1. At a Glance – Boiler, Heat Exchanger aur Thoda Drama
Loyal Equipments Ltd is currently trading at ₹163, with a market cap of ₹176 Cr. In the last 3 months, the stock is down 5.06%, and over 1 year, it has corrected 24.1%. So yes, investors who entered at the top are currently experiencing “thermal expansion” of stress.
But here’s the twist — the company has delivered:
- ROCE: 28.3%
- ROE: 26.5%
- P/E: 22.4
- Debt to Equity: 0.11
- Sales (TTM): ₹77.43 Cr
- PAT (TTM): ₹7.87 Cr
And Q3 FY26 revenue stands at ₹23.55 Cr, up 25.9% YoY, but profit has dropped 39.2% YoY.
So the question is simple:
Are we looking at a high-ROE niche engineering company temporarily wobbling…
Or a small-cap industrial player whose margins have started sweating?
Welcome to the world of pressure vessels, heat exchangers and financial heat tests.
2. Introduction – The Engineering Underdog With Big Clients
Incorporated in 2007, Loyal Equipments manufactures industrial and engineering equipment for sectors like Oil & Gas, Petrochemicals, Fertilizers, Steel, Sugar, and Power Plants.
They are:
- ISO 9001 certified
- ASME U, U2 & NB stamp holder
Translation: Not your average welding shop in an industrial shed.
Their clientele includes names like:
EIL, GAIL, ONGC, Linde, L&T, Reliance, Ingersoll Rand, ALSTOM.
For a company with ₹176 Cr market cap, that’s like having celebrity contacts while still living in a 1BHK.
But engineering is not Instagram. It is lumpy, order-based, project-driven, and payment cycles can be… dramatic.
Revenue growth over 3 years: 32.7% CAGR
Profit growth over 3 years: 59.8% CAGR
Sounds impressive, right?
But here’s the catch — TTM profit growth is negative (-25%). So something slowed down.
Is it execution? Cost pressure? Or timing mismatch of projects?
Let’s dig.
3. Business Model – WTF Do They Even Do?
Okay imagine this.
You are building a refinery.
You need:
- Pressure vessels
- Shell & tube heat exchangers
- Air cooled heat exchangers
- Storage tanks
- Compressor skids
- Heavy
