management
| Name | Role |
|---|---|
| Dr. A.J. Prasad | Chairman & Managing Director |
| GBS Naidu | Company Secretary |
| LNR Associates | Auditors (✅ Unmodified) |
✅ Auditor’s opinion: Clean
📣 SEBI XBRL-compliant reporting confirmed
📊 Consolidated FY25 Financials
| Metric | FY25 (₹ Cr) | FY24 (₹ Cr) | YoY Change |
|---|---|---|---|
| Revenue from Ops | ₹1,967.2 | ₹2,233.3 | 🔻 -11.9% |
| Total Income | ₹1,993.3 | ₹2,251.3 | 🔻 -11.4% |
| EBITDA (Est.) | ₹441.9 | ₹475.8 | 🔻 -7.1% |
| Net Profit (Consolidated) | ₹276.92 | ₹280.88 | 🔻 -1.4% |
| EPS (Basic/Diluted) | ₹9.96 | ₹10.07 | 🔻 -1.1% |
| Dividend Declared | ₹1.00/share | ₹1.00/share | ➖ No change |
🔋 Margins are stable, but topline slipped. The company held firm despite volume pressure.
📦 Segment Performance (FY25)
| Segment | Revenue (₹ Cr) | Segment Profit (₹ Cr) |
|---|---|---|
| Industrial Batteries | ₹1,396.6 | ₹325.5 |
| Defence & Aviation Batt. | ₹227.2 | ₹85.1 |
| Electronics | ₹298.3 | ₹23.5 |
| Unallocated & Others | ₹49.6 | ₹-22.1 |
💥 Electronics division halved YoY.
💣 Defence segment steady, boosted by Make-in-India tailwinds.
💸 Fair Value Estimate
- EPS: ₹9.96
- Fair Sector P/E: 30x (for power/defence hybrids)
- Fair Value Estimate: ₹299
🎯 CMP: ₹574.80
🧨 Current P/E: ~57x
So clearly — this is a story stock, not a value one.
📈 Balance Sheet Snapshot
| Item | FY25 (₹ Cr) | FY24 (₹ Cr) |
|---|---|---|
| Total Assets | ₹1,979.5 | ₹1,654.1 |
| Net Worth | ₹1,402.74 | ₹1,220.54 |
| Borrowings | ₹104.7 | ₹59.9 |
| Cash & Equivalents | ₹116.95 | ₹223.47 |
| Inventory | ₹533.6 | ₹432.7 |
| Trade Receivables | ₹373.3 | ₹352.3 |
⚠️ Working capital stretch alert — receivables + inventory = ₹900+ Cr
🧃 Cash Flow Snapshot
| Item | FY25 (₹ Cr) | FY24 (₹ Cr) |
|---|---|---|
| Operating Cash Flow | ₹239.13 | ₹272.21 |
| Investing Cash Flow | ₹-319.89 | ₹-138.48 |
| Financing Cash Flow | ₹25.76 | ₹42.27 |
| Net Cash Change | ₹-106.51 | ₹+91.45 |
💧 FCF dried up due to Capex. Cash dropped 48%.
🔋 EduInvesting Take
HBL is quietly turning into an EV & defence infra enabler, but the FY25 story is:
✅ Margins stable
✅ EPS solid
✅ Auditors happy
✅ Dividend declared
🚨 But revenue shrinking
🚨 Electronics flopped
🚨 High valuation (~57x) = frothy
This is not a “battery” company. It’s a defence-electronics-EV-hybrid bouquet priced like a fintech startup.
If Indigo Paints is slow and steady, HBL is fast, wild, and expensive.
⚠️ Risks & Red Flags
- 🔻 Revenue down ~12% YoY
- 🧾 EPS dipped despite stable margins
- ⚠️ High receivables & inventory stress
- 💵 Cash burn rising via Capex
- ⚖️ No clear roadmap for Electronics turnaround
🧠 Final Verdict
HBL Engineering Ltd is doing all the hard things right — from product diversification to government tenders — but the market has already priced in perfection.
At CMP ₹574.80, it’s no longer a deep-value play.
✅ You hold this because you believe in India’s defence + EV infra rise
❌ You don’t hold it for near-term profit expansion
For now, it’s charging — just make sure the battery doesn’t overheat.
Author: Prashant Marathe
Date: May 24, 2025
