Narayana Murthy’s family office quietly bets Rs 290 crore on two zero-debt manufacturing stocks – Stock Insights News

The latest exchange filings for the quarter ending June 2026 show Catamaran Ventures entering two fresh names. The first is TD Power Systems, where it now holds 1.46% of the company, a stake worth close to Rs 262 cr as on 11^th July 2026. The second is Vardhman Special Steels, where it holds 1.02%, a far smaller position worth about Rs 28 cr.

The size gap is the first thing that stands out. One bet is nearly nine times bigger than the other. But look past the numbers and a common thread is very apparent. Both companies are export-oriented engineering and manufacturing plays, both run lean balance sheets, and both carry deep Japanese ties. That is exactly the kind of business Catamaran says it is hunting for today. Let us dig into each one.

#1 TD Power Systems: The Debt-Free Generator Maker That Doubled in a Year

Incorporated in 1999, TD Power Systems is a Bengaluru-based maker of AC generators and electric motors. Its machines sit inside steam, gas, hydro, wind and diesel power plants across the world. If a sugar mill, a steel plant or a biomass power unit needs a generator, there is a good chance TD Power built it.

With a market cap of Rs 17,969 cr, the company ships to more than 100 countries and runs subsidiaries in the United States, Europe, Turkey and Japan. It also carries a long manufacturing tie-up with Japan’s Toshiba group for large turbine generators. That export reach and precision-engineering base is the sort of profile Murthy’s office has openly said it wants to back.

Catamaran has said it is focused on export-led precision manufacturing and engineering firms in India. TD Power ticks that box cleanly. It makes a hard-to-copy product, it sells to demanding global buyers, and it is almost free of debt. Borrowings stood at just Rs 18 cr at the end of FY26 against reserves of more than Rs 1,000 cr. For an investor who prizes clean books and cash discipline, that is music to the ears.

Profit Velocity: Dissecting TD Power’s 40% CAGR Trajectory

The numbers here tell a story of a slow starter that suddenly found its stride. Sales have more than tripled in five years, and profit has grown even faster.

Those are strong figures. Sales jumped about 45% in FY26 alone to Rs 1,856 cr, while net profit climbed to Rs 239 cr. Margins have widened from single digits a few years ago to around 18% today. Return on capital employed sat at a little over 33% in FY26 and return on equity near 25%. Much of the recent surge comes from healthy demand for its large generators and motors, driven by fresh power projects, the steel industry and a broader factory building cycle. This is a business that has clearly moved up a gear.

Valuation Check: Is a 75x P/E Justified by a 2,775% Surge?

The market however already knows this story very well. The stock has more than doubled over the past year. Taking a longer-term view, the share price of TD Power was around Rs 40 in July 2021 and as of closing on 10^th July 2026 it was Rs 1,150, which is a 2,775% jump in 5 years.

As for the valuation, the share is trading at a PE of 75x against the current industry median of 38x. The 10-Year median PE for the company is 35x while the industry median for the same period is 40x.

One more point that deserves attention. Promoter holding has fallen sharply, from about 58% in early 2023 to 27% by June 2026, as the founding group sold down its stake. The good news is that the shares found willing buyers. Foreign investors now hold about 26% and domestic institutions about 24%. Into that mix has now stepped Catamaran, buying on weakness after the stock had cooled off from its 52-week high near Rs 1,380.

#2 Vardhman Special Steels: A debt-free Toyota supplier with a quiet profit engine

Incorporated in 2010, Vardhman Special Steels was carved out of the Vardhman group’s older steel business, which dates back to 1973. It is not a bulk steel maker. It makes special and alloy steel bars used to build engine and gearbox parts for cars, two-wheelers, tractors and bearings. In plain terms, this steel ends up deep inside the vehicles most Indians drive.

With a market cap of Rs 2,672 cr, the company’s biggest calling card is its partner. It works hand in hand with Aichi Steel, the steel arm of Japan’s Toyota group, and counts Toyota, Maruti Suzuki, Hyundai and Hero MotoCorp among the users of its metal. It also exports to buyers in Thailand, Turkey, Germany, Italy and Japan. Again, we see the export and precision-engineering theme that runs through both of Catamaran’s new picks.

There is a strong vote of confidence hiding in the share register. Around September 2025, Aichi Steel roughly doubled its stake in Vardhman to about 25%, up from around 11%. When a global partner puts that much more skin in the game, it usually means the technical relationship is deepening. For an investor like Murthy, who has spent a career building bridges with Japanese firms, that kind of long-term partnership is a familiar and comforting sign.

The Aichi Steel Catalyst: Behind Vardhman’s Record

The financials come with a twist. Vardhman is not growing its top line right now. Yet it just posted its best ever profit. Let us look at the standalone figures for a long term perspective.

Read the sales row carefully. Revenue has hovered around Rs 1,700 cr for four straight years, because steel prices have softened and volume gains have been modest. But look at FY26. Net profit jumped 31% to a record Rs 122 cr even as sales dipped slightly. The company squeezed more out of every tonne, helped by better efficiency, a new furnace, a fresh solar plant and lower interest costs.

It also turned fully debt-free during the year and raised its dividend to Rs 3.50 a share. This is profit growth earned through discipline, not through a booming market.

Valuation & Ownership: A Steady Compounder at 22x P/E

If TD Power is the expensive, fast-moving pick, Vardhman is the calmer, cheaper one. The share price of Vardhman Special Steels was about Rs 120 in July 2021 and as of closing on 10^th July 2026 it was Rs 276, which is a 130% jump in 5 years.

Regarding valuation, the share of Vardhman is trading at a PE of about 22x which is the same as the current industry median. The 10-Year median PE of the company however is 18, which is slightly lower that the industry median for the same period, which is 20x.

So, one is paying a normal, mid-market price for a debt-free, dividend-paying auto supplier with a marquee Japanese partner. Return on equity is modest at about 12%, and return on capital employed sits near 16%, so this is a steady compounder rather than a rocket.

Promoter holding stands at 51.06% as of June 2026. The drop from over 60% earlier was mostly because Aichi bought a large chunk of new shares, which is a healthy reason for the change rather than a worrying one. Catamaran’s own stake here, at about Rs 28 cr, is small. That tells you this is a starter position, a toe in the water, not a high-conviction bet.

The Execution Test: Evaluating Vardhman’s ₹2,600Cr Capex Bet

Vardhman has lined up a heavy capex plan of roughly Rs 2,600 cr over the coming years. This includes a Rs 475 cr forging plant and a much larger new steel plant of about 500,000 tonnes, targeted for completion by FY30.

Being debt-free gives it the room to fund all this. But a spend of that size, on a company this small, is a genuine execution test. If it goes to plan, volumes and profit could step up nicely. If it slips, shareholders may need to wait a good while longer for the payoff.

Momentum vs. Value – The Catamaran Portfolio

The two fresh picks by Murthy’s family office are in a striking contrast. TD Power is a momentum story running at full speed, expensive, and priced for a lot of good news. Vardhman is a value story ticking along quietly, cheaper, and priced for patience. One is a Rs 260 cr conviction position. The other is a possible Rs 28 cr trial. Two very different risk profiles, sitting under one roof.

Yet the logic that links them is clear. Both make precision products that the world’s engineers respect. Both sell abroad. Both keep debt low and reward shareholders. And both carry strong Japanese partnerships, a theme close to Murthy’s own history. This is not a punt on the next viral smallcap. It is a bet on the unglamorous suppliers that keep India’s factories and power plants running.

The takeaway here is possibly not to blindly copy a famous name. TD Power’s rich valuation and Vardhman’s flat sales are real risks worth watching. The smarter approach is to treat these filings as a starting point, study the businesses, and decide whether the patient, boring-backbone thesis suits your own goals. A sensible first step would be to add both names to a watchlist and track how they perform through the next few quarters.

Disclaimer:

Note: We have relied on data from http://www.Screener.in and http://www.trendlyne.com throughout this article. Only in cases where the data was not available, have we used an alternate, but widely used and accepted source of information.

The purpose of this article is only to share interesting charts, data points and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educative purposes only.

Suhel Khan has been a passionate follower of the markets for over a decade. During this period, he was an integral part of a leading Equity Research organisation based in Mumbai as the Head of Sales & Marketing. Presently, he is spending most of his time dissecting the investments and strategies of the Super Investors of India.

Disclosure: The writer and his dependents do not hold the stocks discussed in this article. The website managers, its employee(s), and contributors/writers/authors of articles have or may have an outstanding buy or sell position or holding in the securities, options on securities or other related investments of issuers and/or companies discussed therein.