Can HD Fire Protect IPO deliver long-term growth for high-risk investors?

ET Intelligence Group: HD Fire Protect, a fire protection equipment manufacturer, plans to raise ₹712 crore through an offer for sale. The promoter group's stake will fall to 85% after the IPO from 100%. The company manufactures fire protection equipment and systems, offering water, foam and gas-based fire suppression solutions. It has a strong portfolio of certified products and equipment, creating significant entry barriers in a highly regulated industry. Exports contribute over one-third to the revenue, with 15% coming from Middle East and 10% from Asia. The top 10 suppliers accounted for nearly half of total expenses, signalling concentration. Repeat customers contributed around 85% to FY26 revenue. Imported raw materials and contract-manufactured goods account for 37% of total expenses, exposing the company to input-cost inflation, currency fluctuations and supply-chain disruptions. Given these factors, investors with high-risk appetite may apply for long-term.

Business

Incorporated in 1997, HD Fire Protect offers a comprehensive portfolio across eight product categories, including sprinklers, alarm valves and accessories, deluge valves and systems, foam equipment and suppression systems, monitors and nozzles, water spray nozzles, custom-engineered systems and gas suppression systems. The company operates two manufacturing facilities in Jalgaon and Thane, Maharashtra. It exports products to over 90 countries. Order book surged to ₹134.4 crore in FY26 from ₹75.3 crore in FY24 and further increased to ₹158.6 crore as of June 30, 2026. According to Crisil, the company is the second-largest manufacturer of fire protection equipment and systems in India in terms of revenue and the largest exporter by value in FY25.

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Financials

Between FY24 and FY26, revenue from operations increased 14.5% annually to ₹489.3 crore and net profit rose 15.3% to ₹116.8 crore. Operating profit before interest, tax, depreciation and amortisation (Ebitda) jumped 18.8% to ₹150.5 crore during the same period. Ebitda margin was at 30.8% in FY26 from 31.9% in FY25 and 28.6% in FY24. Cash flow from operations grew 20.4% annually to ₹92.5 crore in FY26 from ₹63.8 crore in FY24. Return on equity increased to 30.2% in FY26 from 28.4% in FY24.

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Valuation

The company has no comparable listed peer. Considering the post-IPO equity and FY26 net profit, the company seeks price-earnings (P/E) multiple of 41, while based on annualised FY27 earnings, the P/E works out to 50. Other industrial engineering companies such as Kirloskar Pneumatic Company, Ingersoll-Rand (India), and KSB trade at P/E multiples of 34 to 50 based on FY26 earnings, while their annualised FY27 P/E multiples range from 21 to 60.