Rajesh Power Services Limited

Industrials — Engineering & Construction · BSE

₹824.10−₹6.60 (−0.79%)

DalalBaazaar Score

71 / 100

🟢 Good

Verdict

REASONABLE

Risk

Moderate

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

In simple words: Strong business and financial position, with both sales and profits growing well. Nothing obvious stands out as stretched — the usual checks on business quality and management still apply.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:09 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 Rajesh Power Services Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Rajesh Power Services Limited provides engineering, procurement, and construction contracting and services to power transmission and distribution utilities companies in India.

IndustryEngineering & Construction

SectorIndustrials

Employees2,134

Annual revenue₹1,627 Cr

How does it make money?

Turns over ₹1,627 Cr a year. Of every ₹100 of sales, about ₹9 reaches shareholders as profit, with ₹13 left at the operating level before interest, tax and depreciation. Each of its 2,134 employees supports ₹76.3 lakh of revenue a year, the signature of a people-led business.

EBITDA margin12.7%

Net margin8.8%

Revenue / employee₹76.3 lakh

Who are its competitors?

The closest listed comparisons in its industry are LARSEN & TOUBRO LTD., ADANI PORT & SEZ LTD, SIEMENS LTD. 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%

ADANI PORT & SEZ LTDP/E 29.9x · ROE 14.1%

SIEMENS LTDP/E 88.8x · ROE 10.5%

What is its competitive advantage?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 44.3%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 42.7% against a peer median of 14.1% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

ROCE44.3%

ROE42.7%

Peer median ROE14.1%

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 +686% while net margin moved +170% 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+686%

Margin effect+170%

DalalBaazaar Score

71/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast

Quality vs. Valuation

Company Quality

75/ 100

Good

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

Valuation

86/ 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

10.3x

2Y Median

21.5x

24 monthly readings · mean 37.7x · range 12.5x–104.1x

Sector Median

30.1x

median of 3 sector peers

🟢Current valuation is approximately 52% below its 2y median of 21.5x. 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 66% below the peer median of 30.1x.

vs. its own history

Cheap

21.5x median over 24 months · -52%

vs. sector peers

Cheap

30.1x median of 3 peers · -66%

vs. generic bands

Cheap

Below 15x

P/E (Trailing)

10.3x

P/B

3.65x

EV/EBITDA

7.8x

PEG

0.06

Dividend Yield

0.12%

What's Good / What's Bad

🟢 What's Going Well6

Margins are improving
EBITDA margin is up from 8.0% to 12.7% over 3 years.
Return on equity is rising
ROE has improved from 11.5% to 35.3%.
Return on capital is rising
ROCE has improved from 15.2% to 44.3%.
High return on capital employed
ROCE of 44.3% is the mark of a business that converts capital into profit efficiently.
Valuation below its historical average
At 10.3x the stock trades 52% below its own median of 21.5x.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Debt is rising
Total debt is up 113% over 3 years — worth checking what it funded.
Free cash flow is negative
The business is not currently covering its capital spending from operations.

Red Flags

3 items require attention · 3 high

🔴Debt has risen sharplyFinancial
Total debt is up 113% over 3 years, from ₹60 Cr to ₹127 Cr.
🔴Free cash flow negative for 3 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴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.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 44.3% 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 8.0% to 12.7%. 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 52% 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 66% 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?

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 74% a year✓ 98.8% CAGR
Latest reported year was 30.5%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 11%✓ 12.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹44 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.6x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 41%✓ 44.3%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

9 / 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 · 3 neutral · 0 weak

Market Cap

₹1,484 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

10.3x

Cheap

Cheap against the generic band

P/B Ratio

3.65x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹79.98

Profitable

Profitable on a per-share basis

ROE

42.7%

Strong

Strong capital efficiency

ROCE

44.3%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.31x

Low

Conservative leverage

Revenue Growth (YoY)

30.5%

Healthy

Healthy top-line growth

Profit Growth (YoY)

24.8%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.12%

Modest

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

Free Cash Flow

₹59 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹824.1

ROA

16.4%

Good

Assets are working hard

Operating Margin

11.4%

Average

Average margins

Net Margin

8.8%

Average

Average bottom-line conversion

Current Ratio

1.21

Comfortable

Healthy short-term liquidity

52W Range Position

14%

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

760.8 / 790.4

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

70.2

Overbought zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹207 Cr	₹285 Cr	₹1,071 Cr	₹1,627 Cr	+98.8%
EBITDA	₹17 Cr	₹42 Cr	₹130 Cr	₹206 Cr	+131.9%
EBITDA Margin	8.0%	14.8%	12.1%	12.7%	—
PAT (Net Profit)	₹7 Cr	₹26 Cr	₹97 Cr	₹143 Cr	+176.8%
EPS	₹3.75	₹14.45	₹59.75	—	—
ROE	11.5%	31.1%	36.5%	35.3%	—
ROCE	15.2%	30.0%	40.4%	44.3%	—
Total Debt	₹60 Cr	₹80 Cr	₹78 Cr	₹127 Cr	+28.7%
Free Cash Flow	₹12 Cr	-₹16 Cr	-₹28 Cr	-₹44 Cr	—

🟢 Revenue has grown at 98.8% a year over 3 years.

🟢 EBITDA has grown at 131.9% a year over 3 years.

🟢 EBITDA Margin has risen from 8.0% to 12.7% over 3 years (+4.7 pts).

🟢 PAT (Net Profit) has grown at 176.8% a year over 3 years.

🟢 ROE has risen from 11.5% to 35.3% over 3 years (+23.7 pts).

🟢 ROCE has risen from 15.2% to 44.3% over 3 years (+29.1 pts).

🔴 Total Debt has grown at 28.7% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹12 Cr to -₹44 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹942 Cr

Total Liabilities

₹536 Cr

Total Debt

₹127 Cr

Cash & Equivalents

₹1 Cr

Operating Cash Flow

-₹41 Cr

Capex

-₹2 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

73.4%

Corporate Actions

Dividend Rate

₹1

Ex-Dividend Date

18 Sept 2026

Peer Comparison

Company	P/E	ROE
LARSEN & TOUBRO LTD.	30.1x	15.2%
ADANI PORT & SEZ LTD	29.9x	14.1%
SIEMENS LTD	88.8x	10.5%

Recent News

2 positive1 mixed3 general

Rajesh Power Services Bags Orders Worth Rs 541 Cr From Gujarat Discoms

HDFC Sky, 15 OctOrder win

🟢Potentially positiveOrder wins add to future revenue, though the effect depends on the contract's size against annual sales and on when it is executed.

Rajesh Power shares rise 4% as company bags Rs 69 crore order from UGVCL

Business Today, 14 OctOrder win

🟢Potentially positiveAn order or contract win, which adds to future revenue. How much depends on its size against annual sales and on when it is executed.

Rajesh Power Services Wins Rs 541 Cr Gujarat Discom Orders

Rediff MoneyWiz, 15 Oct

Rajesh Power Services Shares Jump 5% on Rs 472 Crore Order

Univest, 12 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.

Rajesh Power Services Ltd Key Financial Ratios – Valuation, Profitability & More

Value Research, 02 Sept

Rajesh Power Services spurts after securing Rs 653 crore PGVCL order

Business Standard, 09 Jul

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in overbought territory — momentum entries here carry more short-term pullback risk.

DalalBaazaar Thesis

🟢Business QualityStrong15.4/20

🟢Financial HealthStrong14.6/20

🟢GrowthStrong14.9/20

🟢ProfitabilityStrong11.8/15

🟢ValuationAttractive11.8/15

🔴RiskHigh2.3/10

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 74% a year98.8% CAGR
✓EBITDA margin holds above 11%12.7%
✗Free cash flow remains positive-₹44 Cr
✓Debt / EBITDA stays below 2x0.6x
✓ROCE stays above 41%44.3%