1.At a Glance
If radiators had a brand ambassador, Banco Products (India) Ltd would probably make them walk the ramp with pride — polished aluminum, steady margins, and all. At ₹708 per share (as of 21 Nov 2025), the company sits comfortably with amarket cap of ₹10,127 crore, flexing aROE of 32.2%,ROCE of 32.4%, andP/E of 23.4x— cheaper than many auto ancillaries that still burn more oil than cash.
In Q2FY26 (Sep 2025), Banco clocked₹1,038 crore in revenueand₹139 crore in net profit, showing resilience amid global auto chaos. TheOperating Profit Margincooled slightly to14%from 19% QoQ, but still kept things “temperate.” Its Q2 EPS? A sizzling₹9.71, annualized to about ₹39 — enough to make its P/E look like a reasonable dinner bill for once.
The board recently declared aninterim dividend of ₹7/share (350%), because apparently even radiators like to share some warmth.
Banco is no longer that silent auto parts supplier from Vadodara — it’s now a global cooling giant exporting to 80+ countries through its European armNRF, which just opened new warehouses in Romania and Turkey. Clearly, someone turned the “expansion mode” thermostat up to max.
2.Introduction – When Radiators Meet R&D and the Dividend Flows Like Coolant
Imagine a Gujarati family business that’s been making cars chill since 1961 — and still finds new ways to make money from metal and coolant. That’s Banco Products for you. It started with radiators and engine cooling systems when cars were a luxury, and now, even in the EV era, it’s finding ways to stay cool — literally.
While many auto component players whine about input costs and export headwinds, Banco is busy announcing new warehouses in Europe, acquiring turbocharger businesses, and expanding EV cooling systems. It’s the corporate equivalent of that uncle who quietly builds three new houses while everyone else is still figuring out EMIs.
The company’ssales have jumped 40% between FY22 and FY24, a feat not many legacy component manufacturers can brag about. Add to that aconsistent ROE above 30%,no promoter pledges, andzero drama in shareholding, and Banco looks like the kind of stock your conservative dad would accidentally pick and then never sell.
But wait — this isn’t a fairy tale. Costs have been rising, margins fluctuate like temperature gauges, and its European subsidiaryNRF France S.A.S.recently dealt with a warehouse fire (insurance covered, thankfully). Yet, the group’s global spread and strong OEM relationships make it one of the rare “auto ancillaries” that can truly flex on both OEMs and the aftermarket.
3.Business Model – WTF Do They Even Do?
Banco Products manufacturesengine cooling modules— the stuff that keeps engines, oil, fuel, and transmissions from frying themselves to death. If your car doesn’t overheat in May traffic, thank Banco. Their product basket includes radiators, oil coolers, charge air coolers, condensers, and even gaskets that prevent oil leaks — the true unsung heroes of combustion sanity.
The company servesOEMs (55–60% revenue),Aftermarket (15%), andExports (30%). That means they’re not begging any one segment to survive — a nicely diversified mix.
They’re also heavily invested abroad throughNRF, their Netherlands-based wholly-owned subsidiary, which contributes the bulk of exports and runs a European logistics empire with19 warehousesacross the continent.
On the home turf, Banco hasfive manufacturing plantsproducing up to3.33 million radiators annually. Their distribution network in India has six regional offices, ensuring that a broken radiator in Kerala or Kanpur can find a Banco replacement faster than you can say “engine overheat.”
And here’s the EV twist — Banco set upBanco New Energy Cooling Systems, a dedicated unit to build heat exchangers for electric vehicles and locomotives. If ICE engines were yesterday’s heroes, Banco is already selling the coolant for tomorrow’s Teslas and Tatas.
So, in short: they make cars run cooler, margins stay hotter, and dividends flow smoother.
4.Financials Overview
| Metric | Latest Qtr (Sep’25) | YoY Qtr (Sep’24) | Prev Qtr (Jun’25) | YoY % | QoQ % |
|---|---|---|---|---|---|
| Revenue (₹ Cr) | 1,038 | 895 | 970 | 16.0% | 7.0% |
| EBITDA (₹ Cr) | 149 | 206 | 182 | -27.7% | -18.1% |
| PAT (₹ Cr) | 139 | 139 | 110 | 0.0% | 26.4% |
| EPS (₹) | 9.71 | 9.70 | 7.66 | 0.1% | 26.7% |
Commentary:Banco’s
top line is growing steadily, but margins took a temporary hit due to higher material and logistics costs — possibly linked to NRF’s expansion spree. However, PAT stayed flat YoY at ₹139 Cr, meaning the bottom line is solid as a forged piston. Annualized EPS at ₹39. That gives aP/E of 18x— which for a high-ROE exporter is almost suspiciously reasonable.
5.Valuation Discussion – Fair Value Range (Educational Only)
Method 1: P/E Method
- Annualized EPS: ₹9.71 × 4 = ₹38.84
- Reasonable P/E range for auto ancillary exporters: 20x–25x
- Fair Value = ₹776 – ₹971/share
Method 2: EV/EBITDA Method
- EV: ₹10,744 Cr
- FY25 EBITDA (TTM): ₹604 Cr
- EV/EBITDA = ~17.8x
- Sector average = 15–20x
- Implied Value Range:₹650 – ₹870/share
Method 3: DCF (simplified)Assume FCF growth 12%, discount rate 10%, terminal multiple 15x, 5-year horizon →Fair Value Range ₹720–₹950/share
✅Fair Value Range (Educational Purpose Only): ₹720 – ₹950/shareDisclaimer: This range is for educational purposes only and not investment advice. Do not use this to justify buying radiators or stocks.
6.What’s Cooking – News, Triggers, Drama
Banco’s last few months looked like a Netflix mini-series titled“Coolant Empire Expansion Saga”.
- Dividend Delight (Nov 2025):Interim dividend ₹7/share (350%), record date Nov 19, payment post Nov 27. Shareholders are smiling like radiator caps popping at high pressure.
- Subsidiary Hustle (2025):
- NRF France S.A.S.faced a warehouse fire in Aug 2025 — thankfully insured, minimal impact.
- NRFalsoacquired Alanko’s turbocharger businessin May 2025 for €2.08M, adding more “boost” to its portfolio.
- New subsidiaries inTurkey and Romanialaunched in April — to strengthen logistics and reduce delivery times.
- Newfactory in Polandopened in April to scale up production.
- CFO Exit Drama:CFO & Whole-time Director resigned effective April 30, 2025. The company handled it smoothly — no “engine seizure” in management.
- Acquisition Moves (Feb 2025):Banco executed aBusiness Transfer Agreement with Padra Coating Works LLP, probably to bring more backward integration and cost efficiency.
Translation: Banco isn’t just sitting on radiator pipes — it’s building an international heat management empire.
7.Balance
