1. At a Glance
Indo Farm makes tractors, cranes, and harvesters—but despite building things that lift, its stock is struggling to lift off. With a ₹1,017 Cr market cap, a lofty 43x P/E, and flat growth, is this farmer’s friend planting seeds of profit… or weeds?
2. Introduction with Hook
Imagine building tractors that plow fields, cranes that lift 30-ton payloads, and combines that harvest acres—yet investors are harvesting only 5% ROE.
Welcome to Indo Farm Equipment, where horsepower on the ground doesn’t always mean horsepower in the earnings.
- FY25 Net Profit: ₹24 Cr
- OPM slipped from 18% to 15%
- Revenue CAGR (5Y): ~10%
- Promoter holding: 69.44%
And yes, zero dividends so far.
3. Business Model – WTF Do They Even Do?
Indo Farm Equipment manufactures and sells:
- Tractors (16–110 HP)
- Pick & Carry Cranes (9–30 tons)
- Harvesters, Rotavators & Farm Implements
It operates under the brands Indo Farm and Indo Power. Distribution is pan-India with exports to Africa, SAARC, and Southeast Asia.
New bet: Tower Cranes from Chinese tech acquisition, expanding into infra equipment.
4. Financials Overview
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue (₹ Cr) | 356 | 360 | 387 |
| EBITDA (₹ Cr) | 59 | 63 | 58 |
| Net Profit (₹ Cr) | 15 | 16 | 24 |
| EPS (₹) | 8.19 | 4.15 | 4.90 |
| ROE (%) | 5.7% | 4.2% | 5.6% |
| ROCE (%) | 9.2% | 9.0% | 7.7% |
Flat revenue, wobbly profits, and a fall in margins—farmers aren’t the only ones needing rain here.
5. Valuation – What’s This Stock Worth?
- TTM EPS = ₹4.9
- Current P/E = 43.2
- Fair P/E Range for this segment: 15x – 25x
- Fair Value Range = ₹73 – ₹123
At ₹212, stock is pricing in a green revolution that hasn’t started yet.
6. What-If Scenarios
| Scenario | Potential Impact |
|---|---|
| Tower crane biz succeeds | New ₹100+ Cr segment |
| Tractor exports to Africa scale | Better margins + FX boost |
| OPM improves back to 18% | ₹7–9 Cr extra annual profit |
| Interest burden rises again | EPS compression |
7. What’s Cooking – News, Triggers, Drama
- Tower crane tech acquired from Sichuan Hongsheng (China)
- Beida deal signed for quick manufacturing capability
- Q4FY25 EPS: ₹2.81, sharp rise due to lower tax rate
- Acquisition of 18M shares in Barota Finance (NBFC)
The tower crane move is bold—but execution is the real harvest.
8. Balance Sheet
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Equity (₹ Cr) | 291 | 318 | 531 |
| Borrowings (₹ Cr) | 281 | 272 | 173 |
| Fixed Assets (₹ Cr) | 206 | 202 | 214 |
| CWIP (₹ Cr) | 8 | 5 | 9 |
| Total Assets (₹ Cr) | 623 | 648 | 762 |
Debt reduced by ₹100 Cr in FY25—a rare rural miracle.
9. Cash Flow – Sab Number Game Hai
| Year | CFO (₹ Cr) | CFI (₹ Cr) | CFF (₹ Cr) | Net Flow (₹ Cr) |
|---|---|---|---|---|
| FY23 | 30 | –8 | –22 | ~0 |
| FY24 | 41 | –3 | –26 | +12 |
| FY25 | 53 | –75 | +68 | +46 |
Free cash is back. But capex on cranes is cash-heavy. Watch that burn.
10. Ratios – Sexy or Stressy?
| Ratio | FY24 | FY25 |
|---|---|---|
| ROCE (%) | 9.0% | 7.7% |
| ROE (%) | 4.2% | 5.6% |
| Debt/Equity | 0.85x | 0.33x |
| OPM (%) | 18% | 15% |
| Interest Coverage | Weak | Slightly Better |
Declining return metrics + high P/E = 🚨 Value Trap territory.
11. P&L Breakdown – Show Me the Money
| Quarter | Revenue (₹ Cr) | PAT (₹ Cr) | OPM (%) |
|---|---|---|---|
| Q1 FY25 | 75 | 2 | 16% |
| Q2 FY25 | 86 | 4 | 15% |
| Q3 FY25 | 96 | 4 | 15% |
| Q4 FY25 | 130 | 14 | 14% |
Q4 looks sharp, but was it a one-time tax dip or sustainable margin gain?
12. Peer Comparison
| Company | P/E | ROCE % | ROE % | Revenue (₹ Cr) | OPM % |
|---|---|---|---|---|---|
| Escorts Kubota | 30x | 13.6% | 12.8% | 10,243 | 11.4% |
| VST Tillers | 38x | 12.8% | 9.8% | 995 | 11.1% |
| Indo Farm Equip | 43x | 7.7% | 5.6% | 387 | 15.0% |
Valuation like Escorts. Profitability like… a second-hand Mahindra 475 DI.
13. EduInvesting Verdict™
Indo Farm makes good hardware—but the financial engine still sputters. At 43x P/E with:
- Falling margins
- ROE below 6%
- Modest growth
- No dividend
…it’s hard to justify the valuation unless the tower crane business lifts earnings or exports turbocharge revenue.
For now, it’s a slow tractor in a fast-lane segment.
Metadata
– Written by EduInvesting Analyst | July 20, 2025
– Tags: Indo Farm Equipment, Tractors, Cranes, Tower Crane Acquisition, Auto & Agri Stocks
