IP Rings Limited

Consumer Cyclical — Auto Parts · NSE

₹141.48₹0.00 (0.00%)

DalalBaazaar Score

38 / 100

🔴 Weak

Verdict

CAUTION

Risk

High

Driven by moderate debt load, short-term liabilities exceed short-term assets, micro-cap size, which brings thin liquidity.

In simple words: The business is earning a fairly low return on the money invested in it, with both sales and profits growing well. Short-term liquidity is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:00 pm

Understanding the Business

Company site ↗

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

What does this company do?

IP Rings Limited manufactures and sells engine and transmission components in India, the United States, Thailand, France, and internationally.

IndustryAuto Parts

SectorConsumer Cyclical

Employees390

Annual revenue₹331 Cr

How does it make money?

Turns over ₹331 Cr a year. Of every ₹100 of sales, about ₹1 reaches shareholders as profit, with ₹10 left at the operating level before interest, tax and depreciation. Each of its 390 employees supports ₹84.9 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹84.9 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 9.7% 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?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +5% while net margin moved -2% 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+5%

Margin effect-2%

DalalBaazaar Score

38/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ ROE of 1.7% is weak

Quality vs. Valuation

Company Quality

37/ 100

Weak

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

Valuation

35/ 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.

Historical Valuation

Current P/E

58.0x

Sector Median

45.7x

median of 4 sector peers

⚠️Against its sector it trades 27% above the peer median of 45.7x.

vs. its own history

Not enough price and earnings history

vs. sector peers

Expensive

45.7x median of 4 peers · +27%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

8.7x

PEG

56.91

Red Flags

3 items require attention · 2 high · 1 watch

🔴Thin interest coverageFinancial
Operating profit covers interest only 1.2x — little room if earnings dip.
🔴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.
🟡Short-term liquidity is tightFinancial
Current ratio of 0.99 — 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?

The debt load needs earnings to hold up
Debt is 3.6x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
A premium to the sector to defend
It trades 27% above the peer median. That premium needs a reason that persists, or it closes.
Growth barely outpaces inflation
Revenue compounding at 1.6% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
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 8%✓ 10.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 3.6x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Interest cover stays above 3x✗ 1.2x
How much operating profit can fall before interest stops being comfortably covered.
4Revenue growth stays above 4% a year✗ 1.6% CAGR
Latest reported year was 17.8%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
5Free cash flow remains positive✓ ₹8 Cr
Profit that never becomes cash eventually stops being profit.

Investment Checklist

4 / 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

4 good · 5 neutral · 2 weak

Market Cap

₹179 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

58.0x

Expensive

Expensive — verify against sector peers

P/B Ratio

1.74x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹2.44

Profitable

Profitable on a per-share basis

ROE

1.7%

Weak

Weak capital efficiency

ROCE

9.7%

Moderate

Moderate return on the capital in the business

Debt/Equity

1.19x

Moderate

Moderate leverage

Revenue Growth (YoY)

17.8%

Healthy

Healthy top-line growth

Profit Growth (YoY)

838.5%

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

₹8 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

4.7%

Weak

Thin margins leave little room for error

Net Margin

0.9%

Weak

Very little revenue reaches the bottom line

Current Ratio

0.99

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.70

Defensive

Steadier than the market

52W Range Position

32%

Mid-range

Technical Snapshot

RSI (14)

48.9

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹315 Cr	₹312 Cr	₹298 Cr	₹331 Cr	+1.6%
EBITDA	₹29 Cr	₹24 Cr	₹22 Cr	₹35 Cr	+6.2%
EBITDA Margin	9.1%	7.6%	7.5%	10.4%	—
PAT (Net Profit)	₹2 Cr	-₹3 Cr	-₹4 Cr	₹2 Cr	+1.0%
ROE	1.5%	-3.0%	-4.4%	1.7%	—
ROCE	8.0%	5.2%	3.6%	9.7%	—
Total Debt	₹101 Cr	₹87 Cr	₹104 Cr	₹123 Cr	+6.6%
Free Cash Flow	₹42 Cr	₹35 Cr	₹19 Cr	₹8 Cr	-41.7%

🟡 Revenue has been broadly flat over 3 years (1.6% a year).

🟢 EBITDA has grown at 6.2% a year over 3 years.

🟢 EBITDA Margin has risen from 9.1% to 10.4% over 3 years (+1.3 pts).

🟡 PAT (Net Profit) has been broadly flat over 3 years (1.0% a year).

🟡 ROE has held roughly flat at 1.7% over 3 years.

🟢 ROCE has risen from 8.0% to 9.7% over 3 years (+1.8 pts).

🔴 Total Debt has grown at 6.6% a year over 3 years.

🔴 Free Cash Flow has shrunk at 41.7% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹323 Cr

Total Liabilities

₹220 Cr

Cash & Equivalents

₹2 Cr

Operating Cash Flow

₹8 Cr

Capex

—

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

69.3%

Corporate Actions

Ex-Dividend Date

17 Jul 2012

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

1 positive1 mixed4 general

IP Rings Stock: Price Action and Technical Outlook

Kalkine India, 01 Sept

IP Rings acquires JV manufacturing business for Re. 1

scanx.trade, 22 JunPartnership

🟡Mixed / dependsA partnership, whose value depends entirely on terms that a headline will not carry. Worth reading the filing before assuming either way.

IP Rings Ltd. Key Financial Ratios – Valuation, Profitability & More

Value Research, 31 Aug

IP Rings consolidated net profit rises 805.88% in the June 2026 quarter

Business Standard, 14 AugResults

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

IP Rings signs lease for new manufacturing facility to boost capacity

scanx.trade, 01 Aug

IP Rings Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 30 Aug

Watch Items

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

3 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Interest cover stays above 3x; Revenue growth stays above 4% a year · see Key things to watch ↑