Linde India FY26: ₹107 P/E and the Margin Miracle Nobody Asked For

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1 — At a Glance

Linde India ended FY26 with ₹2,531 Cr revenue (up 2% YoY) and ₹551 Cr net profit (up 24% YoY). The margin story is wild—operating profit margin hit 36%, the highest in a decade. But here’s the tension: sales are barely growing, the balance sheet is piling cash into capex, and the stock trades at a 107x multiple against peers paying 42.9x.

Profit grew 24% in a year when sales grew 2%. That’s the arithmetic of shrinking costs and rising prices, not of business momentum.

The company ordered a new MD after management turbulence, fought SEBI over related-party dealings, and left shareholders poorer (share count didn’t expand, equity did). Yet the market, indifferent, kept the stock on a cloud.

2 — Introduction

Linde India, a 75%-owned subsidiary of BOC Group (UK), makes industrial and medical gases and sells cryogenic air separation units. It’s been in the business since 1935—oxygen, nitrogen, argon, helium, carbon dioxide. The kind of commodity no one thinks about until it runs out.

The fiscal year to March 2026 handed the company a headline: auditor-issued modified opinion. SEBI’s investigation into related-party transactions with fellow subsidiary Praxair India lingered unresolved, dragging through the Securities Appellate Tribunal and now the Supreme Court. The company sought shareholder approval in March 2026 to re-rate these deals; the shareholders rejected it.

Abhijit Banerjee, the MD, stepped down December 2025. CFO Neeraj Jumrani resigned effective February 2026. Milan Sadhukhan took the helm as new MD. A business fighting market headwinds doesn’t usually shuffle its deck mid-quarter; this one did.

3 — Business Model: WTF Do They Even Do?

Linde sells gases in three flavours: on-site (pipeline gas piped to large customers), merchant bulk (cryogenic tankers to mid-scale buyers), and packaged (cylinders to small users). The gases segment earned 65% of revenue in FY25.

The other 35%: project engineering. The company designs and builds air separation units (ASUs), nitrogen plants, PSA systems, and gas distribution networks. It executed projects for DRDO, BARC, and IPR. In FY26, the order book stood at ₹2,020 Cr.

The capex story: CWIP (capital work in progress) more than doubled from ₹975 Cr (Mar 2025) to ₹1,343 Cr (Mar 2026). The company is building plants to supply Tata Steel in Odisha (two ASUs, one commissioned, one under construction) and signed long-term contracts with Asian Paints (Polymers) in Gujarat. Renewable energy sourcing expanded to 98 million units per annum.

One 1,450 TPD air separation unit at Jindal Stainless commenced commercial production in May 2026. The capex is real, and the revenue is contractually locked. But a business expanding its own asset base is a business no longer living off operating leverage.

4 — Financials Overview

Figures are consolidated, in ₹ crore.

Q4 FY26 quarter (Jan-Mar 2026) delivered ₹614 Cr revenue, ₹86 Cr net profit, ₹9.99 EPS. Full year annualises the quarterly EPS by using the full FY number: ₹64.59.

Concall insight: Management flagged three strategic wins in FY25: Tata Steel decaptivation (1,800 TPD ASU in Odisha), Asian Paints polymer facility expansion (third ASU planned), and renewable energy integration across six sites. None of these hit full-run-rate contribution yet.

5 — Market Expectations & Historical Multiples

This section describes how the market is currently pricing the company and how that compares with its own history and peer group. It is descriptive, not predictive.

The market currently pays 107x earnings here, sitting squarely above its own five-year average of 106x. Against a peer median