Hindustan Composites Limited (HINDCOMPOS) AI Stock Analysis

• Market Cap: ₹5.99B
• Dividend Yield: 0.46%
• Average Volume (3M): 701.00
• Price to Earnings (P/E): 20.1
• Beta (1Y): 1.19
• Revenue Growth: 13.92%
• EPS Growth: -8.06%
• Country: IN
• Employees: 556
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Auto - Parts
• EPS (TTM): 3.58
• Shares Outstanding: 14,769,000
• 10 Day Avg. Volume: 391
• 30 Day Avg. Volume: 701
• PEG Ratio: 10.70
• Price to Book (P/B): 0.59
• Price to Sales (P/S): 1.98
• P/FCF Ratio: 70.08
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 68 Neutral
• Price Target: ₹441.00 ▼(-2.76% Downside)

Hindustan Composites Limited has a strong financial foundation with robust revenue growth and a solid balance sheet, which are the most significant factors driving the score. Technical analysis indicates neutral momentum, while valuation suggests moderate pricing with limited dividend yield. The absence of earnings call and corporate events data means these factors do not influence the score.

Positive Factors

Strong balance sheet

Very low leverage and a high equity ratio give the company durable financial flexibility to fund capex, qualify new OEM customers, and weather cyclical downturns. A strong balance sheet supports long-term investments in quality, certifications, and capacity expansion without reliance on volatile debt markets.

Consistent revenue growth

Sustained mid-teens revenue growth indicates expanding product adoption across OEM and aftermarket channels. Durable top-line expansion supports scale economies, improves bargaining leverage with suppliers, and provides a platform for margin improvement and reinvestment in R&D and customer qualifications over the medium term.

High gross margins / pricing power

Consistently high gross margins suggest the company sells differentiated, safety-critical friction products and maintains pricing power versus commodity competitors. This margin resilience helps absorb raw-material cost swings and funds quality control, product development, and customer qualification processes that underpin long-term market positioning.

Negative Factors

Declining cash conversion efficiency

A deterioration in cash conversion reduces available free cash for maintenance capex, working capital, and strategic investments. Over several quarters this can constrain the ability to expand capacity, meet OEM qualification timelines, or smooth dividend/capital return policies, increasing reliance on external financing if not reversed.

EBIT margin contraction

A falling EBIT margin points to pressure on core operating profitability from input-cost inflation, adverse mix shifts, or efficiency gaps. If persistent, margin erosion undermines return on invested capital, limits reinvestment capacity for product development and capacity, and weakens competitive resilience in industrial contracts.

Negative EPS growth

Negative EPS growth despite revenue expansion suggests margin compression, one-time charges, or rising finance/other costs. If sustained, EPS declines impair shareholder returns, reduce retained earnings for reinvestment, and may complicate long-term incentives for management tied to profitability metrics.

Hindustan Composites Limited Business Overview & Revenue Model

Company Description

Hindustan Composites Limited develops, manufactures, and markets fiber-based friction materials in India. The company's friction materials include automotive brake linings, automotive and industrial roll linings, automotive clutch facings and ceramic buttons, automotive disc brake pads, railway brake blocks, and friction sheets. It also provides industrial thrust bearing and insulation products comprising millboard sheets, millboard discs, compestos, and compestos rings. The company serves various industries, such as automotive, railways, engineering, mining, aerospace, steel, chemical, oil exploration, etc. Hindustan Composites Limited was incorporated in 1964 and is based in Mumbai, India.

How the Company Makes Money

Hindustan Composites Limited generates revenue primarily through the sale of its composite materials and components to various industries, with a strong emphasis on the automotive sector. The company has established key revenue streams from the production of customized solutions that meet specific client requirements, allowing it to command premium pricing for specialized products. Additionally, HINDCOMPOS benefits from long-term contracts and partnerships with major automotive manufacturers and industrial clients, providing a stable income base. The company also invests in research and development to innovate new products, which can open additional revenue channels and enhance its competitive edge in the market.

Hindustan Composites Limited Financial Statement Overview

Summary

Hindustan Composites Limited demonstrates strong financial health with robust revenue growth and profitability. The balance sheet is particularly strong, characterized by low leverage and high equity. While cash flow generation is positive, there are signs of potential efficiency challenges in converting earnings to cash.

Income Statement

Hindustan Composites Limited shows a strong performance in revenue growth, with a notable increase from 2020 to 2025. The gross profit margin has been consistently high, indicating strong pricing power and cost management. Net profit margin is solid, reflecting effective operational efficiency. However, the EBIT margin decreased in 2025, which could indicate rising operational costs or decreased efficiency.

Balance Sheet

The company's balance sheet is robust, with a very low debt-to-equity ratio indicating limited leverage and strong equity financing. The equity ratio is high, showing a strong equity base relative to total assets. Return on equity is healthy, suggesting effective use of equity capital. Overall, the balance sheet reflects financial stability and low risk.

Cash Flow

Cash flows from operations show variability, but free cash flow is positive and growing, indicating good cash generation capability. However, the operating cash flow to net income ratio declined in 2025, which might signal efficiency issues in converting income to cash. The free cash flow to net income ratio also suggests room for improvement in cash generation relative to earnings.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	3.35B	3.25B	2.98B	2.83B	2.32B	1.85B
Gross Profit	1.86B	1.82B	630.91M	1.49B	1.09B	1.09B
EBITDA	591.52M	551.20M	522.16M	414.52M	333.56M	338.56M
Net Income	337.90M	350.00M	344.12M	274.70M	216.02M	197.24M
Balance Sheet
Total Assets	0.00	11.96B	10.81B	10.00B	10.02B	9.18B
Cash, Cash Equivalents and Short-Term Investments	489.70M	489.70M	403.06M	481.00M	407.54M	382.71M
Total Debt	0.00	300.00K	1.15M	10.10M	3.03M	4.21M
Total Liabilities	-10.85B	1.12B	943.44M	791.10M	851.23M	1.01B
Stockholders Equity	10.85B	10.85B	9.87B	9.21B	9.17B	8.17B
Cash Flow
Free Cash Flow	0.00	91.70M	38.16M	86.30M	-22.10M	52.50M
Operating Cash Flow	0.00	298.60M	402.68M	157.00M	49.13M	91.70M
Investing Cash Flow	0.00	-179.10M	-348.64M	-210.10M	47.99M	1.80M
Financing Cash Flow	0.00	-31.20M	-39.36M	-23.80M	-30.72M	-85.80M

Hindustan Composites Limited Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 453.50
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IN:HINDCOMPOS, the sentiment is Negative. The current price of 453.5 is above the 20-day moving average (MA) of 421.01, above the 50-day MA of 427.11, and below the 200-day MA of 457.89, indicating a bearish trend. The MACD of -8.06 indicates Positive momentum. The RSI at 41.09 is Neutral, neither overbought nor oversold. The STOCH value of 23.58 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IN:HINDCOMPOS.

Hindustan Composites Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HINDCOMPOS	68 Neutral	₹5.99B	20.10	―	0.46%	13.92%	-8.06%
MENONBE	66 Neutral	₹6.30B	20.27	―	1.90%	13.38%	13.98%
MUNJALSHOW	66 Neutral	₹4.75B	18.32	―	3.69%	―	―
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
MUNJALAU	56 Neutral	₹7.21B	21.80	―	1.24%	13.34%	-26.93%
SUNDRMBRAK	55 Neutral	₹2.29B	-153.22	―	0.22%	4.26%	-121.56%