Elgi Rubber Company Limited

Consumer Cyclical — Auto Parts · NSE

₹54.55+₹0.91 (+1.70%)

DalalBaazaar Score

25 / 100

🔴 Weak

Verdict

HIGH RISK

Risk

Very High

Driven by high debt relative to equity, short-term liabilities exceed short-term assets, negative free cash flow.

In simple words: The company is currently losing money, but sales are shrinking. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:49 pm

Understanding the Business

Company site ↗

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

What does this company do?

Elgi Rubber Company Limited, together with its subsidiaries, manufactures and sells reclaimed rubber, retreading machinery, and retread rubber in India and internationally.

IndustryAuto Parts

SectorConsumer Cyclical

Employees441

Annual revenue₹357 Cr

How does it make money?

Turns over ₹357 Cr a year. Of every ₹100 of sales, about ₹-67 reaches shareholders as profit, with ₹-44 left at the operating level before interest, tax and depreciation. Each of its 441 employees supports ₹80.9 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹80.9 lakh

Who are its competitors?

The closest listed comparisons in its industry are BOSCH LIMITED, MARUTI SUZUKI INDIA LTD., TVS MOTOR COMPANY LTD, EICHER MOTORS LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of -128.1% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE23.0%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -9% while net margin moved -4020% 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-9%

Margin effect-4020%

DalalBaazaar Score

25/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Return on equity is negative
✗ ROE has fallen by 321.1 points over the period

Quality vs. Valuation

Company Quality

22/ 100

Weak

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

Valuation

29/ 100

Expensive

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

Weak on business quality and not cheap enough to compensate.

vs. its own history

Not enough price and earnings history

vs. sector peers

Not enough peers with a usable P/E

vs. generic bands

N/A

No P/E — the company is lossmaking

EV/EBITDA

—

PEG

—

What's Good / What's Bad

🟢 What's Going Well0

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

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 3.7% to -317.4% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 11.4% to -128.1% — often a sign of competition or overexpansion.

Red Flags

7 items require attention · 5 high · 2 watch

🔴High leverageFinancial
Debt/Equity of 4.13x — earnings must service borrowings before shareholders see anything.
🔴Thin interest coverageFinancial
Operating profit covers interest only -8.1x — little room if earnings dip.
🔴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.
🔴The company is lossmakingFinancial
Net profit of -₹240 Cr in the latest reported year.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 49.2 points, from 5.4% to -43.8%.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 0.8x to -8.1x.
🟡Short-term liquidity is tightFinancial
Current ratio of 0.86 — near-term obligations exceed near-term assets.

Investment Thesis

🟢 Bull CaseWhat could make this work?

No clear supporting case emerges from the available numbers.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 5.4% to -43.8%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Leverage amplifies any setback
Debt/Equity of 4.13x. Interest is payable whether or not the business has a good year.
Returns on shareholder capital are falling
ROE has dropped from 3.7% to -317.4%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
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.

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

1EBITDA margin holds above -46%✓ -43.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹18 Cr
Profit that never becomes cash eventually stops being profit.
3Interest cover stays above 3x✗ -8.1x
How much operating profit can fall before interest stops being comfortably covered.
4ROCE stays above 8%✗ -128.1%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

2 / 11 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
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

0 good · 3 neutral · 8 weak

Market Cap

₹273 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

Not meaningful

Loss-making

Earnings are negative, so a P/E multiple can't be read here

P/B Ratio

3.61x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹-38.98

Loss-making

Negative earnings per share — the business is losing money

ROE

-317.4%

Weak

Weak capital efficiency

ROCE

-128.1%

Weak

Low return on total capital employed

Debt/Equity

4.13x

High

High leverage

Revenue Growth (YoY)

-18.1%

Shrinking

Sales are contracting

Profit Growth (YoY)

-5410.0%

Falling

Profits are shrinking

Dividend Yield

None

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

Free Cash Flow

-₹18 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

-1.2%

Weak

Thin margins leave little room for error

Net Margin

-56.4%

Weak

Very little revenue reaches the bottom line

Current Ratio

0.86

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.37

Defensive

Steadier than the market

52W Range Position

59%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

55.4 / 57.8

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

48.7

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹393 Cr	₹386 Cr	₹382 Cr	₹357 Cr	-3.2%
EBITDA	₹21 Cr	₹47 Cr	₹28 Cr	-₹156 Cr	—
EBITDA Margin	5.4%	12.2%	7.3%	-43.8%	—
PAT (Net Profit)	₹7 Cr	₹12 Cr	-₹4 Cr	-₹240 Cr	—
EPS	₹1.35	₹2.33	₹-0.87	₹-48	—
ROE	3.7%	6.1%	-2.4%	-317.4%	—
ROCE	11.4%	13.4%	7.7%	-128.1%	—
Total Debt	₹271 Cr	₹307 Cr	₹270 Cr	₹313 Cr	+4.9%
Free Cash Flow	-₹22 Cr	-₹19 Cr	-₹31 Cr	-₹18 Cr	—

🔴 Revenue has shrunk at 3.2% a year over 3 years.

🔴 EBITDA has turned negative, from ₹21 Cr to -₹156 Cr.

🔴 EBITDA Margin has fallen from 5.4% to -43.8% over 3 years (-49.2 pts).

🔴 PAT (Net Profit) has turned negative, from ₹7 Cr to -₹240 Cr.

🔴 EPS has turned negative, from ₹1.35 to ₹-48.

🔴 ROE has fallen from 3.7% to -317.4% over 3 years (-321.1 pts).

🔴 ROCE has fallen from 11.4% to -128.1% over 3 years (-139.5 pts).

🔴 Total Debt has grown at 4.9% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹434 Cr

Total Liabilities

₹358 Cr

Cash & Equivalents

₹5 Cr

Operating Cash Flow

-₹11 Cr

Capex

-₹7 Cr

Corporate Actions

Ex-Dividend Date

18 Mar 2020

Peer Comparison

Company	P/E	ROE
BOSCH LIMITED	56.9x	15.9%
MARUTI SUZUKI INDIA LTD.	25.2x	13.4%
TVS MOTOR COMPANY LTD	56.8x	35.8%
EICHER MOTORS LTD	34.7x	23.0%

Recent News

2 mixed4 general

ELGI RUBBER COMPANY LIMITED (ELGIRUBCO-EQ.NS) latest stock news and headlines

Yahoo Finance UK, 16 Oct

Elgi Rubber Company Ltd. Stock News: Share Price Up 8.11%

Univest, 05 AugPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Elgi Rubber sets Aug 27 for 20th AGM to approve director pay despite loss

scanx.trade, 27 Aug

Elgi Rubber Company reports consolidated net profit of Rs 40.85 crore in the June 2026 quarter

Business Standard, 12 AugResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Elgi Rubber Company Ltd. Key Financial Ratios – Valuation, Profitability & More

Value Research, 01 Sept

Elgi Rubber (ELGIRUBCO.NS) Slides 4.70% to ₹59.87, Testing Key Support Near ₹56.88 - Virgin POC

siam.in, 10 Sept

Watch Items

Revenue growth is negative (-18.1%) on the latest reported period — check if this is one-off or a trend.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

WeakBusiness Quality · Financial Health · Growth · Profitability · Valuation · Risk

Points for each in the Score ↑

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation. 5 high-severity red flags sit above this conclusion and should be read first.

3 of 4 tripwires tripped — Free cash flow remains positive; Interest cover stays above 3x; ROCE stays above 8% · see Key things to watch ↑