At a Glance
Tega Industries just posted ₹200 Cr net profit (TTM) on ₹1,639 Cr revenue—yep, that’s 12 % net margin—while trading at a P/E of ~62×. Auditors might faint at the valuation. Market cap sits at ₹12,500–12,600 Cr, PB ratio ~9×. It’s the industry darling that costs as much as your star quarterback. (Value Research Online)
Introduction
If Tega Industries were a stand‑up comedian, its jokes would be about how fast it grows revenue—but pricey ones. With a P/E north of 60, it’s effectively charging you premium admission to its financial circus. But behind the curtains: recurring consumables, global mining exposure, and machine‑like growths. This article unpacks whether you’re buying popcorn—or being popcorn.
Business Model (WTF Do They Even Do?)
Tega makes consumables—polymer mill liners, conveyor belts, rubber liners—for mining and bulk handling. Boring? Not really. These are critical parts that wear out and get replaced often. That’s why around 86–97% of revenue is from consumables—predictable and sticky. (Screener, Value Research Online) Light roast: it’s like selling Band‑Aids to behemoths—reliable, repeat, not high art. But essential.
Financials Overview
Using the latest numbers: Revenue ₹1,639 Cr; Net Profit ₹200 Cr; EPS ₹30.08 (annualized). Market cap ₹12,500 Cr. That gives a P/E ≈ 62.2× (12,500/200), matching most platforms. ROE ~15.5%, ROCE ~17.7%. Book value per share ₹210, stock trades at ~9× BV. Dividend yield ~0.1 %. (Screener) Growth rates: revenue CAGR 19% (5‑yr), earnings growth ~16% p.a. (www.alphaspread.com)
Sarcastic note: So you’re paying 62 times last year’s earnings for ~16% growth. That’s like buying Netflix at brick‑shop multiples hoping for a second teen drama hit.
Valuation
Let’s use three methods:
1. P/E‑Based
Fair P/E relative to peers (~43×). With EPS ₹30, fair price ≈ ₹1,300. (43×30 = ₹1,290).
2. EV/EBITDA
EV/EBITDA ~29–36× per sources. Conservatively assume industry average 20×. EBITDA: ₹340 Cr. EV fair ≈ 6,800 Cr. Subtract net debt (–₹31 Cr cash) → market cap fair ≈ ₹6,800 Cr. With ~66.5 million shares, fair price ≈ ₹1,020.
3. Discounted Cash Flow
Alpha Spread’s DCF ≈ ₹743/share; Relative valuation gave ₹1,958/share; median intrinsic ≈ ₹1,350/share. (Smart Investing, www.alphaspread.com)
Valuation Range (per methods):
- P/E: ₹1,290
- EV/EBITDA: ₹1,020
- DCF/Relative median: ₹1,350
That yields a fair value range roughly ₹1,020 to ₹1,350. At current price ₹1,880, you’re paying 40–80% premium.
What’s Cooking – News, Triggers, Drama
- Audit switch drama in Aug 2024: Price Waterhouse resigns, replaced by Walker Chandiok. Minor trust wobble. (Screener, tegaindustries.com)
- Capacity expansion approvals (~₹29 Cr) and Chile land acquisition highlight global ambitions. (tegaindustries.com, Screener)
- Subsidiary wins ₹1199 M NMDC contract in June 2024. That’s tasty. (tegaindustries.com)
Balance Sheet
| Item | ₹ Cr |
|---|---|
| Total Assets | 2,095 |
| Total Liabilities | 2,095 |
| Equity (Reserves + Capital) | ~1,397 |
| Borrowings | 330 |
Auditor’s quip: Solid equity cushion, low debt (debt/equity ~0.24). Cash ~₹361 Cr vs debt ₹330 Cr → net cash position. Clean-ish. But working capital days are high around 212 days. (TipRanks)
Cash Flow – Sab Number Game Hai
| Year | Operating | Investing | Financing | Net Cash |
|---|---|---|---|---|
| 2023 | 252 Cr | –96 Cr | –115 Cr | +41 Cr |
| 2024 | 195 Cr | –132 Cr | –38 Cr | +26 Cr |
| 2025 | ∼195* | (est) | (est) | modest |
*Trendlyne shows TTM op cash is positive but free cash flow is not clearly reported. (trendlyne.com)
Stand‑up note: Cash flow is there but not strutting—decent operations, modest capex, zero heroic financing.
Ratios – Sexy or Stressy?
| Ratio | Value |
|---|---|
| ROE | ~15.5% |
| ROCE | ~17.7% |
| P/E | ~62× |
| PAT Margin | ~12% |
| D/E | ~0.24 |
Auditor’s zinger: ROE/ROCE respectable, margins okay, but P/E is so high it needs oxygen support.
P&L Breakdown – Show Me the Money
| Year | Revenue (₹ Cr) | EBITDA (₹ Cr) | PAT (₹ Cr) |
|---|---|---|---|
| 2023 | 1,493 | ~317 | ~194 |
| 2024 | 1,639 | ~340 | ~200 |
| 2025* | ~1,639 | ~340 | ~200 |
*TTM base. Growth is steady but not explosive. (TipRanks)
Jester’s take: Revenue ticking upward, profits chugging along, but you’re paying for optimism, not fireworks.
Peer Comparison
| Peer | Revenue (Cr) | PAT (Cr) | P/E (×) |
|---|---|---|---|
| Jyoti CNC | ~1,817 | ~109 | ~71× |
| Honeywell Auto | ~4,412 | ~511 | ~67× |
| Kirloskar Oil | ~1,300 | ~? | ~59× |
| Tega | 1,639 | 200 | ~62× |
Peers may also be slightly cheaper—some trade at ~40–45× P/E. Tega is on the top end. (simplywall.st, Screener)
Stand‑up quip: Tega’s in the premium club—do you get luxe service or just luxe pricing?
Miscellaneous – Shareholding, Promoters
Promoters hold ~74.8% consistently; DIIs ~18%; FIIs ~1.7%. No promoter pledging. Chairman: Madan Mohan Mohanka; MD: Mehul Mohanka. (Value Research Online)
Promoter roast: Family firm with grip strong enough to keep outsiders guessing—and capital outsiders minimal.
EduInvesting Verdict™
Tega Industries packs solid fundamentals: recurring consumables business, global footprint, consistent mid‑teens ROE/ROCE, comfortable balance sheet, and steady growth (revenue CAGR ~17–19%, earnings ~16%). It’s the dependable backup QB—not flashy, but delivers.
That said, the current P/E of ~62× vs fair value range ₹1,020–1,350/share tells you it’s priced for perfection. Market is expecting continued growth, but with EPS growth guidance ~3–9% forecast, you’re stretching valuations. (simplywall.st, TipRanks, www.alphaspread.com, marketscreener.com) This is optimism priced as inevitability.
Upcoming triggers to watch: next earnings on August 5, 2025; capacity expansion/debt developments; large new global contracts—especially after NMDC win.
SWOT in 5 lines:
- Strengths: Recurring consumables biz, global diversification, solid margins.
- Weaknesses: High working capital, moderate free cash flow visibility.
- Opportunities: Mining capex recovery cycles, new regional contracts, OEM tie‑ups.
- Threats: Slowing global mining demand, raw‑material inflation, execution delays.
- Valuation risk: Any growth misstep could cause serious downside from current price.
Conclusion: This one’s for long‑term believers who envision Tega expanding beyond ₹200 Cr profit at 20%+ CAGR. For others, paying a 40–80% premium seems like buying VIP passes to a show that’s yet to sell out. Risk‑return balance leans toward caution unless you’re very bullish on global mineral capex bounce‑back.
Written by EduInvesting Team | August 1, 2025
SEO Tags: Tega Industries, Mining Consumables, P/E valuation, Indian midcap, financial analysis
