Resourceful Automobile Limited

Consumer Cyclical — Auto & Truck Dealerships · BSE

₹57.60₹0.00 (0.00%)

DalalBaazaar Score

57 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

High

Driven by negative free cash flow, micro-cap size, which brings thin liquidity, falling profits.

In simple words: Reasonable but unspectacular business quality, though profits are falling even as sales grow. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:44 pm

Understanding the Business

Company site ↗

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

What does this company do?

Resourceful Automobile Limited engages in the dealership and sale of two-wheelers and related services in India. It operates as an authorized dealer of Yamaha that sells two-wheeler bikes under the Sawhney Automobiles showroom name.

IndustryAuto & Truck Dealerships

SectorConsumer Cyclical

Employees8

Annual revenue₹26 Cr

How does it make money?

Turns over ₹26 Cr a year. Of every ₹100 of sales, about ₹6 reaches shareholders as profit, with ₹12 left at the operating level before interest, tax and depreciation. Each of its 8 employees supports ₹3.28 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹3.28 Cr

Who are its competitors?

The closest listed comparisons in its industry are MARUTI SUZUKI INDIA LTD., TITAN COMPANY LIMITED, TRENT LTD, AVENUE SUPERMARTS 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?Little sign of one

Returns on capital of 13.0% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE25.9%

DalalBaazaar Score

57/ 100

Moderate

Weighted across six categories. Every point is explained below.

• Beta of 0.88 — moves roughly with the market
✗ 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

56/ 100

Average

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

Valuation

77/ 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

10.1x

2Y Median

9.8x

28 monthly readings · mean 9.9x · range 6.6x–17.1x

Sector Median

69.2x

median of 4 sector peers

🟡Currently trading close to its 2y median of 9.8x — the market is paying about what it usually pays for this company.

🟢Against its sector it trades 85% below the peer median of 69.2x.

vs. its own history

Fair

9.8x median over 28 months · +3%

vs. sector peers

Cheap

69.2x median of 4 peers · -85%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

8.8x

PEG

0.27

What's Good / What's Bad

🟢 What's Going Well1

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.
🔴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.
🟡Debt is increasingFinancial
Total debt is up 27% over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Cheaper than its peers
It trades 85% 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 4.1x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
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 10%✓ 11.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 4.1x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Free cash flow remains positive✗ -₹8 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✓ 3.1x
How much operating profit can fall before interest stops being comfortably covered.
5Revenue growth stays above 6% a year✓ 8.7% CAGR
Latest reported year was 36.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.

Investment Checklist

6 / 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

4 good · 5 neutral · 2 weak

Market Cap

₹15 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

10.1x

Cheap

Cheap against the generic band

P/B Ratio

0.83x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹5.69

Profitable

Profitable on a per-share basis

ROE

8.6%

Moderate

Moderate capital efficiency

ROCE

13.0%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.69x

Moderate

Moderate leverage

Revenue Growth (YoY)

36.9%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-33.5%

Falling

Profits are shrinking

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹9 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

ROA

6.3%

Average

Average asset productivity

Operating Margin

12.6%

Average

Average margins

Net Margin

5.6%

Average

Average bottom-line conversion

Current Ratio

2.92

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.88

Market-like

Moves roughly in line with the market

52W Range Position

66%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

51.0 / 44.2

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

84.9

Overbought zone

Financial Trend (5-Year)

Metric	FY23	FY24	FY24	FY25	FY26	3Y CAGR	4Y CAGR
Revenue	₹19 Cr	—	₹19 Cr	₹21 Cr	₹26 Cr	—	+8.7%
EBITDA	₹2 Cr	—	₹4 Cr	₹3 Cr	₹3 Cr	—	+19.3%
EBITDA Margin	8.0%	—	19.7%	15.2%	11.6%	—	—
PAT (Net Profit)	₹0 Cr	—	₹2 Cr	₹1 Cr	₹2 Cr	—	+38.1%
EPS	₹1.56	—	₹7.33	₹4.77	—	—	—
ROE	—	—	54.3%	7.5%	8.2%	—	—
ROCE	—	—	35.9%	11.2%	13.0%	—	—
Total Debt	—	₹10 Cr	₹11 Cr	₹6 Cr	₹13 Cr	+8.2%	+8.2%
Free Cash Flow	-₹0 Cr	—	-₹2 Cr	-₹3 Cr	-₹8 Cr	—	—

🟢 Revenue has grown at 8.7% a year over 4 years.

🟢 EBITDA has grown at 19.3% a year over 4 years.

🟢 EBITDA Margin has risen from 8.0% to 11.6% over 3 years (+3.6 pts).

🟢 PAT (Net Profit) has grown at 38.1% a year over 4 years.

🔴 ROE has fallen from 54.3% to 8.2% over 3 years (-46.1 pts).

🔴 ROCE has fallen from 35.9% to 13.0% over 3 years (-22.9 pts).

🔴 Total Debt has grown at 8.2% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹35 Cr

Total Liabilities

₹17 Cr

Cash & Equivalents

₹1 Cr

Operating Cash Flow

-₹8 Cr

Capex

—

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

74.7%

Peer Comparison

Company	P/E	ROE
MARUTI SUZUKI INDIA LTD.	25.2x	13.4%
TITAN COMPANY LIMITED	68.5x	36.7%
TRENT LTD	87.2x	25.9%
AVENUE SUPERMARTS LIMITED	69.9x	12.7%

Recent News

6 general

Resourceful Automobile Limited Share Price

Upstox, 05 May

Resourceful Automobile shareholders reject ₹1.53 crore warrant issue

scanx.trade, 06 Oct

Resourceful Automobile shares list flat at IPO price despite 400x subscription

Moneycontrol.com, 29 Aug

Resourceful Automobile approves financials, auditor at 9th AGM

scanx.trade, 11 Aug

Why Resourceful Automobile IPO disappointed investors after huge IPO bids

India Today, 29 Aug

Resourceful Automobile IPO: Price band set at ₹117 per share; check other details here

Livemint, 21 Aug

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

StrongGrowth · Valuation

MiddlingFinancial Health

WeakBusiness Quality · Profitability · Risk

Points for each in the Score ↑

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.

2 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Free cash flow remains positive · see Key things to watch ↑