Eco Recycling Limited

Industrials — Waste Management · NSE

₹413.50+₹7.05 (+1.73%)

DalalBaazaar Score

70 / 100

🟢 Good

Verdict

REASONABLE

Risk

High

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

In simple words: Strong business and financial position, with modest growth. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:08 pm

Mixed / neutral. No major red flags jump out, but nothing here screams "obviously cheap" either. This is a name that needs a peer comparison and a view on near-term earnings triggers before sizing a position.

Understanding the Business

Company site ↗

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

What does this company do?

Eco Recycling Limited operates as an e-waste management company in India. It is involved in the recycling of waste electrical and electronic equipment, as well as extract materials, such as copper, aluminum, silver, and gold from complex electronic scrap.

IndustryWaste Management

SectorIndustrials

Employees55

Annual revenue₹48 Cr

How does it make money?

Turns over ₹48 Cr a year. Of every ₹100 of sales, about ₹48 reaches shareholders as profit, with ₹73 left at the operating level before interest, tax and depreciation. Each of its 55 employees supports ₹87.6 lakh of revenue a year, the signature of a people-led business.

EBITDA margin72.8%

Net margin48.0%

Revenue / employee₹87.6 lakh

Who are its competitors?

The closest listed comparisons in its industry are LARSEN & TOUBRO LTD., SIEMENS LTD, ABB INDIA LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

LARSEN & TOUBRO LTD.P/E 30.1x · ROE 15.2%

SIEMENS LTDP/E 88.8x · ROE 10.5%

ABB INDIA LIMITEDP/E 92.6x · ROE 19.1%

What is its competitive advantage?Some evidence

ROCE of 26.7% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

ROCE26.7%

ROE20.9%

Peer median ROE15.2%

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +172% while net margin moved +37% 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+172%

Margin effect+37%

DalalBaazaar Score

70/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Beta of 1.26 — amplifies market moves in both directions
✗ 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

Quality vs. Valuation

Company Quality

84/ 100

Excellent

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

Valuation

66/ 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.

Historical Valuation

Current P/E

33.5x

Sector Median

88.8x

median of 3 sector peers

🟢Against its sector it trades 62% below the peer median of 88.8x.

vs. its own history

Not enough price and earnings history

vs. sector peers

Cheap

88.8x median of 3 peers · -62%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

33.5x

P/B

7.43x

EV/EBITDA

22.5x

PEG

0.61

Dividend Yield

0.24%

What's Good / What's Bad

🟢 What's Going Well6

Margins are improving
EBITDA margin is up from 38.3% to 72.8% over 3 years.
Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
Return on equity is rising
ROE has improved from 13.5% to 20.9%.
Return on capital is rising
ROCE has improved from 13.5% to 26.7%.
High return on capital employed
ROCE of 26.7% 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 Attention3

Debt is rising
Total debt is up 115% over 3 years — worth checking what it funded.
Receivables growing faster than sales
Receivables are up 540% against revenue growth of 172% — customers are taking longer to pay.
Inventory building faster than sales
Inventory is up 276% against revenue growth of 172% — stock may not be moving.

Red Flags

4 items require attention · 4 high

🔴Debt has risen sharplyFinancial
Total debt is up 115% over 3 years, from ₹2 Cr to ₹5 Cr.
🔴High leverageFinancial
Debt/Equity of 5.22x — earnings must service borrowings before shareholders see anything.
🔴Receivables growing faster than salesFinancial
Receivables up 540% against revenue up 172% — sales are being booked faster than they are collected.
🔴Inventory building faster than salesFinancial
Inventory up 276% against revenue up 172% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 26.7% 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 38.3% to 72.8%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Cheaper than its peers
It trades 62% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
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?

Leverage amplifies any setback
Debt/Equity of 5.22x. Interest is payable whether or not the business has a good year.
Sales are being booked faster than collected
Receivables are up 540% against revenue up 172%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
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
4 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 30% a year✓ 39.5% CAGR
Latest reported year was 40.5%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 71%✓ 72.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✓ ₹12 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.1x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 24%✓ 26.7%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

9 / 10 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
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high

Price history

Quick Metrics

5 good · 4 neutral · 2 weak

Market Cap

₹798 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

33.5x

Fair

Fairly valued against the generic band

P/B Ratio

7.43x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹12.33

Profitable

Profitable on a per-share basis

ROE

20.9%

Strong

Strong capital efficiency

ROCE

26.7%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

5.22x

High

High leverage

Revenue Growth (YoY)

40.5%

Healthy

Healthy top-line growth

Profit Growth (YoY)

7.2%

Modest

Slow profit growth

Dividend Yield

0.24%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹12 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹413.5

Operating Margin

60.0%

Good

Healthy core-business profitability

Net Margin

41.1%

Good

Strong bottom-line conversion

Current Ratio

4.52

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

1.26

Market-like

Moves roughly in line with the market

52W Range Position

26%

Mid-range

Technical Snapshot

RSI (14)

48.5

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹18 Cr	₹28 Cr	₹44 Cr	₹48 Cr	+39.5%
EBITDA	₹7 Cr	₹17 Cr	₹33 Cr	₹35 Cr	+72.9%
EBITDA Margin	38.3%	60.1%	74.0%	72.8%	—
PAT (Net Profit)	₹6 Cr	₹18 Cr	₹23 Cr	₹23 Cr	+55.1%
EPS	₹3.21	₹9.44	₹12.12	₹11.87	+54.6%
ROE	13.5%	27.1%	26.6%	20.9%	—
ROCE	13.5%	30.7%	33.6%	26.7%	—
Total Debt	₹2 Cr	₹5 Cr	₹6 Cr	₹5 Cr	+29.0%
Free Cash Flow	-₹5 Cr	-₹5 Cr	-₹4 Cr	₹12 Cr	—

🟢 Revenue has grown at 39.5% a year over 3 years.

🟢 EBITDA has grown at 72.9% a year over 3 years.

🟢 EBITDA Margin has risen from 38.3% to 72.8% over 3 years (+34.5 pts).

🟢 PAT (Net Profit) has grown at 55.1% a year over 3 years.

🟢 EPS has grown at 54.6% a year over 3 years.

🟢 ROE has risen from 13.5% to 20.9% over 3 years (+7.4 pts).

🟢 ROCE has risen from 13.5% to 26.7% over 3 years (+13.2 pts).

🔴 Total Debt has grown at 29.0% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹5 Cr to ₹12 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹135 Cr

Total Liabilities

₹23 Cr

Total Debt

₹5 Cr

Cash & Equivalents

₹13 Cr

Operating Cash Flow

₹13 Cr

Capex

-₹1 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

77.9%

Corporate Actions

Dividend Rate

₹1

Ex-Dividend Date

18 Sept 2026

Peer Comparison

Company	P/E	ROE
LARSEN & TOUBRO LTD.	30.1x	15.2%
SIEMENS LTD	88.8x	10.5%
ABB INDIA LIMITED	92.6x	19.1%

Recent News

1 positive5 general

ECORECO Stock Price and Chart — NSE:ECORECO

TradingView, 18 Aug

Eco Recycling Ltd. Share Price analysis after 9.5% rise

Univest, 05 Oct

Eco Recycling allots ₹12.33 crore warrants to promoters

scanx.trade, 22 Jun

Eco Recycling Secures BSE Nod For 3,00,000 Promoter Warrants At ₹411 Each

Sahi, 09 Jun

Eco Recycling consolidated net profit rises 11.15% in the June 2026 quarter

Business Standard, 10 AugResults

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

Eco Recycling Standalone March 2026 Net Sales at Rs 18.61 crore, up 90.48% Y-o-Y

Moneycontrol.com, 28 Apr

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🟢Business QualityStrong17.9/20

🟡Financial HealthAdequate12.5/20

🟢GrowthStrong18.5/20

🟢ProfitabilityStrong13.5/15

🔴ValuationDemanding5/15

🔴RiskHigh2.6/10

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. 4 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓Revenue growth stays above 30% a year39.5% CAGR
✓EBITDA margin holds above 71%72.8%
✓Free cash flow remains positive₹12 Cr
✓Debt / EBITDA stays below 2x0.1x
✓ROCE stays above 24%26.7%