Rane Holdings Limited

Consumer Cyclical — Auto Parts · NSE

₹1,554.00+₹19.80 (+1.29%)

DalalBaazaar Score

52 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

High

Driven by short-term liabilities exceed short-term assets, negative free cash flow, micro-cap size, which brings thin liquidity.

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, 7:03 pm

Understanding the Business

Company site ↗

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

What does this company do?

Rane Holdings Limited, together with its subsidiaries, engages in the manufacturing and marketing of automotive components for the transportation industry in India and internationally.

IndustryAuto Parts

SectorConsumer Cyclical

Employees130

Annual revenue₹5,836 Cr

How does it make money?

Turns over ₹5,836 Cr a year. Of every ₹100 of sales, about ₹2 reaches shareholders as profit, with ₹7 left at the operating level before interest, tax and depreciation. Each of its 130 employees supports ₹44.89 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹44.89 Cr

Who are its competitors?

The closest listed comparisons in its industry are BOSCH LIMITED, MARUTI SUZUKI INDIA LTD., TVS MOTOR COMPANY LTD, EICHER MOTORS LTD. 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 14.9% 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 ROE23.0%

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 +69% while net margin moved -7% 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+69%

Margin effect-7%

DalalBaazaar Score

52/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROE of 8.5% is weak

Quality vs. Valuation

Company Quality

54/ 100

Average

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

Valuation

60/ 100

Fair

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

20.9x

40 monthly readings · mean 19.3x · range 6.8x–39.0x

Sector Median

45.7x

median of 4 sector peers

⚠️Current valuation is approximately 26% above its 3y median of 20.9x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

🟢Against its sector it trades 43% below the peer median of 45.7x.

vs. its own history

Expensive

20.9x median over 40 months · +26%

vs. sector peers

Cheap

45.7x median of 4 peers · -43%

vs. generic bands

Fair

15x–35x

EV/EBITDA

7.3x

PEG

1.62

What's Good / What's Bad

🟢 What's Going Well2

Return on capital is rising
ROCE has improved from 12.8% to 14.9%.
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 · 3 watch

🟡Free cash flow is negativeFinancial
Free cash flow was -₹36 Cr in the latest year.
🟡Margins are compressingFinancial
EBITDA margin is down 2.4 points over 3 years.
🟡Short-term liquidity is tightFinancial
Current ratio of 0.88 — near-term obligations exceed near-term assets.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Cheaper than its peers
It trades 43% 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?

Margins are being competed away
EBITDA margin has fallen from 9.9% to 7.5%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The price already assumes success
The stock trades 26% above its own median multiple. At this level the business has to deliver just to stand still, and a stumble is repriced twice — lower earnings on a lower multiple.
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 14% a year✓ 19.1% CAGR
Latest reported year was 18.4%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 5%✓ 7.5%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA stays below 2x✗ 2.3x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4Free cash flow remains positive✗ -₹36 Cr
Profit that never becomes cash eventually stops being profit.
5Interest cover stays above 3x✓ 3.5x
How much operating profit can fall before interest stops being comfortably covered.

Investment Checklist

4 / 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

3 good · 6 neutral · 2 weak

Market Cap

₹2,219 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

1.92x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹59.14

Profitable

Profitable on a per-share basis

ROE

8.5%

Moderate

Moderate capital efficiency

ROCE

14.9%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.72x

Moderate

Moderate leverage

Revenue Growth (YoY)

18.4%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-26.4%

Falling

Profits are shrinking

Dividend Yield

3.02%

Healthy

Meaningful cash return while you hold the stock

Free Cash Flow

-₹36 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

3.3%

Weak

Thin margins leave little room for error

Net Margin

1.4%

Weak

Very little revenue reaches the bottom line

Current Ratio

0.88

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.38

Defensive

Steadier than the market

52W Range Position

63%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

1545.6 / 1610.6

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

43.1

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹3,454 Cr	₹3,480 Cr	₹4,319 Cr	₹5,836 Cr	+19.1%
EBITDA	₹342 Cr	₹408 Cr	₹398 Cr	₹437 Cr	+8.5%
EBITDA Margin	9.9%	11.7%	9.2%	7.5%	—
PAT (Net Profit)	₹62 Cr	₹124 Cr	₹207 Cr	₹98 Cr	+16.3%
EPS	₹43.61	₹86.67	₹145.13	₹68.54	+16.3%
ROE	7.7%	13.7%	18.7%	8.5%	—
ROCE	12.8%	9.5%	23.9%	14.9%	—
Total Debt	₹895 Cr	₹853 Cr	₹1,060 Cr	₹1,021 Cr	+4.5%
Free Cash Flow	₹28 Cr	₹24 Cr	₹289 Cr	-₹36 Cr	—

🟢 Revenue has grown at 19.1% a year over 3 years.

🟢 EBITDA has grown at 8.5% a year over 3 years.

🔴 EBITDA Margin has fallen from 9.9% to 7.5% over 3 years (-2.4 pts).

🟢 PAT (Net Profit) has grown at 16.3% a year over 3 years.

🟢 EPS has grown at 16.3% a year over 3 years.

🟡 ROE has held roughly flat at 8.5% over 3 years.

🟢 ROCE has risen from 12.8% to 14.9% over 3 years (+2.1 pts).

🔴 Total Debt has grown at 4.5% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹28 Cr to -₹36 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹3,843 Cr

Total Liabilities

₹2,418 Cr

Cash & Equivalents

₹53 Cr

Operating Cash Flow

₹280 Cr

Capex

-₹316 Cr

Shareholding (proxy)

Institutional Holding

2.4%

Insider Holding

57.2%

Corporate Actions

Dividend Rate

₹47

Ex-Dividend Date

06 Aug 2026

Peer Comparison

Company	P/E	ROE
BOSCH LIMITED	56.9x	15.9%
MARUTI SUZUKI INDIA LTD.	25.2x	13.4%
TVS MOTOR COMPANY LTD	56.8x	35.8%
EICHER MOTORS LTD	34.7x	23.0%

Recent News

1 positive5 general

Is Rane Holdings the Best Stock in Its Sector? A Look at the Numbers

Univest, 06 Oct

Rane Holdings allocates 3,38,030 warrants to promoters for ₹10 crore

scanx.trade, 26 Jul

Rane Holdings Q4 Net Profit Surges 687% to ₹740 Million Against ₹94 Million YoY

Sahi, 15 MayResults

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

Rane Holdings (RANEHOLDIN.NS) Ticks Higher to ₹1,704.8 as Stock Holds Above Key Support - Volatility Surface

siam.in, 10 Sept

Market Trading Guide: Netweb Technologies, Rane Holdings among 5 stock recommendations for Wednesday

The Economic Times, 16 Jun

Rane Holdings Ltd is Rated Sell

MarketsMojo, 12 Oct

Watch Items

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

DalalBaazaar Thesis

StrongGrowth

MiddlingBusiness Quality · Valuation

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