This energy-tech microcap went from ₹38 Cr to ₹124 Cr in revenue. But is it truly smart, or just meter-deep?

⚡ At a Glance

Eppeltone Engineers Ltd manufactures smart meters and energy tech gear for DISCOMs and PSUs. In 5 years, revenue tripled and ROE hit 47%, but cash flows and order transparency remain fuzzy. Is this a Bharat Electronics Jr. or just a small-cap hope story?

🏭 1. What Does Eppeltone Actually Do?

Let’s be honest — with a name like “Eppeltone,” you either make military equipment or launch satellites. But nope, they make meters. Smart ones.

📦 Product Portfolio Highlights

• 🔌 Static Energy Meters (Single-phase, Three-phase, Trivector)
• 📱 Smart Meters – BIS 16444 Compliant
• ☀️ Solar Meters
• 🔋 UPS Systems, Battery Chargers
• 💡 LED Luminaires
• 🌐 IoT-Enabled Monitoring Devices
• 💧 Water Meters, BPL Kits

👷‍♂️ Customer Base:
B2B only — state electricity boards, central PSUs, DISCOMs, and EPC/turnkey contractors. No B2C drama.

🚀 Services too:

• Data monitoring
• Grid digitization
• Franchisee model implementation in rural power setups

They’re basically the Indian Smart Meter version of Dell + Havells + TCS (if you really stretch it).

📈 2. Financials: What the Screener Numbers Say

Let’s meter-by-meter decode the last 5 years 👇

📊 TL;DR:

• Revenue: 3x in 5 years
• Net Profit: 11x from ₹1 Cr to ₹11 Cr
• Margins: Wild jump from 2–5% → 14–17%
• ROE: Insanely high at 47% — rare for any cap
• Sales Growth (3Y CAGR): 15%
• PAT Growth (3Y CAGR): 260% 🚀

🧠 “Watt”-a story. But let’s plug into the balance sheet.

📦 3. Assets & Liabilities – Is This a Stable Machine?

• Equity base is low = great for high ROE
• Debt is increasing but manageable
• Reserves tripled in 3 years

🧨 But red flag alert: FY25 cash flow from ops = –₹6 Cr.
Growth is real, but so is the need for working capital.

🚰 4. The Cash Flow Problem

Cash from Operations:

• FY21: ₹1 Cr
• FY22: ₹2 Cr
• FY23: ₹0 Cr
• FY24: ₹5 Cr
• FY25: –₹6 Cr

🛑 So, while profits look great on paper, cash isn’t following through. Possibly due to:

• Delayed payments from DISCOMs (notorious)
• Inventory build-up (Inventory days: 104)
• Increase in receivables (Debtor days: 127)

They’re basically waiting for government clients to say “chalega bhai, NEFT kar diya.”

🧠 5. Key Metrics and Valuation Logic

ROE / ROCE

✅ ROE = 47%
✅ ROCE = 44%
These are elite numbers — even Titan and Bajaj Finance would nod in approval.

P/E Ratio

⛳ P/E: 14.8x
That’s below the peer group median (~26x), and way below Marine Electricals (79x).

Fair Value Range (EduInvesting Style)

Let’s be conservative and value based on sustainable EPS.

• FY25 Net Profit = ₹11 Cr
• EPS (est.) = ₹11 Cr / ~4 Cr shares = ₹2.75
• Assign fair P/E = 20x (due to high ROE but low liquidity)

➡️ Fair Value = ₹55 per share
➡️ Add upside for smart meter tailwind: FV Range = ₹55–65

Current price (TBD): If it’s under ₹50, it’s interesting. If over ₹70, you’re probably buying hope.

🔌 6. Risks? Yes, Plenty

• 🕴️ No details about promoters or shareholding
• 💸 No dividend in 5 years
• 🧾 Weak cash flow despite rising profits
• ⚠️ Government payment delays = chronic headache
• 📦 Working capital days still ~87 = capital stuck
• 📉 No clarity on forward order book

💡 7. Final Verdict – Shock Ya Rock?

If this were a Shark Tank pitch, Aman Gupta would say:

“Smart meter space bada hai, aapke margins ache hain… but main ek offer deta hoon — cash flow sahi karo pehle.”

🔍 What Works

• Strong ROE & Profit Growth
• Good tailwinds in smart meters + energy infra
• Undervalued on P/E basis

🚨 What Sucks

• Negative cash flow
• Zero disclosures on promoters, shareholding
• No moat — purely project order based

🎯 Fair Value Range: ₹55–65

(based on FY25 EPS of ₹2.75 and P/E of 20–24x, considering smart meter optimism)

✍️ Written by Prashant | 📅 18 June 2025
Tags: smart meters, Eppeltone Engineers, PSU suppliers, microcap stocks, energy tech, smart grid, EduInvesting