Ramco Industries Limited

Industrials — Building Products & Equipment · NSE

₹301.00+₹7.70 (+2.63%)

DalalBaazaar Score

66 / 100

🟢 Good

Verdict

NEUTRAL

Risk

High

Driven by high debt relative to equity, micro-cap size, which brings thin liquidity.

In simple words: The business is earning a fairly low return on the money invested in it, with both sales and profits growing well. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:05 pm

Caution warranted. Multiple fundamental metrics — flagged in red below — point to either valuation stretch, leverage risk, or weakening profitability. This doesn't mean avoid the stock outright, but it does mean the burden of proof is on the growth story to justify the current price.

Understanding the Business

Company site ↗

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

What does this company do?

Ramco Industries Limited engages in the building products, textiles, and power generation businesses in India. The company operates through three segments: Building Products, Textile and Wind Power Generation segments.

IndustryBuilding Products & Equipment

SectorIndustrials

Employees1,775

Annual revenue₹1,787 Cr

How does it make money?

Turns over ₹1,787 Cr a year. Of every ₹100 of sales, about ₹17 reaches shareholders as profit, with ₹14 left at the operating level before interest, tax and depreciation. Each of its 1,775 employees supports ₹1.01 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin13.7%

Net margin17.1%

Revenue / employee₹1.01 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?Little sign of one

Returns on capital of 4.6% 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.

ROCE4.6%

ROE6.8%

Peer median ROE15.2%

What is the outlook?

1 analysts covering the stock expect revenue to grow about 11.8% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+11.8%

Analysts1

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +23% while net margin moved +101% 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+23%

Margin effect+101%

DalalBaazaar Score

66/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.35 — historically steadier than the index
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ High leverage magnifies any downturn in earnings

Quality vs. Valuation

Company Quality

65/ 100

Good

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

8.0x

3Y Median

15.6x

40 monthly readings · mean 15.8x · range 8.5x–24.0x

Sector Median

88.8x

median of 3 sector peers

🟢Current valuation is approximately 49% below its 3y median of 15.6x. 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 91% below the peer median of 88.8x.

vs. its own history

Cheap

15.6x median over 40 months · -49%

vs. sector peers

Cheap

88.8x median of 3 peers · -91%

vs. generic bands

Cheap

Below 15x

P/E (Trailing)

8.0x

P/B

0.58x

EV/EBITDA

10.9x

PEG

0.23

Dividend Yield

0.42%

What's Good / What's Bad

🟢 What's Going Well6

Margins are improving
EBITDA margin is up from 11.7% to 13.7% over 3 years.
Debt is being paid down
Total debt is down 45% over 3 years.
Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
Return on equity is rising
ROE has improved from 3.2% to 6.8%.
Valuation below its historical average
At 8.0x the stock trades 49% below its own median of 15.6x.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Receivables growing faster than sales
Receivables are up 45% against revenue growth of 23% — customers are taking longer to pay.

Red Flags

2 items require attention · 1 high · 1 watch

🔴High leverageFinancial
Debt/Equity of 3.79x — earnings must service borrowings before shareholders see anything.
🟡Receivables growing faster than salesFinancial
Receivables up 45% against revenue up 23% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 11.7% to 13.7%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Deleveraging frees up earnings
Debt is down 45% 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 49% 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 91% 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?

Leverage amplifies any setback
Debt/Equity of 3.79x. Interest is payable whether or not the business has a good year.
Sales are being booked faster than collected
Receivables are up 45% against revenue up 23%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Growth barely outpaces inflation
Revenue compounding at 7.1% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
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

1EBITDA margin holds above 12%✓ 13.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Revenue growth stays above 5% a year✓ 7.1% CAGR
Latest reported year was 17.3%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
3Free cash flow remains positive✓ ₹162 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.7x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 8%✗ 4.6%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

8 / 12 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
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

6 good · 2 neutral · 3 weak

Market Cap

₹2,614 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

8.0x

Cheap

Cheap against the generic band

P/B Ratio

0.58x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹37.79

Profitable

Profitable on a per-share basis

ROE

6.8%

Weak

Weak capital efficiency

ROCE

4.6%

Weak

Low return on total capital employed

Debt/Equity

3.79x

High

High leverage

Revenue Growth (YoY)

17.3%

Healthy

Healthy top-line growth

Profit Growth (YoY)

31.9%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.42%

Modest

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

Free Cash Flow

₹162 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹301

P/E (Forward)

26.1x

Flat

At or above the trailing multiple — no earnings uplift is being priced in

Operating Margin

16.1%

Good

Healthy core-business profitability

Net Margin

17.4%

Good

Strong bottom-line conversion

Current Ratio

2.55

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.35

Defensive

Steadier than the market

52W Range Position

43%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

307.1 / 325.5

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

31.2

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1,453 Cr	₹1,495 Cr	₹1,667 Cr	₹1,787 Cr	+7.1%
EBITDA	₹170 Cr	₹168 Cr	₹192 Cr	₹245 Cr	+12.9%
EBITDA Margin	11.7%	11.2%	11.5%	13.7%	—
PAT (Net Profit)	₹124 Cr	₹106 Cr	₹181 Cr	₹306 Cr	+35.2%
EPS	₹14.83	₹12.66	₹20.89	₹35.35	+33.6%
ROE	3.2%	2.6%	4.3%	6.8%	—
ROCE	3.5%	3.2%	3.6%	4.6%	—
Total Debt	₹310 Cr	₹244 Cr	₹258 Cr	₹171 Cr	-17.9%
Free Cash Flow	-₹121 Cr	₹94 Cr	₹103 Cr	₹162 Cr	—

🟢 Revenue has grown at 7.1% a year over 3 years.

🟢 EBITDA has grown at 12.9% a year over 3 years.

🟢 EBITDA Margin has risen from 11.7% to 13.7% over 3 years (+2.0 pts).

🟢 PAT (Net Profit) has grown at 35.2% a year over 3 years.

🟢 EPS has grown at 33.6% a year over 3 years.

🟢 ROE has risen from 3.2% to 6.8% over 3 years (+3.6 pts).

🟢 ROCE has risen from 3.5% to 4.6% over 3 years (+1.1 pts).

🟢 Total Debt has shrunk at 17.9% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹121 Cr to ₹162 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹4,977 Cr

Total Liabilities

₹455 Cr

Total Debt

₹171 Cr

Cash & Equivalents

₹115 Cr

Operating Cash Flow

₹201 Cr

Capex

-₹39 Cr

Shareholding (proxy)

Institutional Holding

3.3%

Insider Holding

63.9%

Corporate Actions

Dividend Rate

₹1.25

Ex-Dividend Date

13 Aug 2026

Analyst Consensus

Recommendations

0 Buy · 1 Hold · 0 Sell

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

3 positive3 general

Should You Buy Ramco Industries Limited (NSE:RAMCOIND) For Its Upcoming Dividend?

Simply Wall Street, 09 AugCapital return

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

Is Ramco Industries the Best Stock in Its Sector? A Look at the Numbers

Univest, 06 Oct

Ramco Industries Share Price Soars Over 13% As Q1 Net Profit Jumps 32%

NDTV Profit, 10 AugResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Volume Gainers of June 25, 2026: Ramco Industries, Somi Conveyor, Onward Technologies Lead

HDFC Sky, 25 Jun

Ramco Industries net profit rises 31% in Q1FY27 to ₹86.59 crore

scanx.trade, 10 AugResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Ramco Industries Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 30 Aug

Watch Items

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

DalalBaazaar Thesis

🟡Business QualityAdequate11.7/20

🟢Financial HealthStrong14.5/20

🟢GrowthStrong13.1/20

🟡ProfitabilityModerate9.4/15

🟢ValuationAttractive13.2/15

🔴RiskHigh4.3/10

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

This thesis breaks if

✓EBITDA margin holds above 12%13.7%
✓Revenue growth stays above 5% a year7.1% CAGR
✓Free cash flow remains positive₹162 Cr
✓Debt / EBITDA stays below 2x0.7x
✗ROCE stays above 8%4.6%