Narmada Macplast Drip Irrigation Systems Ltd.

Industrials — Farm & Heavy Construction Machinery · BSE

₹23.00+₹0.15 (+0.66%)

DalalBaazaar Score

72 / 100

🟢 Good

Verdict

REASONABLE

Risk

Moderate

Driven by 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. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:45 pm

Understanding the Business

Company site ↗

The 60-second version of Narmada Macplast Drip Irrigation Systems Ltd. — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Narmada Macplast Drip Irrigation Systems Ltd. engages in the provision of drip irrigation systems services. The company is based in Gandhinagar, India.

IndustryFarm & Heavy Construction Machinery

SectorIndustrials

Employees6

Annual revenue₹13 Cr

How does it make money?

Turns over ₹13 Cr a year. Of every ₹100 of sales, about ₹13 reaches shareholders as profit, with ₹17 left at the operating level before interest, tax and depreciation. Each of its 6 employees supports ₹2.22 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹2.22 Cr

Who are its competitors?

The closest listed comparisons in its industry are MAHINDRA & MAHINDRA LTD, ASHOK LEYLAND LTD, TATA MOTORS LIMITED, LARSEN & TOUBRO 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?Some evidence

ROCE of 24.1% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

Peer median ROE24.4%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +33% while net margin moved +14235% 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+33%

Margin effect+14235%

DalalBaazaar Score

72/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.16 — historically steadier than the index
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ 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

77/ 100

Good

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

Valuation

73/ 100

Cheap

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

A good business currently available at an undemanding price — the combination this framework is built to look for.

Historical Valuation

Current P/E

4.6x

3Y Median

88.6x

40 monthly readings · mean 257.2x · range 10.4x–1079.7x

Sector Median

27.6x

median of 4 sector peers

🟢Current valuation is approximately 95% below its 3y median of 88.6x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 83% below the peer median of 27.6x.

vs. its own history

Cheap

88.6x median over 40 months · -95%

vs. sector peers

Cheap

27.6x median of 4 peers · -83%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

36.7x

PEG

0.01

What's Good / What's Bad

🟢 What's Going Well6

Margins are improving
EBITDA margin is up from 0.5% to 17.0% over 3 years.
Debt is being paid down
Total debt is down 90% over 3 years.
Return on equity is rising
ROE has improved from 0.4% to 17.8%.
Return on capital is rising
ROCE has improved from 1.4% to 24.1%.
High return on capital employed
ROCE of 24.1% 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

3 items require attention · 2 high · 1 watch

🔴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.
🔴Receivables growing faster than salesFinancial
Receivables up 1125% against revenue up 33% — sales are being booked faster than they are collected.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 900% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 24.1% 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 0.5% to 17.0%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Deleveraging frees up earnings
Debt is down 90% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Priced below its own history
The stock trades 95% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Cheaper than its peers
It trades 83% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.

🔴 Bear CaseWhat could go wrong?

Sales are being booked faster than collected
Receivables are up 1125% against revenue up 33%. 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
2 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

1EBITDA margin holds above 15%✓ 17.0%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹0 Cr
Profit that never becomes cash eventually stops being profit.
3Revenue growth stays above 7% a year✓ 9.9% CAGR
Latest reported year was 18.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
4Debt / EBITDA stays below 2x✓ 0.0x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 21%✓ 24.1%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

10 / 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

7 good · 2 neutral · 2 weak

Market Cap

₹83 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

4.6x

Cheap

Cheap against the generic band

P/B Ratio

8.86x

Rich

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

EPS (TTM)

₹5.02

Profitable

Profitable on a per-share basis

ROE

17.8%

Strong

Strong capital efficiency

ROCE

24.1%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.46x

Low

Conservative leverage

Revenue Growth (YoY)

18.9%

Healthy

Healthy top-line growth

Profit Growth (YoY)

1017.1%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.09%

Modest

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

Free Cash Flow

-₹0 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

16.5%

Good

Healthy core-business profitability

Net Margin

12.4%

Good

Strong bottom-line conversion

Current Ratio

1.42

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.16

Defensive

Steadier than the market

52W Range Position

42%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

23.1 / 23.1

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

36.7

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹10 Cr	₹2 Cr	₹7 Cr	₹13 Cr	+9.9%
EBITDA	₹0 Cr	₹0 Cr	₹1 Cr	₹2 Cr	+256.3%
EBITDA Margin	0.5%	3.2%	16.0%	17.0%	—
PAT (Net Profit)	₹0 Cr	₹0 Cr	₹5 Cr	₹2 Cr	+475.2%
EPS	₹0.02	—	₹1.49	₹0.05	+32.0%
ROE	0.4%	0.1%	69.8%	17.8%	—
ROCE	1.4%	1.3%	83.9%	24.1%	—
Total Debt	₹0 Cr	₹1 Cr	—	₹0 Cr	-53.4%
Free Cash Flow	-₹2 Cr	-₹0 Cr	-₹6 Cr	-₹0 Cr	—

🟢 Revenue has grown at 9.9% a year over 3 years.

🟢 EBITDA has grown at 256.3% a year over 3 years.

🟢 EBITDA Margin has risen from 0.5% to 17.0% over 3 years (+16.5 pts).

🟢 PAT (Net Profit) has grown at 475.2% a year over 3 years.

🟢 EPS has grown at 32.0% a year over 3 years.

🟢 ROE has risen from 0.4% to 17.8% over 3 years (+17.4 pts).

🟢 ROCE has risen from 1.4% to 24.1% over 3 years (+22.7 pts).

🟢 Total Debt has shrunk at 53.4% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹19 Cr

Total Liabilities

₹10 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹0 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

15.6%

Corporate Actions

Dividend Rate

₹0.02

Ex-Dividend Date

16 May 2025

Peer Comparison

Company	P/E	ROE
MAHINDRA & MAHINDRA LTD	17.8x	19.7%
ASHOK LEYLAND LTD	25.2x	24.4%
TATA MOTORS LIMITED	37.1x	32.8%
LARSEN & TOUBRO LTD.	30.1x	15.2%

Recent News

1 positive1 mixed4 general

Narmada Macplast Q2FY27 Results: Net profit rises 23% YoY to ₹50 lakh

scanx.trade, 15 OctResults

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

Narmada Macplast Drip Irrigation Systems Ltd. Key Financial Ratios – Valuation, Profitability & More

Value Research, 02 Sept

Narmada Macplast Drip Irrigation Systems Ltd. Share Price Live Today

CNBC TV18, 03 Jan

Narmada Macplast closes trading window from Oct 1 for Q2FY27 results

scanx.trade, 26 SeptResults

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

Narmada Macplast Drip Irrigation Systems Responds to BSE Clarification on Share Price Movement

scanx.trade, 17 Apr

Narmada Macplast Drip Irrigation Systems (BSE:517431) - Stock Analysis

Simply Wall Street, 11 Sept

Watch Items

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

DalalBaazaar Thesis

StrongBusiness Quality · Financial Health · Growth · Profitability · Valuation

WeakRisk

Points for each in the Score ↑

Attractive on both counts

A good business currently available at an undemanding price — the combination this framework exists to look for. The work left is qualitative: whether the advantage the numbers imply is one you can identify and expect to last. 2 high-severity red flags sit above this conclusion and should be read first.

1 of 5 tripwires tripped — Free cash flow remains positive · see Key things to watch ↑