TARIL - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 20 Dec 25, 11:16 pm

Fundamental Rating: 3.4

📊 Financials: TARIL shows strong return metrics with ROCE at 24.6% and ROE at 20.0%, reflecting efficient capital utilization. Debt-to-equity is moderate at 0.27, indicating manageable leverage. However, quarterly PAT dropped sharply (₹16.8 Cr vs ₹60.2 Cr), showing earnings volatility. EPS stands at ₹6.80, highlighting modest profitability.

💰 Valuation: Current P/E of 43.8 is in line with the industry average of 43.9, suggesting fair valuation. Book value is ₹42.8, giving a P/B ratio of ~6.9, which is high relative to earnings. PEG ratio of 0.32 indicates growth is reasonably priced. Dividend yield at 0.07% is very low, offering minimal income support.

🏢 Business Model & Advantage: TARIL operates in industrial and engineering solutions, with strengths in specialized manufacturing and diversified product offerings. Competitive advantage lies in strong return metrics, moderate leverage, and exposure to industrial demand. However, earnings volatility reduces overall stability.

📈 Entry Zone: Current RSI at 45.2 suggests neutral conditions. An attractive entry zone lies between ₹250–₹270, closer to support levels and below DMA 50 & DMA 200, offering margin of safety.

🕰️ Long-Term Holding: Suitable for long-term investors due to strong return metrics and manageable leverage. However, earnings volatility and weak dividend yield mean staggered accumulation is advisable during corrections.

Positive

• ✅ Strong ROCE (24.6%) and ROE (20.0%)
• ✅ Moderate debt-to-equity (0.27)
• ✅ PEG ratio (0.32) indicates growth is reasonably priced
• ✅ Neutral RSI (45.2) suggests accumulation opportunity

Limitation

• ⚠️ Sharp decline in quarterly PAT (-60.1%)
• ⚠️ High P/B ratio (~6.9)
• ⚠️ Very low dividend yield (0.07%)
• ⚠️ Stock trades below DMA 50 & DMA 200, showing weak momentum

Company Negative News

• 📉 Quarterly PAT dropped significantly (₹16.8 Cr vs ₹60.2 Cr)
• 📉 Decline in DII holdings (-0.09%)
• 📉 Weak technical momentum (MACD -19.8)

Company Positive News

• 📈 Increase in FII holdings (+0.27%)
• 📈 Strong ROCE and ROE despite earnings volatility

Industry

• 🌐 Industrial and engineering sector supported by infrastructure and manufacturing demand
• 🌐 Industry PE at 43.9, showing TARIL trades at fair valuation

Conclusion

🔎 TARIL is a fundamentally decent company with strong return metrics and manageable leverage. However, earnings volatility and weak dividend yield reduce attractiveness. Investors may consider accumulation near ₹250–₹270 for margin of safety, with long-term holding dependent on stabilization of profitability and sustained industrial demand.

Would you like me to extend this with a peer benchmarking overlay against other industrial players like Thermax, Triveni Engineering, and BHEL, or a sector rotation basket scan to identify undervalued industrial peers for compounding?