Organic Recycling Systems Limited

Industrials — Waste Management · BSE

₹202.20+₹0.40 (+0.20%)

DalalBaazaar Score

81 / 100

🟢 Strong

Verdict

ATTRACTIVE

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, 6:07 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 Organic Recycling Systems Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Organic Recycling Systems Limited, an environmental engineering company, provides waste management and valorisation solutions in India. The company is involved in the development, construction, and maintenance of waste-to-energy projects in the municipal solid waste (MSW) sector.

IndustryWaste Management

SectorIndustrials

Employees65

Annual revenue₹105 Cr

How does it make money?

Turns over ₹105 Cr a year. Of every ₹100 of sales, about ₹24 reaches shareholders as profit, with ₹30 left at the operating level before interest, tax and depreciation. Each of its 65 employees supports ₹1.62 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin29.5%

Net margin23.9%

Revenue / employee₹1.62 Cr

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 16.3% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

ROCE16.3%

ROE20.3%

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 +465% while net margin moved +21% 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+465%

Margin effect+21%

DalalBaazaar Score

81/ 100

Strong

Weighted across six categories. Every point is explained below.

✓ Beta of -0.19 — 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

85/ 100

Excellent

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

Valuation

84/ 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

12.6x

3Y Median

22.1x

38 monthly readings · mean 26.9x · range 9.5x–63.3x

Sector Median

88.8x

median of 3 sector peers

🟢Current valuation is approximately 43% below its 3y median of 22.1x. 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 86% below the peer median of 88.8x.

vs. its own history

Cheap

22.1x median over 38 months · -43%

vs. sector peers

Cheap

88.8x median of 3 peers · -86%

vs. generic bands

Cheap

Below 15x

P/E (Trailing)

12.6x

P/B

1.42x

EV/EBITDA

11.6x

PEG

0.14

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well5

Debt is being paid down
Total debt is down 35% over 3 years.
Return on equity is rising
ROE has improved from 14.3% to 20.4%.
Return on capital is rising
ROCE has improved from 7.1% to 16.3%.
Valuation below its historical average
At 12.6x the stock trades 43% below its own median of 22.1x.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention3

Margins are compressing
EBITDA margin has slipped from 61.2% to 29.5% over 3 years.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Inventory building faster than sales
Inventory is up 982% against revenue growth of 465% — stock may not be moving.

Red Flags

3 items require attention · 3 high

🔴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.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 31.7 points, from 61.2% to 29.5%.
🔴Inventory building faster than salesFinancial
Inventory up 982% against revenue up 465% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Deleveraging frees up earnings
Debt is down 35% 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 43% 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 86% 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?

Margins are being competed away
EBITDA margin has fallen from 61.2% to 29.5%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
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
3 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 59% a year✓ 78.1% CAGR
Latest reported year was 143.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 28%✓ 29.5%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹7 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.5x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 13%✓ 16.3%
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

8 good · 2 neutral · 1 weak

Market Cap

₹315 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

12.6x

Cheap

Cheap against the generic band

P/B Ratio

1.42x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹16.08

Profitable

Profitable on a per-share basis

ROE

20.3%

Strong

Strong capital efficiency

ROCE

16.3%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.37x

Low

Conservative leverage

Revenue Growth (YoY)

143.9%

Healthy

Healthy top-line growth

Profit Growth (YoY)

48.5%

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

-₹13 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹202.2

ROA

8.6%

Good

Assets are working hard

Operating Margin

19.2%

Good

Healthy core-business profitability

Net Margin

23.9%

Good

Strong bottom-line conversion

Current Ratio

2.33

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

-0.19

Defensive

Steadier than the market

52W Range Position

85%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

194.7 / 174.5

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

53.8

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹19 Cr	₹27 Cr	₹48 Cr	₹105 Cr	+78.1%
EBITDA	₹11 Cr	₹11 Cr	₹21 Cr	₹31 Cr	+39.7%
EBITDA Margin	61.2%	40.5%	43.7%	29.5%	—
PAT (Net Profit)	₹4 Cr	₹8 Cr	₹16 Cr	₹25 Cr	+90.0%
EPS	₹3.16	₹8.01	₹12.39	₹16.08	+71.9%
ROE	14.3%	11.0%	13.9%	20.4%	—
ROCE	7.1%	7.6%	10.6%	16.3%	—
Total Debt	₹70 Cr	₹34 Cr	₹37 Cr	₹46 Cr	-13.2%
Free Cash Flow	-₹28 Cr	-₹2 Cr	-₹21 Cr	-₹7 Cr	—

🟢 Revenue has grown at 78.1% a year over 3 years.

🟢 EBITDA has grown at 39.7% a year over 3 years.

🔴 EBITDA Margin has fallen from 61.2% to 29.5% over 3 years (-31.7 pts).

🟢 PAT (Net Profit) has grown at 90.0% a year over 3 years.

🟢 EPS has grown at 71.9% a year over 3 years.

🟢 ROE has risen from 14.3% to 20.4% over 3 years (+6.1 pts).

🟢 ROCE has risen from 7.1% to 16.3% over 3 years (+9.2 pts).

🟢 Total Debt has shrunk at 13.2% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹210 Cr

Total Liabilities

₹87 Cr

Total Debt

₹46 Cr

Cash & Equivalents

₹3 Cr

Operating Cash Flow

₹19 Cr

Capex

-₹25 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

66.8%

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 positive1 mixed4 general

Organic Recycling Systems Approves 1:2 Bonus Issue to Expand Share Capital Base

Sahi, 06 JulCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Organic Recycling Systems Ltd. 52 Week High Streak Analysis

Univest, 01 Oct

Suhru C. Patel reduces stake in Organic Recycling Systems by 900 shares

scanx.trade, 05 Oct

Organic Recycling Systems Limited's Next Bet: Turning the Carbon Dioxide from Its Own Plants into Fuel

Business Standard, 03 Aug

Organic Recycling Systems: Stock in focus after company strengthens green chemicals vertical with new acquisition

Alice Blue, 13 MarM&A

🟡Mixed / dependsAcquisitions change the balance sheet before they change the earnings. Look at what was paid, how it was funded, and whether debt rose.

Organic Recycling Systems Gets ₹167.30 Crore BPCL Orders

HDFC Sky, 08 Sept

Watch Items

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

DalalBaazaar Thesis

🟢Business QualityStrong17.1/20

🟢Financial HealthStrong15/20

🟢GrowthStrong18.5/20

🟢ProfitabilityStrong13.5/15

🟢ValuationAttractive13.2/15

🔴RiskHigh4/10

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

This thesis breaks if

✓Revenue growth stays above 59% a year78.1% CAGR
✓EBITDA margin holds above 28%29.5%
✗Free cash flow remains positive-₹7 Cr
✓Debt / EBITDA stays below 2x1.5x
✓ROCE stays above 13%16.3%