Race Eco Chain Limited

Industrials — Waste Management · NSE

₹120.00−₹8.41 (−6.55%)

DalalBaazaar Score

54 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Moderate

Driven by moderate debt load, micro-cap size, which brings thin liquidity.

In simple words: Strong business and financial position, with both sales and profits growing well. Thin profit margins are the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:06 pm

Constructive picture on fundamentals. Profitability, leverage and growth metrics are broadly healthy on this snapshot. That said, valuation should still be checked against direct sector peers (not just the generic P/E bands used here) before treating this as a buy signal.

Understanding the Business

Company site ↗

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

What does this company do?

Race Eco Chain Limited, together with its subsidiaries, engages in waste management activities in India. It operates through Misc. Old Economy Products; Recycle Division; Restore Division; Biomass Division; and IT Division segments.

IndustryWaste Management

SectorIndustrials

Employees46

Annual revenue₹619 Cr

How does it make money?

Turns over ₹619 Cr a year. Of every ₹100 of sales, about ₹1 reaches shareholders as profit, with ₹3 left at the operating level before interest, tax and depreciation. Each of its 46 employees supports ₹13.45 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin3.0%

Net margin1.1%

Revenue / employee₹13.45 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 19.1% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

ROCE19.1%

ROE9.1%

Peer median ROE15.2%

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +130% while net margin moved +125% 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+130%

Margin effect+125%

DalalBaazaar Score

54/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROE of 9.1% is weak

Quality vs. Valuation

Company Quality

54/ 100

Average

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 reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

26.3x

3Y Median

286.6x

40 monthly readings · mean 256.6x · range 25.8x–543.5x

Sector Median

88.8x

median of 3 sector peers

🟢Current valuation is approximately 91% below its 3y median of 286.6x. 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 70% below the peer median of 88.8x.

vs. its own history

Cheap

286.6x median over 40 months · -91%

vs. sector peers

Cheap

88.8x median of 3 peers · -70%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

26.3x

P/B

2.64x

EV/EBITDA

15.1x

PEG

0.36

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 1.0% to 3.0% over 3 years.
Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
Return on capital is rising
ROCE has improved from 11.9% to 19.1%.
Valuation below its historical average
At 26.3x the stock trades 91% below its own median of 286.6x.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention3

Debt is rising
Total debt is up 481% over 3 years — worth checking what it funded.
Receivables growing faster than sales
Receivables are up 173% against revenue growth of 130% — customers are taking longer to pay.
Inventory building faster than sales
Inventory is up 355% against revenue growth of 130% — stock may not be moving.

Red Flags

3 items require attention · 2 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 481% over 3 years, from ₹16 Cr to ₹90 Cr.
🔴Inventory building faster than salesFinancial
Inventory up 355% against revenue up 130% — stock may not be moving.
🟡Receivables growing faster than salesFinancial
Receivables up 173% against revenue up 130% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 19.1% 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 1.0% to 3.0%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 91% 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 70% 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?

The debt load needs earnings to hold up
Debt is 4.8x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Sales are being booked faster than collected
Receivables are up 173% against revenue up 130%. 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

1Revenue growth stays above 24% a year✓ 32.0% CAGR
Latest reported year was 21.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 1%✓ 3.0%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA falls below 3x✗ 4.8x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
4Interest cover stays above 3x✗ 2.2x
How much operating profit can fall before interest stops being comfortably covered.
5Free cash flow remains positive✓ ₹6 Cr
Profit that never becomes cash eventually stops being profit.

Investment Checklist

8 / 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

5 good · 6 neutral · 0 weak

Market Cap

₹207 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

26.3x

Fair

Fairly valued against the generic band

P/B Ratio

2.64x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹4.56

Profitable

Profitable on a per-share basis

ROE

9.1%

Moderate

Moderate capital efficiency

ROCE

19.1%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

1.04x

Moderate

Moderate leverage

Revenue Growth (YoY)

21.9%

Healthy

Healthy top-line growth

Profit Growth (YoY)

73.8%

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

₹6 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹120

Operating Margin

1.5%

Weak

Thin margins leave little room for error

Net Margin

1.2%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.23

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.36

Defensive

Steadier than the market

52W Range Position

24%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

111.8 / 105.2

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

50.9

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹269 Cr	₹347 Cr	₹555 Cr	₹619 Cr	+32.0%
EBITDA	₹3 Cr	₹7 Cr	₹11 Cr	₹19 Cr	+89.3%
EBITDA Margin	1.0%	1.9%	1.9%	3.0%	—
PAT (Net Profit)	₹1 Cr	₹2 Cr	₹4 Cr	₹7 Cr	+73.1%
EPS	₹0.79	₹0.92	₹2.22	₹3.92	+70.6%
ROE	6.3%	7.0%	5.4%	9.1%	—
ROCE	11.9%	19.9%	12.4%	19.1%	—
Total Debt	₹16 Cr	₹43 Cr	₹62 Cr	₹90 Cr	+79.7%
Free Cash Flow	-₹15 Cr	-₹18 Cr	-₹52 Cr	₹6 Cr	—

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

🟢 EBITDA has grown at 89.3% a year over 3 years.

🟢 EBITDA Margin has risen from 1.0% to 3.0% over 3 years (+2.0 pts).

🟢 PAT (Net Profit) has grown at 73.1% a year over 3 years.

🟢 EPS has grown at 70.6% a year over 3 years.

🟢 ROE has risen from 6.3% to 9.1% over 3 years (+2.8 pts).

🟢 ROCE has risen from 11.9% to 19.1% over 3 years (+7.2 pts).

🔴 Total Debt has grown at 79.7% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹15 Cr to ₹6 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹216 Cr

Total Liabilities

₹129 Cr

Total Debt

₹90 Cr

Cash & Equivalents

₹15 Cr

Operating Cash Flow

₹19 Cr

Capex

-₹13 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

59.9%

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 mixed1 negative4 general

Race Eco Chain Share Price News: Valuation and Sector View

Univest, 16 Oct

Race Eco Chain Ltd Valuation Shifts to Fair Amidst Volatile Market Performance

MarketsMojo, 16 Oct

Race Eco Chain Share Price Rises 15.13% on Price Action

Univest, 15 OctPrice 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.

Race Eco Chain Ltd. Key Financial Ratios – Valuation, Profitability & More

Value Research, 27 Aug

Race Eco Chain promoters pledge entire 44.79% stake for personal use

scanx.trade, 04 OctOwnership

🔴Potentially negativePromoter selling or pledging is a signal worth understanding, though the reason is often personal rather than about the business.

It's Down 27% But Race Eco Chain Limited (NSE:RACE) Could Be Riskier Than It Looks

Simply Wall Street, 22 Jan

Watch Items

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

DalalBaazaar Thesis

🟡Business QualityAdequate11.5/20

🟡Financial HealthAdequate9.6/20

🟢GrowthStrong14.9/20

🔴ProfitabilityWeak4.5/15

🟡ValuationFair9.5/15

🔴RiskHigh4.4/10

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 2 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓Revenue growth stays above 24% a year32.0% CAGR
✓EBITDA margin holds above 1%3.0%
✗Debt / EBITDA falls below 3x4.8x
✗Interest cover stays above 3x2.2x
✓Free cash flow remains positive₹6 Cr