1. At a Glance
Axtel Industries makes those shiny stainless-steel monsters that power your favorite food brands. Custom food processing systems? Check. Profit hiccups in FY25? Also check. But with zero debt, rising dividends, and machinery that touches your daily dosa mix—this one’s worth chewing on.
2. Introduction with Hook
Imagine if every time you munched on a cookie, a little Gujarati machine whispered, “You’re welcome.” That’s Axtel. These aren’t your dad’s lathe-and-hammer workshops—Axtel builds high-precision food processing systems that make Nestlé, ITC, and Unilever go weak in the knees.
- Market Cap: ₹793 Cr
- ROCE: 20.9%
- FY25 Q1 Profit Drop: -54%
Despite a tough FY25 start, Axtel isn’t burning. It’s just preheating.
3. Business Model (WTF Do They Even Do?)
Axtel designs and manufactures custom food processing plants—from dry ingredient handling to spice mixing and liquid slurry systems. This means if you’ve ever eaten a packet of masala oats or instant noodles, chances are the machinery behind it has Axtel’s signature.
Key verticals:
- Food ingredient systems
- Bakery and confectionery lines
- Snack food processing
- Spices, dairy, and beverage mixing systems
They don’t mass-produce machines. They co-create engineering marvels tailored to food majors. Think L&T meets MasterChef.
4. Financials Overview
📉 Q1 FY25 was rough:
- Sales: ₹27.2 Cr (YoY -43%)
- Net Profit: ₹1.9 Cr (YoY -53%)
- OPM down to 5.6% from 12%
🧾 But look back a bit and it’s a different story:
- FY24 Sales: ₹223 Cr
- Net Profit: ₹32 Cr
- 3-Year PAT CAGR: 15%
- Zero debt
- Dividend Payout: 99% in FY25 (hello, generosity!)
Margins are vulnerable due to raw material price swings, but FY24 was a fat slice of profitability.
5. Valuation
Current Price: ₹491
Book Value: ₹75.9
P/E: ~50
ROE: ~15%
Dividend Yield: 1.2%
🧮 Fair Value Range (EduInvesting Method™)
- DCF-based: ₹430 – ₹520
- P/E-based (30–35x sustainable earnings): ₹450 – ₹525
- Reverse ROCE valuation (with conservative margins): ₹400 – ₹490
Verdict? Slightly overheated right now. But long-term, this machine hums.
6. What’s Cooking – News, Triggers, Drama
- Final dividend of ₹11/share recommended for FY25
- Secretarial auditor reappointed (that means stability and governance)
- Capex towards new capabilities expected (possibly frozen-food processing?)
- Working Capital spiked—likely inventory or delayed client billing
Any large order win from an FMCG giant could re-ignite a rally. But market’s appetite right now? Lukewarm.
7. Balance Sheet
| Year | Net Worth | Debt | Cash & Equivalents | Investments | Fixed Assets |
|---|---|---|---|---|---|
| FY25 | ₹122 Cr | ₹0 | ₹28 Cr | ₹57 Cr | ₹29 Cr |
Key Takeaways:
- ZERO debt (rare and juicy)
- Strong reserves (₹106 Cr)
- Massive liquidity buffer via investments and cash
- Real estate upgrades visible in fixed asset jump
8. Cash Flow – Sab Number Game Hai
| Year | CFO | CFI | CFF | Net Cash |
|---|---|---|---|---|
| FY25 | ₹31 Cr | -₹25 Cr | -₹9 Cr | -₹3 Cr |
Analysis:
- Operating cash flow is strong despite muted Q1
- Capex (CFI) was aggressive, signalling future readiness
- Financing outflows mostly dividend-related
Not a cash guzzler, more like a cash ninja—quiet, lethal, and lean.
9. Ratios – Sexy or Stressy?
| Metric | FY25 |
|---|---|
| ROCE | 21% |
| ROE | 15.3% |
| Debtor Days | 67 |
| Inventory Days | 155 |
| CCC | 121 Days |
| Working Capital Days | 144 |
Analysis:
- Working capital ballooned—maybe due to billing mismatch
- CCC is long for an engineering biz; tighter management needed
- ROCE still decent but could slip if Q2 follows Q1
10. P&L Breakdown – Show Me the Money
| FY | Revenue | EBITDA | PAT | OPM | EPS |
|---|---|---|---|---|---|
| FY24 | ₹223 Cr | ₹44 Cr | ₹32 Cr | 20% | ₹19.9 |
| FY25 (TTM) | ₹161 Cr | ₹20 Cr | ₹16 Cr | 12% | ₹9.8 |
Q1 slump is pulling TTM down, but last year was strong enough to cushion impact… for now.
11. Peer Comparison
| Company | P/E | ROCE | OPM | Div Yield | Market Cap |
|---|---|---|---|---|---|
| Axtel | 50.2 | 20.9% | 12% | 1.2% | ₹793 Cr |
| Jyoti CNC | 72.7 | 24.4% | 27% | 0% | ₹23,463 Cr |
| Honeywell Auto | 68.3 | 18.4% | 14% | 0.3% | ₹35,805 Cr |
| Tega Inds | 62.5 | 17.7% | 20% | 0.1% | ₹12,504 Cr |
Positioning:
Axtel is a niche king, but much smaller than its automated giant peers. Valuation premium may not sustain if earnings don’t rebound.
12. Miscellaneous – Shareholding, Promoters
| Shareholder | % Holding (Mar 2025) |
|---|---|
| Promoters | 49.95% |
| FIIs | 0.62% |
| DIIs | 0.99% |
| Public | 48.45% |
| Total Shareholders | ~19,500 |
Observations:
- Steady promoter holding
- Slowly increasing DII and FII interest
- Over 19,000 retail shareholders—a desi retail fanbase
13. EduInvesting Verdict™
Axtel is not a rocketship. It’s more like a slow-turning food-grade screw conveyor—reliable, precision-driven, and valuable to industrial kitchens across India. It doesn’t chase 10x growth, it builds for the long haul.
But the Q1 FY25 dip is a red flag. If order books aren’t revived, FY25 could end up as a digestion problem. That said, zero debt, high cash, strong capex, and solid promoters make this one of the cleaner plates in the SME industrial buffet.
We’ll eat that.
Metadata
– Written by EduInvesting Research | 16 July 2025
– Tags: Axtel, Industrial Equipment, Food Tech, Capital Goods, Smallcap Manufacturing, Dividend Stocks, Debt-Free Gems
