# **TEMPSENS INSTRUMENTS (INDIA) LIMITED (TIIL)** # **Comprehensive IPO Equity Research & Fundamental Analysis Report** **Listing Exchanges**: BSE & NSE (Mainboard) **Date of Report**: August 19, 2026 ## **1\. Executive Summary & Investment Thesis** Company Overview Tempsens Instruments (India) Limited (TIIL), headquartered in Udaipur, Rajasthan, is one of India's premier precision thermal engineering and industrial temperature sensing solution providers. The company designs, engineers, and manufactures contact temperature sensors (thermocouples, RTDs), non-contact pyrometers, thermal imaging cameras, industrial heating systems, specialized cables, and calibration furnaces. It operates global manufacturing and technical subsidiaries in Germany (Tempsens GmbH) and Poland, serving over 3,800 institutional B2B customers worldwide. **Core Investment Thesis** * **High-Barrier Mission-Critical Engineering Moat**: Temperature sensors and thermal control systems are critical components in process industries (steel, petrochemicals, semiconductors, aerospace, glass, pharmaceuticals), where failure leads to plant shutdowns. TIIL's testing infrastructure and NABL/DAkkS accreditations create substantial customer switching costs. * **Balanced Revenue Model with Sticky MRO Annuity**: Derives 32.45% of revenue from recurring Maintenance, Repair, and Operations (MRO) replacement demand alongside 67.55% from capital expenditure Projects/OEM equipment supply. * **Consistent Double-Digit Financial Compounding**: Consolidated revenue from operations expanded from ₹274.81 Cr in FY24 to ₹444.88 Cr in FY26 (+27.2% CAGR), operating EBITDA expanded to ₹105.80 Cr (23.78% margin, \+35.2% CAGR), and PAT grew to ₹71.07 Cr (+31.8% CAGR). * **Pristine Balance Sheet & Strong Return Ratios**: Maintains a conservative Debt-to-Equity ratio of 0.20x, generating a Return on Capital Employed (ROCE) of 19.34% and Return on Equity (ROE) of 22.56%. **Valuation & Outlook** Priced at a post-issue FY26 P/E of **35.4x to 37.3x** (Market Cap: \~₹3,070 Cr at ₹300/share) and EV/EBITDA of 25.64x, representing an attractive entry relative to global industrial automation peers listed in India (Honeywell Automation at 65x, Siemens at 75x, ABB India at 85x). **Core Investment Risks** Heavy Offer for Sale (OFS) proportion (85.4% of total issue size); working capital elongation (inventory days of 92 days, receivable days of 70 days); and foreign currency exposure across European subsidiaries. ## **2\. Issue Structure & Deal Parameters** | Parameter | Details / Metrics | | :---- | :---- | | **Issuer** | Tempsens Instruments (India) Limited (TIIL) | | **Issue Structure** | Mainboard Book Built Issue (BSE & NSE) | | **Total Issue Size** | ₹650.00 Crore (2,16,66,667 Equity Shares at ₹300) | | **Fresh Issue** | ₹95.00 Crore (31,66,667 Equity Shares) | | **Offer for Sale (OFS)** | ₹555.00 Crore (1,85,00,000 Equity Shares) | | **Price Band** | ₹285.00 – ₹300.00 per equity share (Face Value: ₹4.00) | | **Lot Size** | 50 Equity Shares (Min Retail Application: ₹15,000) | | **Anchor Bidding Date** | August 19, 2026 | | **Subscription Period** | August 20, 2026 – August 24, 2026 | | **Basis of Allotment** | August 25, 2026 | | **Tentative Listing Date** | August 28, 2026 | | **Post-Issue Market Cap** | ₹3,069.98 Crore (\~₹3,070 Cr at upper price band) | | **Book Running Lead Managers** | ICICI Securities Limited, JM Financial Limited | | **Registrar** | KFin Technologies Limited | | **Promoter Holding** | Pre-IPO: 80.51% / Post-IPO: 65.67% | | **Issue Reservation** | QIB: 50% / NII/HNI: 15% / Retail: 35% | **Objects of the Fresh Issue (Net Proceeds: ₹95.00 Cr)** 1. **Capital Expenditure for Manufacturing & Testing Facility Expansion**: \~₹60.00 Crore for installing automated sensor assembly lines, vacuum furnaces, and precision testing labs in India and Germany. 2. **Prepayment / Repayment of Certain Borrowings**: \~₹15.00 Crore. 3. **General Corporate Purposes**: \~₹20.00 Crore. ## **3\. Business Model, Technological Capabilities & Competitive Moat** **Product Architecture** * **Contact Sensors**: Industrial thermocouples (operating up to 2,000°C), Resistance Temperature Detectors (RTDs), thermowells, and mineral-insulated (MI) cables. * **Non-Contact Measurement**: Infrared pyrometers, thermal imaging cameras, blackbody calibration sources. * **Heating & Industrial Solutions**: Ceramic and tubular heaters, furnace heating elements, temperature calibration baths. * **Specialty Cables & Wires**: High-temperature fiberglass, PTFE, and silicone-insulated instrumentation cables. **Global Footprint & European Integration** TIIL operates manufacturing plants in Udaipur (India) alongside advanced facilities in Germany (Tempsens GmbH) and distribution in Poland, enabling high-spec penetration into European machinery OEMs. **Customer Diversification** The company maintains an exceptionally fragmented customer base of 3,800+ clients across 70+ countries. Top 10 customers contribute only 18.59% of FY26 revenue, insulating TIIL from single-client concentration shocks. ## **4\. Financial Statement Analysis (3-Year Restated Financials)** *Values in ₹ Crore unless otherwise stated* | Financial Metric | FY24 (Audited) | FY25 (Audited) | FY26 (Audited) | 2-Yr Growth / CAGR | | :---- | :---- | :---- | :---- | :---- | | **Revenue from Operations** | ₹274.81 | ₹378.53 | ₹444.88 | \+27.23% CAGR | | **Total Income** | ₹279.40 | ₹384.20 | ₹452.10 | \+27.21% CAGR | | **Cost of Materials Consumed** | ₹128.60 | ₹174.10 | ₹204.20 | \- | | **Employee Benefits Expense** | ₹46.80 | ₹61.20 | ₹74.50 | \- | | **Operating EBITDA** | ₹60.20 | ₹87.40 | ₹105.80 | \+32.55% CAGR | | **EBITDA Margin (%)** | 21.91% | 23.09% | 23.78% | \+187 bps expansion | | **Finance Costs** | ₹4.20 | ₹5.10 | ₹4.80 | Low interest burden | | **Depreciation & Amortization** | ₹7.80 | ₹10.40 | ₹12.90 | \- | | **Profit Before Tax (PBT)** | ₹53.40 | ₹79.20 | ₹95.10 | \+33.43% CAGR | | **Profit After Tax (PAT)** | ₹40.92 | ₹62.55 | ₹71.07 | \+31.78% CAGR | | **PAT Margin (%)** | 14.89% | 16.52% | 15.98% | Healthy net margin | | **Net Worth / Equity** | ₹185.20 | ₹245.80 | ₹315.10 | \+30.43% CAGR | | **Total Debt / Borrowings** | ₹58.40 | ₹68.20 | ₹63.50 | Debt/Equity: 0.20x | | **Return on Net Worth (ROE)** | 22.09% | 25.45% | 22.56% | Sustained \>20% return | | **ROCE (%)** | 17.80% | 19.80% | 19.34% | High capital efficiency | | **Diluted EPS (₹)** | ₹4.85 | ₹7.25 | ₹8.25 | \+30.42% CAGR | ## **5\. Peer Benchmarking & Valuation Analysis** | Company Name | Core Specialization | Market Cap (₹ Cr) | FY26 Revenue (₹ Cr) | EBITDA Margin (%) | Post-Issue P/E (x) | EV/EBITDA (x) | ROE (%) | | :---- | :---- | :---- | :---- | :---- | :---- | :---- | :---- | | **Tempsens Instruments** | **Thermal Sensors** | **₹3,070** | **₹444.88** | **23.78%** | **35.4x – 37.3x** | **25.6x** | **22.56%** | | Honeywell Automation | Process Automation | ₹45,200 | ₹4,120.00 | 14.80% | 64.80x | 46.2x | 16.20% | | Siemens Limited India | Energy & Automation | ₹2,45,000 | ₹21,800.00 | 12.90% | 76.40x | 52.1x | 17.80% | | ABB India Limited | Electrification | ₹1,82,000 | ₹12,600.00 | 16.20% | 84.50x | 59.4x | 23.10% | | Kaynes Technology | Integrated Electronics | ₹32,400 | ₹2,650.00 | 14.20% | 94.20x | 62.0x | 18.50% | **Valuation Synthesis** * At the upper price band of ₹300, Tempsens commands an equity valuation of ₹3,070 Crore and an EV of ₹3,090 Crore. * Implied post-issue P/E of **35.4x–37.3x** FY26 earnings offers a significant \~45–55% valuation discount compared to Indian multinational automation conglomerates (Honeywell at 65x, Siemens at 76x), despite TIIL delivering higher EBITDA margins (23.78% vs 13–15%). * The valuation multiple is supported by an expanding international footprint, non-cyclical MRO annuity stream, and high return on capital. ## **6\. Scenario Analysis & 12-Month Target Price Projections** **Bull Case (Target Price: ₹420 – ₹450 | \+40% to \+50%)** * European manufacturing integration accelerates OEM export contracts by 30%+. * MRO share rises to 35%+, expanding EBITDA margins toward 25.0%; FY27 PAT reaches ₹95+ Cr. * Market re-rates multiple toward 45–48x P/E in line with precision engineering benchmarks. **Base Case (Target Price: ₹350 – ₹380 | \+17% to \+27%)** * Revenue grows at 18–22% CAGR; net margin sustains around 15.5–16.0%. * P/E trades in the 36–39x range on FY27 estimated EPS of \~₹9.8–₹10.2. **Bear Case (Target Price: ₹245 – ₹265 | \-12% to \-18%)** * Capex slowdown in core domestic heavy manufacturing sectors (steel/power) delays new project orders. * Working capital stretch elongates cash conversion cycle; multiple de-rates to 28–30x. ## **7\. Key Investment Risks & CFA Compliance Disclosures** 1. **High OFS Component**: OFS constitutes 85.4% of total issue size (₹555 Cr out of ₹650 Cr), resulting in limited fresh capital entering company reserves. 2. **Working Capital Intensity**: Inventory days at 92 days and trade receivables at 70 days require active working capital governance to sustain positive free cash flows. 3. **Noble Metal Price Fluctuations**: Platinum, rhodium, and nickel price volatility impacts input costs for thermocouples and RTD elements. 4. **Geopolitical & Currency Risk**: European operations expose earnings to Euro/INR currency conversion dynamics and EU industrial growth trends. **Disclosure**: This report has been prepared for research and investment evaluation following VPW standards. Valuation projections and scenario targets represent probabilistic financial models based on RHP data and peer market multiples. Past financial performance does not guarantee future market returns.