The recent pullback must have dismayed HBL Engineering Limited (NSE:HBLENGINE) insiders who own 61% of the company

Key Insights

• Insiders appear to have a vested interest in HBL Engineering's growth, as seen by their sizeable ownership
• The largest shareholder of the company is Kavita Aluru with a 55% stake
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

If you want to know who really controls HBL Engineering Limited (NSE:HBLENGINE), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are individual insiders with 61% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And following last week's 9.5% decline in share price, insiders suffered the most losses.

Let's take a closer look to see what the different types of shareholders can tell us about HBL Engineering.

Check out our latest analysis for HBL Engineering

What Does The Institutional Ownership Tell Us About HBL Engineering?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

Institutions have a very small stake in HBL Engineering. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

Hedge funds don't have many shares in HBL Engineering. Kavita Aluru is currently the largest shareholder, with 55% of shares outstanding. This implies that they have majority interest control of the future of the company. With 1.4% and 1.4% of the shares outstanding respectively, The Vanguard Group, Inc. and Advay Mikkilineni are the second and third largest shareholders. In addition, we found that Aluru Prasad, the CEO has 1.0% of the shares allocated to their name.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of HBL Engineering

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our most recent data indicates that insiders own the majority of HBL Engineering Limited. This means they can collectively make decisions for the company. Given it has a market cap of ₹120b, that means insiders have a whopping ₹74b worth of shares in their own names. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if they have been selling down their stake.

General Public Ownership

The general public-- including retail investors -- own 35% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand HBL Engineering better, we need to consider many other factors.

I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow, for free.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.