Hindustan Hardy Valuation Shifts Signal Changing Price Attractiveness in Auto Components Sector

Nov 19 2025 08:00 AM IST

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Hindustan Hardy, a key player in the Auto Components & Equipments sector, has undergone a notable adjustment in its valuation parameters, reflecting a shift in price attractiveness. The company’s price-to-earnings (P/E) ratio currently stands at 16.20, accompanied by a price-to-book value (P/BV) of 4.17, positioning it within a fair valuation range compared to its historical and peer averages. This change follows a revision in its evaluation on 19 Nov 2025, signalling a recalibration in how the market perceives its pricing relative to earnings and book value metrics.

Examining Hindustan Hardy’s valuation in the context of its industry peers reveals a nuanced landscape. While some competitors such as Rico Auto Industries and Alicon Castalloy exhibit higher P/E ratios of 34.77 and 41.69 respectively, and are classified as attractive, Hindustan Hardy’s current P/E suggests a more moderate valuation stance. Its EV to EBITDA ratio of 11.80 also aligns closely with sector averages, indicating a balanced enterprise value relative to earnings before interest, tax, depreciation, and amortisation. The company’s PEG ratio of 0.23 further provides insight into its valuation relative to earnings growth, contrasting with higher PEG figures seen in some peers.

From a market performance perspective, Hindustan Hardy’s stock price has experienced a decline of 3.62% on the day, with the current price at ₹948.95, down from the previous close of ₹984.55. The stock’s 52-week trading range spans from ₹601.05 to ₹1,350.00, reflecting considerable volatility over the past year. When compared to the broader Sensex index, which has recorded returns of 8.36% year-to-date and 9.48% over the last year, Hindustan Hardy’s stock has shown a contrasting return profile, with a year-to-date return of -4.84% and a one-year return of -1.90%. However, over longer horizons, the stock has demonstrated significant appreciation, with three-year and five-year returns of 323.54% and 1,224.42% respectively, substantially outpacing the Sensex’s corresponding returns of 37.31% and 91.65%.

Financially, Hindustan Hardy maintains robust operational metrics. Its return on capital employed (ROCE) is reported at 28.98%, while return on equity (ROE) stands at 25.77%, both indicative of efficient capital utilisation and profitability. Dividend yield remains modest at 0.30%, consistent with the company’s reinvestment and growth focus. Enterprise value to capital employed and sales ratios of 3.82 and 1.51 respectively further contextualise the company’s valuation relative to its asset base and revenue generation.

In summary, the adjustment in Hindustan Hardy’s valuation parameters reflects a recalibrated market perspective on its price attractiveness relative to earnings and book value. While the stock’s short-term returns have lagged behind the Sensex, its long-term performance remains noteworthy. Investors analysing the Auto Components & Equipments sector may find value in considering these valuation shifts alongside operational metrics and peer comparisons to inform their investment decisions.

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