Swaraj Engines Ltd

Price story Before the numbers, the tape. A stock price moves through four repeating seasons: a flat base (stage 1), an advance (2), a top (3), a decline (4). Where the price sits in that cycle frames everything below.

Swaraj Engines Ltd trades at ₹3,576, in a downtrend and 3 weeks into that stage. That is −3.6% against its own 200-day average. It sits at 24% of a 52-week range of ₹3,428 to ₹4,053. On relative strength it is currently behind the NIFTY 500 on a trailing-13-week view (11 weeks and counting).

Today the stock is in a downtrend — week 3 of stage 4, confirmed. At ₹3,576 it trades −3.6% versus its 200-day average and sits at 24% of its 52-week range (₹3,428–₹4,053).

Against the market, two honest reads. Cumulative: over the last 10.5 years the stock moved +320% while the NIFTY 500 moved +267% — ahead of the index over the full window. Recent form: on a trailing-13-week view the stock is currently behind (11 weeks and counting; last ahead the week of 2026-07-01) — the ribbon below is that same metric, week by week.

What would end the trend, mechanically: two Friday closes in a row below the 200-day line. That is the exit rule — no debates.

Story check

Swaraj Engines Ltd's story is not scored yet against the markers our research file set on 27 June 2026. Where it sits in its own cycle: MID_EXPANSION.

Our read, 27 June 2026. Captive engine supplier to M&M's tractor business delivering steady double-digit earnings growth at mid-cycle valuations, with near-zero debt and a return on capital that has remained structurally above 50% across a full tractor cycle.

From the numbers. PE has been compressing for several quarters — from 30.4 in Mar'24 to 24.3 now (C009) — while EPS continues rising at a 14% annual slope (C010). This is de-rating compounder behaviour: the market is not re-rating for…

From the price. Price stage 4, week 3 — below its 200-day line, relative strength rising.

From the research. Captive engine supplier to M&M's tractor business delivering steady double-digit earnings growth at mid-cycle valuations, with near-zero debt and a return on capital that has remained structurally above 50% across a…

🚨 Where they disagree. EMERGING_OPPORTUNITY.

What is proven. Captive engine supplier to M&M's tractor business delivering steady double-digit earnings growth at mid-cycle valuations, with near-zero debt and a return on capital that has remained structurally above 50% across a full tractor cycle.

What is not proven yet. Two consecutive quarters of reported revenue declining more than 10% on a YoY basis, confirmed by SIAM monthly tractor data showing M&M losing market share or total tractor industry volumes falling for two seasons, would signal that the captive-supplier advantage has weakened and that volume attrition is structural rather than seasonal.

🚨 What would change our mind. Two consecutive quarters of reported revenue declining more than 10% on a YoY basis, confirmed by SIAM monthly tractor data showing M&M losing market share or total tractor industry volumes falling for two seasons, would signal that the captive-supplier advantage has weakened and that volume attrition is structural rather than seasonal.

🚨 What the surface reading misses. The surface reading is: ROCE 58.4% is at the 90th percentile of its own 10-year history — a potential cycle-topping flag. The research reads it further: The 90th-percentile reading is structural, not cyclical. Near-zero debt (borrowings Rs 2cr) and a negative cash conversion cycle (CCC = -3 days) mean Swaraj Engines earns high returns on minimal net capital — not from elevated margins (OPM at the 49th percentile, mid-cycle) but from capital-light operations. The through-cycle average of 52% is itself above-average, confirming this is a business with structurally elevated returns rather than a temporarily elevated reading.

🚨 What the surface reading misses. The surface reading is: OCF/PAT dropped to 0.60 in FY26 from a 3-year average of 0.87 — a below-threshold cash conversion signal requiring investigation. The research reads it further: The divergence has three identified components. First, working capital absorbed Rs 101cr in FY26 — this is primarily a volume-scaling effect, not a collection problem, as CCC improved from -1 day (FY25) to -3 days (FY26) and inventory days fell from 22 to 17. The WC absorption reflects the absolute rupee size of the working capital block growing with revenue, not deterioration in cycle efficiency. Second, capex tripled to Rs 69cr. Third, CWIP jumped from Rs 5cr to Rs 55cr, confirming active capacity construction. These are growth-reinvestment outflows, not operating deterioration.

Sources: our stock research file (27 June 2026) · quarterly results through Jun 26. The story check is re-scored every results season; the record below never changes.

Revenue Revenue is the top line: everything the company billed its customers in the period.

Swaraj Engines Ltd reported ₹588 Cr of revenue in the Jun 26 quarter, +21.5% year on year. That is the 9th straight quarter of year-on-year growth. Over 10 years it has compounded at 14.3% a year. The last full year, FY26, came in at ₹2,007 Cr. The last four reported quarters add to ₹2,111 Cr.

FY26 revenue came in at ₹2,007 Cr (+19.3% on the year), capping 10 years at 14.3% compound. The latest quarter (Jun 26) printed ₹588 Cr, +21.5% year on year — the 9th consecutive quarter of year-over-year growth.

Pace check: the last four quarters averaged +21.8% growth against the decade's 14.3% — the current year is running faster than its own long-run rate.

Acceleration check: trailing-twelve-month revenue grew +20.8% over the last 4 quarters against +21.2%/yr over the last 8 — stabilising; TTM profit +18.0% vs +20.4%/yr — stabilising.

FY26-Q4. revenue ₹546 Cr and profit ₹55 Cr as reported.

FY27-Q1. revenue ₹588 Cr and profit ₹56 Cr as reported.

Why-sources: our stock research file (27 June 2026) and the company’s own results for those quarters.

Operating margin Operating margin is what is left of every ₹100 of sales after running the business, before interest and tax. It is the cleanest read on pricing power and cost control.

Swaraj Engines Ltd's operating margin is 13.0% in the Jun 26 quarter, −1.0 percentage points against the same quarter a year ago. Across 13 fiscal years the operating margin has ranged 13.0% to 16.0%. The current quarter sits inside that band.

The latest quarter's operating margin is 13.0%, −1.0 pp against the same quarter a year ago. Across 13 fiscal years the operating margin has ranged 13.0%–16.0%.

🚨 Why the margin moved: operating margin went −0.8 pp year on year while gross margin went −0.4 pp — the loss came mostly below the gross line: operating leverage, with costs spread over a bigger revenue base.

FY26-Q4. revenue ₹546 Cr and profit ₹55 Cr as reported.

FY27-Q1. revenue ₹588 Cr and profit ₹56 Cr as reported.

Why-sources: our stock research file (27 June 2026) and the company’s own results for those quarters.

Net profit Net profit is what survives every cost, interest and tax — the number EPS, dividends and book value all grow from.

Swaraj Engines Ltd earned ₹56.0 Cr of net profit in the Jun 26 quarter, +12.0% year on year. It is the 9th consecutive quarter of growth. Full-year FY26 profit was ₹196 Cr. The 10-year compound rate is 14.4%. That is 9.5% of the quarter's revenue. The same quarter a year earlier earned ₹50.0 Cr.

Jun 26 profit was ₹56.0 Cr, +12.0% year on year — the 9th consecutive quarter of growth. On the full year, FY26 printed ₹196 Cr (+18.1%), and the 10-year compound rate is 14.4%.

Why profit moved: revenue contributed +21.5% and the margin −1.0 pp — the quarter was revenue-led, with the margin roughly flat.

Pace comparison, last four quarters: profit +19.1% vs revenue +21.8%. Profit and revenue are moving roughly in step.

FY26-Q4. revenue ₹546 Cr and profit ₹55 Cr as reported.

FY27-Q1. revenue ₹588 Cr and profit ₹56 Cr as reported.

Why-sources: our stock research file (27 June 2026) and the company’s own results for those quarters.

Cash flow — the router The P&L says what was earned; the cash-flow statement says what actually arrived. Operating cash flow (CFO) against profit is the cleanest lie detector in the accounts.

Over the last 3 fiscal years 87% of Swaraj Engines Ltd's reported profit arrived as operating cash — the cash follows the profit. In FY26 that was ₹117 Cr of operating cash against ₹196 Cr of profit. After ₹69.0 Cr of capital spending, ₹48.0 Cr was left as free cash.

FY26: operating cash of ₹117 Cr against reported profit of ₹196 Cr, leaving free cash of ₹48.0 Cr after ₹69.0 Cr of capital spending. Across the last 3 fiscal years the conversion rate is 87% of profit.

Cash-flow readings here are annual — that is the resolution our series carries, so this section moves once a year.

Why conversion sits at 87%: the cash cycle held roughly steady between FY21 and FY26 — so conversion tracks profitability rather than the cycle.

Router verdict: the bigger cash user is investment — capital spending ran 2.2× depreciation over three years, so the next section's job is to check what that build-out is buying.

Where the cash goes Working capital is the cash tied up between paying suppliers and getting paid: debtor days (customers owe), inventory days (stock waits), and the cash conversion cycle (the whole loop, in days of sales).

Swaraj Engines Ltd's cash conversion cycle runs −3 days in FY26, up from −7 days in FY21. Capital spending ran ₹131 Cr over the last 3 years. At FY26 sales of ₹2,007 Cr each day of that cycle holds about ₹5.5 Cr, so roughly ₹−16.0 Cr sits inside the business at any moment.

FY26: debtors at 37 days, inventory at 17 days — roughly 0.6 months of stock waiting to sell; that is where the cash sits while it waits — for a full cycle of −3 days, looser than FY21's −7.

The full loop: cash goes out to suppliers and production on day 0; stock waits 17 days to sell; customers pay about 37 days after that; and suppliers themselves are paid at 58 days — netting out to the −3-day cycle.

In money terms: at FY26 sales of ₹2,007 Cr, each day of the cycle holds about ₹5.5 Cr — so the −3-day loop keeps roughly ₹−16.0 Cr sitting inside the business at any moment.

On the investment side: capital spending of ₹131 Cr over the last 3 fiscal years against ₹59.0 Cr of depreciation — the company is building well ahead of wear-and-tear. Capital work-in-progress stands at ₹55.0 Cr (FY26) — capacity paid for but not yet earning.

The synthesis: the cash is going into capacity, not disappearing into the cycle — the question becomes whether the new capacity earns.

Return on capital Return on capital employed (ROCE) is the profit the whole business earns on all the money in it — equity and debt together. It is the single best test of whether growth creates value or just size.

Swaraj Engines Ltd earns a ROCE of 58% in FY26. That is up from a trough of 32% in FY16. Return on invested capital clears the cost of that capital by +39.2 percentage points, so growth here adds value rather than only size. The wiring behind it is 9.8% net margin on 2.58× asset turns.

FY26 ROCE is 58%, recovered from a FY16 trough of 32% — the full ladder below shows the fall and the climb, undoctored.

Why the return is what it is — the wiring (FY26): 9.8% net margin × 2.58× asset turns × 1.59× balance-sheet leverage ≈ 40.2% on equity. Margin does its share; leverage is modest — this is an earned return, not a borrowed one.

The capstone test — ROIC − WACC: 51.2% − 12.0% = a +39.2 pp spread. The 12.0% is a standing assumption for the cost of capital in India, not a per-stock estimate — read the sign and the size of the spread, not the decimals. A spread this wide means every rupee reinvested creates more than a rupee of value — the engine compounds.

Debt Debt-to-equity says how much of the business is funded by borrowings. Low is the safe corner; the trend matters as much as the level.

Swaraj Engines Ltd carries total debt of ₹2.0 Cr against shareholder equity of ₹489 Cr as of Jun 26, a debt-to-equity of 0.00 — effectively unlevered. On the annual view that ratio went from 0.00 in FY23 to 0.00 in FY26. The returns elsewhere on this page are therefore earned rather than borrowed.

Jun 26: total debt of ₹2.0 Cr against shareholder equity of ₹489 Cr — a debt-to-equity of 0.00. On the annual view, debt-to-equity went from 0.00 (FY23) to 0.00 (FY26). The returns on this page are earned, not borrowed.

Ownership Who owns the stock, quarter by quarter: promoters (the controlling owners), foreign and domestic institutions, and the public. Steady accumulation by people close to the numbers is a signal; a quiet register is also an answer.

No holder of Swaraj Engines Ltd moved a full percentage point over the last two years — the register is quiet. Domestic institutions moved −0.1 points over the same window, to 8.8%. The register is read on the four disclosed classes only; nothing is inferred between filings.

The register over the last two years — Foreign institutions: −0.4 points over 8 quarters to 2.4%; Domestic institutions: −0.1 points over 8 quarters to 8.8%; Promoters: +0.0 points over 8 quarters to 52.1%.

Safety line The Z-score estimates how far a company sits from balance-sheet distress — above roughly 3 is safe, below roughly 1.8 is the danger zone. It was built for manufacturers, so it is not applied to banks and lenders.

Swaraj Engines Ltd: the Z-score is not available for this stock, so we say so rather than invent one. It is a distance-to-distress estimate from the balance sheet, not a forecast of failure. The debt, cash-flow and return sections above carry the balance-sheet evidence this page does hold, and each of them states its own reporting date.

The safety line in one sentence: the Z-score is not available for this stock, so we say so rather than invent one.

Valuation P/E is the price of ₹1 of annual profit: how many rupees the market pays for each rupee the company earns in a year.

Swaraj Engines Ltd trades at 21.3× P/E, mid-range by its own standards (42nd percentile). Its long-run median P/E is 22.3×, measured across 10.5 years of weekly readings. This places the multiple against the stock’s own record, and says nothing about what the business is worth.

Today's P/E of 21.3× is mid-range by its own standards (42nd percentile), against a long-run median of 22.3× measured over 10.5 years of weekly readings. This is a comparison against the stock's own history — not a claim about what it is worth.

Why the multiple sits where it does: over the past year annual EPS moved +18.2% against a −17.0% price move — earnings outran the price, pushing the multiple DOWN its own range.

The price move, decomposed: over 5y, of the +15.9%/yr price move, ~+11.5%/yr came from earnings growth and ~+4.4 pp from the multiple (expanding); over 10y, of the +11.4%/yr price move, ~+14.3%/yr came from earnings growth and ~−2.9 pp from the multiple (compressing). The split is the honest approximate (price return minus earnings growth); it makes the rally itself visible instead of hiding it behind the percentile.

Put together: the multiple is unremarkable against its own past, so the story rests on the earnings line underneath it, not the multiple.

What the price assumes This reading works the multiple backwards. It asks one question: what yearly rate of profit growth is a buyer at the market price already paying for? The number is the growth rate that makes eleven years of profit — six years growing, then five fading — add up to that day's market price, once each year is discounted at 11% a year.

Solved at its 27 August 2026 price, Swaraj Engines Ltd was paying for profit growth of about 11.8% a year. Profit itself has compounded 14.4% a year over the past 10 years. Today the market pays 21.3× P/E, the 42nd percentile of its own 11-year range.

What the two numbers say together. The multiple is unremarkable against its own past, and the growth the price is paying for is close to what this company has actually delivered.

How to hold this number: it is a reading of one day's price, taken on 27 August 2026, not a running figure — every other number on this page, the multiple included, is read off the live quote as of 11 September 2026. A higher price is paying for more growth and a lower price for less, so it moves whenever the price does, and this page does not restate it between measurements.

Stage: Consistent Every business sits somewhere on a fundamental arc, and this page names the spot before anything else. The last twelve quarters of revenue, profit and EPS growth — plus the return the business earns on its capital — are read as curves: Deteriorating (the curves are falling), Turning around (a trough has just formed and the last few quarters lift off it), Improving (the climb off the trough is sustained), Consistent (steadily positive with healthy returns), Topping out (still high but decelerating from the peak). When the curves genuinely disagree the read is Mixed; too little history is No read. CAGR (compound annual growth rate) is the smooth yearly pace that turns the starting value into the latest one — the fairest way to compare growth across different time spans. Read the columns together: if the 1-year number towers over the 10-year, recent growth is running hotter than the long-run trend. A dash means that window is not held, or the base year was a loss (where a growth rate is not meaningful).

Swaraj Engines Ltd reads as consistent on its fundamental arc. Consistent — revenue, profit and EPS growth have stayed positive through the window, with ROCE at 58.4% and holding. The read is built from 12 quarters across 4 curves, on full evidence.

Why it matters: steady curves with healthy returns are the compounding setup — the risk is the price, not the business.

4-Factor Sector Score

53.1/100 — rank 2 of 4 in Engines · 97% evidence confidence

Swaraj Engines Ltd scores 53.1 out of 100 against the 4 companies it is compared with in Engines, ranking 2. Balanced evidence: keep at normal research priority and require another comparable period before raising conviction.

The four contributions add to the total exactly: 21.7 + 18.1 + 12.6 + 0.7 = 53.1. This is the SAME number shown on the sector comparison — it is computed once, for the whole peer set, and read here.

What would change it: The read weakens if profit growth turns negative or margin improvement reverses while sector-relative strength deteriorates.

Frequently asked questions