Raksan Transformers Limited

Industrials — Electrical Equipment & Parts · BSE

₹265.00−₹6.25 (−2.30%)

DalalBaazaar Score

63 / 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, 7:02 pm

Understanding the Business

Company site ↗

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

What does this company do?

Raksan Transformers Limited manufactures power and distribution transformers. The company offers power transformer, distribution transformers, special purpose transformers, renewable energy transformers, and compact substations.

IndustryElectrical Equipment & Parts

SectorIndustrials

Employees143

Annual revenue₹362 Cr

How does it make money?

Turns over ₹362 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 143 employees supports ₹2.53 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹2.53 Cr

Who are its competitors?

The closest listed comparisons in its industry are SIEMENS LTD, ABB INDIA LIMITED, HAVELLS INDIA LIMITED. 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?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 53.0%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 54.6% against a peer median of 17.1% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

Peer median ROE17.1%

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 +404% while net margin moved +92% 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+404%

Margin effect+92%

DalalBaazaar Score

63/ 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
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

72/ 100

Good

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

Valuation

71/ 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

16.1x

Sector Median

88.8x

median of 3 sector peers

🟢Against its sector it trades 82% below the peer median of 88.8x.

vs. its own history

Not enough price and earnings history

vs. sector peers

Cheap

88.8x median of 3 peers · -82%

vs. generic bands

Fair

15x–35x

EV/EBITDA

12.1x

PEG

0.14

What's Good / What's Bad

🟢 What's Going Well6

Margins are improving
EBITDA margin is up from 8.1% to 13.0% over 3 years.
Return on equity is rising
ROE has improved from 21.1% to 43.4%.
Return on capital is rising
ROCE has improved from 29.8% to 53.0%.
High return on capital employed
ROCE of 53.0% is the mark of a business that converts capital into profit efficiently.
Very low debt
Debt/Equity of 0.27x leaves the balance sheet with plenty of headroom.
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

1 item require attention · 1 high

🔴Debt has risen sharplyFinancial
Total debt is up 264% over 3 years, from ₹6 Cr to ₹21 Cr.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 53.0% 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 8.1% to 13.0%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Cheaper than its peers
It trades 82% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹4 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.
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.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 54% a year✓ 71.5% CAGR
Latest reported year was 12.3%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 11%✓ 13.0%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✓ ₹4 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.4x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 50%✓ 53.0%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

8 / 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

6 good · 3 neutral · 2 weak

Market Cap

₹554 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

16.1x

Fair

Fairly valued against the generic band

P/B Ratio

5.63x

Rich

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

EPS (TTM)

₹16.41

Profitable

Profitable on a per-share basis

ROE

54.6%

Strong

Strong capital efficiency

ROCE

53.0%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.27x

Low

Conservative leverage

Revenue Growth (YoY)

12.3%

Healthy

Healthy top-line growth

Profit Growth (YoY)

64.9%

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

-₹1 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

ROA

20.9%

Good

Assets are working hard

Operating Margin

12.6%

Average

Average margins

Net Margin

9.2%

Average

Average bottom-line conversion

Current Ratio

1.47

Comfortable

Healthy short-term liquidity

52W Range Position

13%

Near low

Near its 52-week low

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹72 Cr	₹160 Cr	₹323 Cr	₹362 Cr	+71.5%
EBITDA	₹6 Cr	₹11 Cr	₹30 Cr	₹47 Cr	+100.8%
EBITDA Margin	8.1%	6.8%	9.4%	13.0%	—
PAT (Net Profit)	₹3 Cr	₹8 Cr	₹20 Cr	₹34 Cr	+113.2%
EPS	₹1.66	₹3.63	₹9.75	—	—
ROE	21.1%	32.0%	46.2%	43.4%	—
ROCE	29.8%	41.6%	53.0%	53.0%	—
Total Debt	₹6 Cr	₹10 Cr	₹24 Cr	₹21 Cr	+53.8%
Free Cash Flow	₹5 Cr	₹5 Cr	-₹22 Cr	₹4 Cr	-12.0%

🟢 Revenue has grown at 71.5% a year over 3 years.

🟢 EBITDA has grown at 100.8% a year over 3 years.

🟢 EBITDA Margin has risen from 8.1% to 13.0% over 3 years (+4.9 pts).

🟢 PAT (Net Profit) has grown at 113.2% a year over 3 years.

🟢 ROE has risen from 21.1% to 43.4% over 3 years (+22.3 pts).

🟢 ROCE has risen from 29.8% to 53.0% over 3 years (+23.3 pts).

🔴 Total Debt has grown at 53.8% a year over 3 years.

🔴 Free Cash Flow has shrunk at 12.0% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹156 Cr

Total Liabilities

₹78 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

₹15 Cr

Capex

-₹11 Cr

Shareholding (proxy)

Institutional Holding

1.7%

Insider Holding

74.9%

Peer Comparison

Company	P/E	ROE
SIEMENS LTD	88.8x	10.5%
ABB INDIA LIMITED	92.6x	19.1%
HAVELLS INDIA LIMITED	43.5x	17.1%

Recent News

1 mixed5 general

Raksan Transformers Q2 Results

Livemint, 16 OctResults

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

Raksan Transformers Ltd. IPO

The Economic Times, 13 Oct

Raksan Transformers Share Price: Price Action and Valuation

Univest, 16 Oct

Compare with

Equitymaster, 12 Oct

Raksan Transformers Limited Share Price

Upstox, 18 Sept

Raksan Transformers gets ROC extension for FY26 AGM until Dec 5

scanx.trade, 25 Sept

Watch Items

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

DalalBaazaar Thesis

StrongBusiness Quality · Growth · Profitability

MiddlingFinancial Health · 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. 1 high-severity red flag sits above this conclusion and should be read first.

All 5 tripwires holding · see Key things to watch ↑