Aaron Industries Ltd- The Elevator Play

Aaron Industries is primarily engaged in the manufacturing activities of Elevator doors and parts, and trading in Electrical products (negligible quantity). The Company has also started new business line of polishing, processing, designing and finishing of Stainless Steel Sheets as backward integration. In the FY 2021, elevator segment contributed 64% of the revenue whereas polished steel segment contributed 31% of revenue.

The company is led by first generation entrepreneurs [I have a bias towards first generation entrepreneurs] and has been growing at a very fast pace with decent profitability. This picture will give the financial of the company for last few years [Trendlyne].

Points to note in financial:

  1. Topline is continuously growing.

  2. With growth in topline, even OPM and EBITDA is improving.

  3. The company is in profit and paying due taxes.

  4. Debt is under control.

The company is already in manufacturing various elevator parts like cabins, machines, control panels, autodoors, COP and LOP etc. It is possible that the company may move in manufacturing complete elevators. In fact, the company states in Annual report 2021- “The company is engaged in manufacturing of elevators and elevator parts”. The annual report is also claiming “premium elevators” as its product. It is possible that the company may enter into the elevator market, sooner than later [my guess].

An elevator business is a lucrative business. None of the elevator manufacturers are listed. Thus, Aaron is the only listed elevator play.

The elevator industry is transforming in India. It is no more a discretionary luxury expenditure. In new constructions, it has become more like a necessity. People are preferring elevators even in 3-4 stories bungalows. India is already second-largest market for elevators and escalators. Thus, it is expected that the elevator industry will grow at a much faster pace than the normal economy. This will give a tailwind to this business.

Presently the company is valued at around 120 crores market capitalization. Though it is a nano-cap, by no standard it is cheap. It is trading at 9 times book value and at around 46 p/e. Promoters hold 75% of the equity, and in last year they have increased their holding from 73.5%.

Basis of Investment:

There is only one basis of investment in the company- it is fast growing small company, which is growing without much debt infusion and with decent profitability. If such growth continues for a few more years, it can prove to be a decent investment.


  1. Investment in nano caps can lead to 100% capital loss.

  2. The company is richly valued.

[Disclosure: Invested, plan to add more]


Thanks for the write-up. Please correct me if I am wrong. They made a net profit of 192 Lakh last year and Mr.Amar Chinubhai Doshi & Mr.Karan Amar Doshi together took approx 47 Lakh salary.

I have a few questions also please let me know if you have an answer for it

  1. Do you know the number of employees in the company and the average salary of employees - Wanted to know any moat in the business or any patent they have filed
  2. They issued 52,61,114 shares last year do you know the price at which they subscribed
  3. Who are their competitors in the market?
  4. How much % is the promoter holding
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That is correct. Directors’ salary is a matter of record and looks disproportionate to the profit earned by the company.
Last year they issued bonus shares in the ratio of 10:11, the record date was 04.09.2020. Probably bonus shares were issued to make equity capital of Rs. 10 crores, to shift to the mainboard.
Promoters holding is 75%.
Some of the players in the Indian Elevators Market include

  • KONE Elevator India Private Limited
  • Johnson Lifts India Private Limited
  • Schindler India Pvt Ltd
  • OTIS Elevator Company (India) Ltd
  • ThyssenKrupp Elevator (India) Pvt Ltd
  • Mitsubishi Elevator India Pvt Ltd
  • Fujitec India Pvt Ltd
  • Escon Pvt Ltd
  • Hitachi Lift India Pvt Ltd
  • Blue Star Elevator Pvt Ltd
  • Express Lift Ltd
  • Omega Elevators
  • Eros Elevators Pvt Ltd
  • Orbis Elevators Co Ltd
  • Supreme Elevators & Company

None of these are listed.
Now almost all the major international players have a presence in India. Overall, five firms control two-thirds of the global market: Schindler of Switzerland, Kone of Finland, Thyssenkrupp of Germany, Otis- part of America’s United Technologies; and Mitsubishi of Japan.
Lately, small buildings, hotels, hospitals have started installing elevators. Sometime back even DDA permitted the installation of elevators in DDA flats in Delhi. This has given an opportunity to small players in the market, and cost-effectiveness becomes an important factor in this market. On an estimate, approximately 40% market is there with unorganized players.
Though long-term estimate of the elevator market is positive, for the last 2 years the elevator industry is struggling due to a slowdown in real estate and covid. Even in this situation, a small player like Aaron is publishing good results with decent profitability. With the balance sheet, the management looks efficient. I cannot find any specific moat with the company in the form of trademark, patent etc.


Aaron Industry has come out with a good set of numbers for Q3-2022. Revenue is up by almost 50% and NP is up by almost 70%, over the corresponding quarter last year. For 9 month period in 2022, the revenue is almost the same as last year whereas the net profit for the 9 months has already surpassed last year’s profit by a good margin.
Aaron Industry.pdf (3.9 MB)


Aaron Industry has come out with excellent result in FY 2022. The topline has gone up to 37 crores as compared to 24 Crores in FY 2021. OPM has gone up to 15%, thereby net profit has doubled. EPS has gone up to Rs. 3.70, and thus we may expect some dividend too. Last year it paid 6% dividend.
AARON_2022.pdf (2.7 MB)


Sir why do you feel company has gone into steel polishing, where they are incurring a loss of almost 4.5 Cr, wouldn’t it have been better if they kept outsourcing SS sheets?
And will this segment be ever standalone profitable or is it just to ensure supply security of SS sheets.
Sir do you have knowledge on any pipeline or orderbook they have for fy23
And how much is client concentration risk


Aaron has come out with Q1- 2023 results. The topline has gone up by more than 100%, profit has almost tripled as compared to last year.
AARON_30072022111654_FR_Advt_30072022.pdf (3.0 MB)


It has blasted in last 2 days, up by almost 50%. Have not been able to find any news.


There is some issues pending with Tax Authorities. They mentioned that those issues are not big. But its sign of incompetent management, Corporate governance?


Aaron has come out with excellent results… topline and bottom-line have gone up by almost 50%. On half-yearly basis, topline has gone up to 26 crores with net profit of 3.5 crores.
AARON_12112022115806_FR_30092022.pdf (3.1 MB)


The company has come out with excellent Q3 results- almost 40% above the corresponding last year Q3. 9M topline and bottom-line is higher than full year 2021-22. EPS for 9M period is Rs. 3.72, the company is well on its way to Rs. 5 EPS for the full year.
Financial_Results_31122022_24012023120926.pdf (2.2 MB)


The topline and bottom-line since last 3 quarters is stagnant. Also, losses in steel polishing segment have been increased exponentially.
Overall, good numbers y-o-y basis, however muted on q-o-q basis

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Historically December Quarter has been weak, and revenue has remained less than the September quarter. Thus, the figures do look subdued quarter on quarter. Though I don’t understand the reason for such seasonality. Revenue jump has been seen in March amd September quarter only.

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Any views why steel polishing division is generating such huge losses, every q-on-q

Not much information has been provided by the Management on steel polishing business, however can be seen that highest amount of capital has been employed in this segment, and the segment is continuously in loss.

Steel polishing is the backward integration of the primary business of elevator doors and cabins. Chairman says in AR 2021-22,
“Further, by New Product Development in our Kosamba Unit, operations will
play a major role towards our growth in the Steel polishing segment. During the Year, we have witnessed a healthy growth in this segment and reported revenue of Rs. 900.33 lakhs as against Rs. 769.59 lakhs of the previous year, an increase of 16.99%. This unit also helped us in the supply of SS sheet which is used as raw material of primary products i.e. Elevator doors and cabins. That largely reduced our dependency on external providers.”
Polished steel is a commodity, and lately there has been steep decline in steel prices. It may be a reason of loss in the segment. I am not sure how internal segment-wise accounting is being done by the company, primarily, at what prices polished steel is transferred from this segment to elevator segment. If it is done cost basis, the segment will show losses due to higher depreciation/interest in the segment. But certainly, we need to ask this question from the management.


Aaron has come out with great results- the topline has gone up to 56 crores, with an NP of 5.4 crores. Net cash from operating activity has been healthy 4 crores. On eps of Rs. 5.37, the company has declared a dividend of Rs. 1 per share.
BR_Outcome_15052023_15052023124433.pdf (6.2 MB)


Have they done any capex on elevator division?
Earlier capacity utilisation was already 100% so where is this increase in sales coming?

Yes, as per latest results the assets value in elevator segment have been increased from 5.83cr (FY 22) to 10.37cr (FY23).

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Aaron Industry is issuing, approximately 4.5 lakh shares, preferential shares to promoters and non-promoters at the rate of Rs. 235 per share. Promoters already hold 74.97% of shares as reported at the end of June 2023.
AARON_05082023141519_PreferentialIssue_05082023.pdf (847.3 KB)


Aaron is setting up a new unit for future growth.
AARON_13102023130449_NewUnit_13102023.pdf (764.3 KB)