Baheti Recycling Industries Limited

Sector n/a · NSE

₹284.00+₹3.10 (+1.10%)

DalalBaazaar Score

59 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Very High

Driven by high debt relative to equity, negative free cash flow, micro-cap size, which brings thin liquidity.

In simple words: Strong business and financial position, with both sales and profits growing well. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:01 pm

Understanding the Business

The 60-second version of Baheti Recycling Industries Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

How does it make money?

Turns over ₹725 Cr a year. Of every ₹100 of sales, about ₹4 reaches shareholders as profit, with ₹9 left at the operating level before interest, tax and depreciation.

What is its competitive advantage?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 49.1%. Returns that high normally get competed away; when they persist, something is protecting them. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +101% while net margin moved +154% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+101%

Margin effect+154%

DalalBaazaar Score

59/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ High leverage magnifies any downturn in earnings
✗ Profits have swung sharply from year to year — earnings are hard to forecast
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

66/ 100

Good

How good the business is, ignoring the share price entirely.

Valuation

60/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

vs. its own history

Not enough price and earnings history

vs. sector peers

Not enough peers with a usable P/E

vs. generic bands

No P/E available

EV/EBITDA

8.4x

PEG

—

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 3.6% to 8.7% over 3 years.
Return on equity is rising
ROE has improved from 15.3% to 28.9%.
Return on capital is rising
ROCE has improved from 28.5% to 49.1%.
High return on capital employed
ROCE of 49.1% is the mark of a business that converts capital into profit efficiently.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

5 items require attention · 5 high

🔴Debt has risen sharplyFinancial
Total debt is up 226% over 3 years, from ₹71 Cr to ₹232 Cr.
🔴High leverageFinancial
Debt/Equity of 2.47x — earnings must service borrowings before shareholders see anything.
🔴Free cash flow negative for 4 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🔴Inventory building faster than salesFinancial
Inventory up 322% against revenue up 101% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 49.1% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Margin expansion has further to run
EBITDA margin has risen from 3.6% to 8.7%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

The debt load needs earnings to hold up
Debt is 3.7x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.
Several serious flags at once
5 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 20% a year✓ 26.3% CAGR
Latest reported year was 38.3%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 7%✓ 8.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA falls below 3x✗ 3.7x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
4Free cash flow remains positive✗ -₹48 Cr
Profit that never becomes cash eventually stops being profit.
5Interest cover stays above 3x✗ 2.8x
How much operating profit can fall before interest stops being comfortably covered.

Investment Checklist

5 / 9 checks passed

✓ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

4 good · 5 neutral · 2 weak

Market Cap

₹297 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

Not available

No data

Source didn't return this field

P/B Ratio

Not available

No data

Source didn't return this field

EPS (TTM)

Not available

No data

Source didn't return this field

ROE

28.9%

Strong

Strong capital efficiency

ROCE

49.1%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

2.47x

High

High leverage

Revenue Growth (YoY)

38.3%

Healthy

Healthy top-line growth

Profit Growth (YoY)

50.3%

Healthy

Profits growing at a healthy clip

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹48 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Gross Margin

14.1%

Proxy

Operating margin unavailable — showing gross margin instead

Net Margin

3.7%

Average

Average bottom-line conversion

Current Ratio

1.28

Comfortable

Healthy short-term liquidity

Technical Snapshot

SMA 20 / SMA 50

738.1 / 780.3

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

32.9

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹360 Cr	₹429 Cr	₹524 Cr	₹725 Cr	+26.3%
EBITDA	₹13 Cr	₹20 Cr	₹40 Cr	₹63 Cr	+69.6%
EBITDA Margin	3.6%	4.7%	7.7%	8.7%	—
PAT (Net Profit)	₹5 Cr	₹7 Cr	₹18 Cr	₹27 Cr	+72.4%
EPS	₹6.81	₹6.94	—	—	—
ROE	15.3%	17.3%	30.5%	28.9%	—
ROCE	28.5%	36.2%	51.3%	49.1%	—
Total Debt	₹71 Cr	₹102 Cr	₹158 Cr	₹232 Cr	+48.2%
Free Cash Flow	-₹25 Cr	-₹21 Cr	-₹28 Cr	-₹48 Cr	—

🟢 Revenue has grown at 26.3% a year over 3 years.

🟢 EBITDA has grown at 69.6% a year over 3 years.

🟢 EBITDA Margin has risen from 3.6% to 8.7% over 3 years (+5.1 pts).

🟢 PAT (Net Profit) has grown at 72.4% a year over 3 years.

🟢 ROE has risen from 15.3% to 28.9% over 3 years (+13.5 pts).

🟢 ROCE has risen from 28.5% to 49.1% over 3 years (+20.6 pts).

🔴 Total Debt has grown at 48.2% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹376 Cr

Total Liabilities

₹283 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹36 Cr

Capex

-₹13 Cr

Recent News

1 positive1 mixed4 general

Baheti Recycling Board Approves NSE Mainboard Migration After ₹320 Cr Revenue Milestone

Sahi, 19 Jun

Baheti Recycling Industries Ltd. Key Financial Ratios – Valuation, Profitability & More

Value Research, 21 Sept

Baheti Recycling Industries Ltd. Share Price Near 52W High

Univest, 10 Aug

Baheti Recycling migrates to NSE, BSE mainboard

scanx.trade, 18 Jun

Baheti Recycling unlocks new growth phase with aluminium wire rod and OEM expansion

AL Circle, 14 MayCapacity

🟡Mixed / dependsCapacity additions can raise revenue over two to three years, but the capital spend usually pressures free cash flow first. Worth checking whether the capex is funded from operations or from borrowing.

Baheti Recycling FY26 Profit Jumps 50% and adds capacity for margin-accretive products

Business Standard, 01 MayResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
Sector/industry classification unavailable — verify manually for peer comparison.
3 metrics couldn't be retrieved for this stock — this is more common for smaller or thinly-covered listings.

DalalBaazaar Thesis

StrongGrowth · Profitability

MiddlingBusiness Quality · Valuation

WeakFinancial Health · Risk

Points for each in the Score ↑

Good business at a fair price

A sound business at a reasonable valuation. Suitable for a long-term holding, with the valuation and the direction of margins worth watching rather than the business itself. 5 high-severity red flags sit above this conclusion and should be read first.

3 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Free cash flow remains positive; Interest cover stays above 3x · see Key things to watch ↑