Over the last few weeks, I’ve been diving deep into a company that most overlook — Indo Farm Equipment Ltd. Deep Dive Below 👇👇

What started as a surface-level check turned into a full-blown rabbit hole of numbers, narratives, and management calls. And somewhere along the line, the story began to make sense.

Let me walk you through it.

In FY25, the company closed with ₹387 Cr revenue and ₹24 Cr PAT. Nothing mind-blowing at first glance. But the mix tells a different story.

- Tractor contribution is now second fiddle.

Crane business has overtaken tractors, rising from 44.6% in FY24 to 58.1% in FY25.

Higher margins, better visibility, less seasonality.

Management now guides for ₹500 Cr revenue in FY26 with PAT margins improving to 6.5%. Why?

Higher mix of cranes (which are higher-margin)

Reduction in finance cost due to debt repayment using IPO funds (₹50 Cr allocated to debt)

₹40–₹50 Cr contribution expected from the new plant in Q4 FY26

PAT is expected to jump to ₹32.5 Cr, a +35.5% growth. EPS? Moves up to ₹6.76.

That’s not the end.

FY27 is where the bet compounds.

A full year of the new construction equipment plant at Baddi. Operational leverage kicks in.

Management sees potential to scale to ₹750–800 Cr in revenue.

I conservatively worked with two scenarios:

Base case: ₹700 Cr revenue, 7.5% PAT margin

PAT: ₹52.5 Cr → EPS: ₹10.91

Bull case: ₹800 Cr revenue, 8.5% PAT margin

PAT: ₹68 Cr → EPS: ₹14.14

The bull case assumes:

- Full ramp-up of new plant

- Higher productivity in crane division

Possible kicker from tower cranes (not yet priced in)

At today’s market cap of ₹1,072 Cr, here's how the forward valuation stacks up:

- FY26: P/E 33X, PEG ~1.1X

- FY27 Base Case: P/E 20.4X, PEG ~0.64X

- FY27 Bull Case: P/E 15.8X, PEG ~0.36X

Yes, the current trailing P/E is rich. But if even the base case plays out — the PEG makes a compelling case.

The key insight for me was this:

"Re-rating isn’t always driven by topline explosions. Sometimes, it's margin expansion, mix improvement, and the silent shift in narrative."

And Indo Farm’s story seems to be shifting — from a tractor company to a construction equipment player with optionality.

Let’s see how it unfolds. This isn't a stock reco.