1. At a Glance
SML Isuzu just reported its best-ever quarterly profit—Rs. 67 Cr in Q1 FY26, clocking a 44% YoY jump! From being the slow-moving cousin of Ashok Leyland, this LCV/MCV player is now speeding into the limelight, thanks to sharp operational turnaround, Isuzu muscle, and market tailwinds.
2. Introduction with Hook
Imagine a Maruti 800 overtaking a Ferrari on a twisty hill road. That’s SML Isuzu in FY26.
This microcap underdog—often dismissed as “just another CV stock”—has pulled off a Dhoni-style helicopter shot in a market full of flat innings.
- Q1 FY26 PAT: Rs. 67 Cr (vs Rs. 46 Cr YoY)
- 3-Year Stock CAGR: 73% (Yes, more than a few smallcap mutual funds)
Welcome to the SML Show—Limited by name, unlimited by surprise.
3. Business Model (WTF Do They Even Do?)
SML ISUZU makes Commercial Vehicles:
- Buses (67% of revenue): For schools, staff transport, and tourist coaches.
- Trucks (26%): Primarily for intra-city and last-mile cargo movement.
- LCVs + MCVs: Core niche segment (5–13 tonne range) where biggies like Tata Motors aren’t hyperfocused.
Unique Angle:
SML doesn’t compete with Ashok Leyland head-on. Instead, it thrives in the not-so-glamorous rural/municipal segment, where rugged, low-maintenance vehicles win.
4. Financials Overview
Q1 FY26 Snapshot (Rs. Cr):
Metric | Q1 FY26 | YoY Change |
---|---|---|
Revenue | 846 | +34% |
EBITDA (approx) | 105 | +30% |
Net Profit | 67 | +44% |
OPM | 12% | Up 100 bps |
EPS | 46.27 | Rockstar |
TTM Sales: Rs. 2,498 Cr
TTM PAT: Rs. 142 Cr
Debt: Down from Rs. 421 Cr to Rs. 327 Cr
Verdict:
You know the term “operating leverage”? This is it—live, in action, with turbocharged margins.
5. Valuation
Let’s talk range, not guesswork.
Current Price: ₹3,675
Trailing EPS: ₹98.29
Book Value: ₹264
P/E: 37.5x (bit spicy)
P/B: 13.9x (very spicy)
Fair Value Range:
Method | Fair Value Range (₹) |
---|---|
DCF (Conservative) | 2,900 – 3,200 |
Relative Valuation (P/E 28–30x) | 2,750 – 3,500 |
Market Mood Based | 3,500 – 4,200 (if bulls high) |
Conclusion:
Pricey on P/B, but earnings growth is making bulls look the other way.
6. What’s Cooking – News, Triggers, Drama
- Q1 FY26 Surprise Beat: 12% OPM, net profit up 44%
- New Bus Contracts: Rumors of fresh state transport orders brewing
- Electric CV?: No concrete EV announcement yet, but with Isuzu behind, anything’s possible
- FII Holdings: Jumped from 1.76% to 15.73% in a year
- Re-rating Candidate: Smallcap turned “scalp-cap” for institutions
7. Balance Sheet
FY25 Snapshot (₹ Cr):
Particulars | Value |
---|---|
Equity + Reserves | 382 |
Borrowings | 327 |
Other Liabilities | 590 |
Total Liabilities | 1,299 |
Fixed + CWIP | 380 |
Current Assets | 919 |
Cash & Investments | Nil. Cash flows are king here. |
Key Insight:
Debt reduced despite capex—free cash flow revival is real.
8. Cash Flow – Sab Number Game Hai
Cash Flow Trends (₹ Cr):
Year | CFO | CFI | CFF | Net Flow |
---|---|---|---|---|
FY23 | 90 | -42 | -55 | -7 |
FY24 | -50 | -46 | 127 | 31 |
FY25 | 177 | -61 | -148 | -32 |
Why it Matters:
FY25 saw a healthy CFO resurgence after FY24’s cash hiccup. Promising trend for long-term sustainability.
9. Ratios – Sexy or Stressy?
Metric | FY25 | FY24 |
---|---|---|
ROE | 36.4% | 30.1% |
ROCE | 27.1% | 24.0% |
Debtor Days | 40.4 | 28.0 |
Inventory Days | 116 | 125 |
Cash Conversion | 82 Days | 81 Days |
Concern:
Debtor days jumped. Might need a gentle “pay up please” reminder to customers.
10. P&L Breakdown – Show Me the Money
Year | Sales | EBITDA | OPM % | PAT | EPS |
---|---|---|---|---|---|
FY23 | 1,822 | 82 | 4% | 20 | 13.7 |
FY24 | 2,398 | 234 | 10% | 122 | 84.1 |
FY25 (TTM) | 2,498 | 258 | 10.3% | 142 | 98.3 |
Mic Drop:
From flatlining in FY21 to doubling profits in FY25—turnaround has been smoother than a luxury bus ride.
11. Peer Comparison
Company | CMP (₹) | P/E | ROE % | Market Cap (₹ Cr) | PAT (TTM ₹ Cr) | OPM % |
---|---|---|---|---|---|---|
SML Isuzu | 3,675 | 37.5 | 36.4 | 5,332 | 142 | 10.3 |
Ashok Leyland | 124 | 23.5 | 29.2 | 72,826 | 3,098 | 19.0 |
Atul Auto | 453 | 68.6 | 4.3 | 1,257 | 18.3 | 7.2 |
Positioning:
SML Isuzu is neither the cheapest nor the biggest—but it’s possibly the most aggressive on margins and comeback story.
12. Miscellaneous – Shareholding, Promoters
Category | Q1 FY26 |
---|---|
Promoters | 43.96% |
FIIs | 15.73% |
DIIs | 0.29% |
Public | 40.02% |
No. of Holders | 28,716 |
Fun Fact:
FII holding jumped nearly 9x in just over a year. Clearly, the Japanese connection + CV growth = new institutional darling.
13. EduInvesting Verdict™
From a company that once got lost in the CV traffic to a profit machine with roaring margins and institutional love, SML Isuzu is rewriting its legacy.
- Strong ROE? Check.
- Cash flows returning? Check.
- Operating margins in double digits? Oh yes.
- Debt under control? Improving.
- Valuation? Bit pricey, but worth watching.
It’s not a Tata, not an Ashok—but definitely not to be ignored anymore. Buckle up—this one’s on the move.
Metadata
– Written by EduInvesting Team | 22 July 2025
– Tags: SML ISUZU, Commercial Vehicles, Auto Sector, Q1 FY26, Isuzu Motors, Sumitomo