Yuken India Ltd Q2FY26 – Hydraulic Dreams, Japanese Precision & Indian Execution (With a 27% Profit Drop Bonus!)

1.At a Glance

Ladies and gentlemen, let’s talk aboutYuken India Ltd— a company that builds hydraulic systems so precise, even Lord Vishwakarma might nod in approval. Established way back in June 1976 with Yuken Kogyo of Japan as its godfather, this Bengaluru-based player pumps (literally) life into India’s machinery world. The latest quarter though, came with a little“hydraulic leakage”— Q2FY26 revenue slipped2.7% QoQ to ₹112.53 crore, while profit dropped a not-so-cute27% to ₹5.12 crore.

At a market cap of₹1,237 croreand a current price of₹905, the stock trades at a rather premiumP/E of 57.5x— clearly, investors think it’s the Tesla of pumps. Return on Equity sits at8.49%, which is okay-ish; Return on Capital Employed (ROCE) is11.1%, indicating the business makes more money than your fixed deposit, but not by much.

Fun fact — Yuken India’s Japanese promoter,Yuken Kogyo Co Ltd, now holds a solid47%, thanks to a recent preferential issue worth ₹60 crore. That’s right — the Japanese just topped up their hydraulic love.

As theBhagavad Gitagently reminds us —“Karmanye vadhikaraste ma phaleshu kadachana”— do your duty, not for the results. Maybe that’s what the management told shareholders this quarter when PAT wentpoof.

2.Introduction

Imagine you’re at a car factory — every press, lift, and mold runs because of hydraulics. That’s Yuken India’s world. The company makes the unsung heroes of industrial machinery — pumps, valves, and cylinders. Basically, if machines were humans, Yuken builds their hearts.

Yuken started as a technical collaboration between Japan’s Yuken Kogyo and India’s engineering dreamers in 1976. Over the decades, it’s turned into a full-blown manufacturer of hydraulic pumps, pressure controls, and power packs. Today, the company operatesnine plantswith a combined annual capacity of90,000 pumps,7.8 lakh valves, and20,000 power packs. That’s not just scale — that’s a mechanical orchestra.

But here’s the irony: while Yuken’s products lift everything from JCB diggers to Tata Steel cranes, the stock price recently couldn’t lift itself. Over the lastsix months, it’s down 18%. In the last year, down19.2%. Maybe the investors forgot the “pressure control” part of Yuken’s products.

Yet, the fundamentals are fascinating. The company’ssales grew 13.6% CAGR over five years, andprofit CAGR was 51%, which makes its historical journey sound like a spiritual redemption arc. After all, the only thing more satisfying than watching metal move fluidly is watching your EBITDA margins rise from 8% to over 12%.

3.Business Model – WTF Do They Even Do?

Let’s decode this hydraulic yogi.

Yuken India basically produces and sellshydraulic pumps, valves, cylinders, and hydraulic power units— the essential components that power industrial automation, plastics molding machines, construction vehicles, and even steel plants.

Their product mix (as of FY20) reads like a pump-obsessed playlist:

• Valves:40% of revenue (up from 33% in FY18)
• Pumps:28% of revenue (up from 22%)
• Others:Cylinders, hydraulic power units, etc. make up the remaining 32%.

Now, who buys this stuff? Everyone fromBHELandTATA Steel, toJCB,Escorts, andToshiba Machine. Basically, if you’re lifting, pressing, or molding something industrial — odds are, Yuken’s hardware is somewhere in that ecosystem.

Distribution-wise, they have66 channel partnersacross15 countries, but 98% of revenue is still domestic. The global ambitions are still, well, hydraulic-in-progress.

Also, let’s not forget their “eco” innovations —Kiriko Automatic Chip Compactor(a machine that turns metal chips into dense briquettes to cut waste), andAC Servo Motor Driven Pumps, which save power and reduce noise. Essentially, it’s like Tesla for oil-powered machines — quieter, cleaner, and occasionally shocking when you see the bill.

4.Financials Overview

Let’s dive into the quarterly numbers — because that’s where the hydraulic oil hits the fan.