Raymond Limited

Industrials — Specialty Industrial Machinery · NSE

₹1,125.00−₹17.10 (−1.50%)

DalalBaazaar Score

50 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

Driven by negative free cash flow, small-cap size, which brings sharper price swings, a very high earnings multiple, which leaves little margin for disappointment.

In simple words: The business is earning a fairly low return on the money invested in it, 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, 6:08 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 Raymond Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Raymond Limited engages in the engineering businesses in India. It operates through Precision technology and auto component; Aerospace and defence; and Others segments. The company also engages non-scheduled airline operations.

IndustrySpecialty Industrial Machinery

SectorIndustrials

Employees42

Annual revenue₹2,124 Cr

How does it make money?

Turns over ₹2,124 Cr a year. Of every ₹100 of sales, about ₹251 reaches shareholders as profit, with ₹14 left at the operating level before interest, tax and depreciation. Each of its 42 employees supports ₹50.58 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin13.8%

Net margin251.4%

Revenue / employee₹50.58 Cr

Who are its competitors?

The closest listed comparisons in its industry are SIEMENS LTD, ABB INDIA LIMITED, LARSEN & TOUBRO LTD., HAVELLS INDIA LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

SIEMENS LTDP/E 88.8x · ROE 10.5%

ABB INDIA LIMITEDP/E 92.6x · ROE 19.1%

LARSEN & TOUBRO LTD.P/E 30.1x · ROE 15.2%

HAVELLS INDIA LIMITEDP/E 43.5x · ROE 17.1%

What is its competitive advantage?Little sign of one

Returns on capital of -0.6% 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.

ROCE-0.6%

ROE187.8%

Peer median ROE17.1%

What is the outlook?

2 analysts covering the stock expect revenue to grow about 13.6% and earnings to grow about 32.5% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+13.6%

Est. earnings growth+32.5%

Analysts2

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -74% while net margin moved +3757% 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-74%

Margin effect+3757%

DalalBaazaar Score

50/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ P/E of 159.3x is demanding — it needs sustained high growth to justify
✗ P/E is 2695% above its own historical median of 5.7x — expensive by its own standards

Quality vs. Valuation

Company Quality

54/ 100

Average

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

Valuation

33/ 100

Expensive

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

159.3x

3Y Median

5.7x

40 monthly readings · mean 9.3x · range 0.3x–36.8x

Sector Median

66.2x

median of 4 sector peers

⚠️Current valuation is approximately 2695% above its 3y median of 5.7x. 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 141% above the peer median of 66.2x.

vs. its own history

Expensive

5.7x median over 40 months · +2695%

vs. sector peers

Expensive

66.2x median of 4 peers · +141%

vs. generic bands

Expensive

Above 35x

P/E (Trailing)

159.3x

P/B

2.63x

EV/EBITDA

28.6x

PEG

1.37

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well3

Debt is being paid down
Total debt is down 58% over 3 years.
Return on equity is rising
ROE has improved from 18.2% to 187.8%.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention4

Margins are compressing
EBITDA margin has slipped from 16.3% to 13.8% over 3 years.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Return on capital is falling
ROCE has declined from 22.4% to -0.6% — often a sign of competition or overexpansion.
Valuation above its historical average
At 159.3x the stock trades 2695% above its own median of 5.7x.

Red Flags

4 items require attention · 1 high · 3 watch

🔴Thin interest coverageFinancial
Operating profit covers interest only -0.3x — little room if earnings dip.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 2.2x to -0.3x.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹72 Cr in the latest year.
🟡Margins are compressingFinancial
EBITDA margin is down 2.5 points over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Deleveraging frees up earnings
Debt is down 58% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
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 16.3% to 13.8%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The debt load needs earnings to hold up
Debt is 3.6x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
The price already assumes success
The stock trades 2695% 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
Small 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%✓ 13.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 3.6x
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✗ -₹72 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✗ -0.3x
How much operating profit can fall before interest stops being comfortably covered.
5ROCE stays above 8%✗ -0.6%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

7 / 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

4 good · 3 neutral · 4 weak

Market Cap

₹7,487 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

159.3x

Expensive

Expensive — verify against sector peers

P/B Ratio

2.63x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹7.06

Profitable

Profitable on a per-share basis

ROE

187.8%

Strong

Strong capital efficiency

ROCE

-0.6%

Weak

Low return on total capital employed

Debt/Equity

0.34x

Low

Conservative leverage

Revenue Growth (YoY)

15.5%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-99.6%

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

-₹72 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹1,125

P/E (Forward)

66.6x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

6.5%

Average

Average margins

Net Margin

1.6%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.72

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.42

Defensive

Steadier than the market

52W Range Position

79%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

1170.3 / 896.3

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

42.7

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹8,112 Cr	₹930 Cr	₹1,861 Cr	₹2,124 Cr	-36.0%
EBITDA	₹1,325 Cr	₹318 Cr	₹238 Cr	₹294 Cr	-39.5%
EBITDA Margin	16.3%	34.2%	12.8%	13.8%	—
PAT (Net Profit)	₹529 Cr	₹1,638 Cr	₹7,631 Cr	₹5,341 Cr	+116.1%
EPS	₹79.45	₹246.07	₹1,145.99	₹802.31	+116.1%
ROE	18.2%	35.5%	205.4%	187.8%	—
ROCE	22.4%	1.0%	3.0%	-0.6%	—
Total Debt	₹2,530 Cr	₹4,182 Cr	₹740 Cr	₹1,064 Cr	-25.1%
Free Cash Flow	₹688 Cr	₹326 Cr	₹75 Cr	-₹72 Cr	—

🔴 Revenue has shrunk at 36.0% a year over 3 years.

🔴 EBITDA has shrunk at 39.5% a year over 3 years.

🔴 EBITDA Margin has fallen from 16.3% to 13.8% over 3 years (-2.5 pts).

🟢 PAT (Net Profit) has grown at 116.1% a year over 3 years.

🟢 EPS has grown at 116.1% a year over 3 years.

🟢 ROE has risen from 18.2% to 187.8% over 3 years (+169.6 pts).

🔴 ROCE has fallen from 22.4% to -0.6% over 3 years (-23.0 pts).

🟢 Total Debt has shrunk at 25.1% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹688 Cr to -₹72 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹4,738 Cr

Total Liabilities

₹1,620 Cr

Total Debt

₹1,064 Cr

Cash & Equivalents

₹135 Cr

Operating Cash Flow

₹42 Cr

Capex

-₹114 Cr

Shareholding (proxy)

Institutional Holding

8.3%

Insider Holding

51.2%

Corporate Actions

Ex-Dividend Date

13 Jun 2024

Analyst Consensus

Recommendations

2 Buy · 0 Hold · 0 Sell

Target Price (Mean)

₹1,240

+10.2% vs CMP

Target Range

₹1,230 – ₹1,250

Peer Comparison

Company	P/E	ROE
SIEMENS LTD	88.8x	10.5%
ABB INDIA LIMITED	92.6x	19.1%
LARSEN & TOUBRO LTD.	30.1x	15.2%
HAVELLS INDIA LIMITED	43.5x	17.1%

Recent News

4 mixed2 general

Raymond shares jump 10% to hit record high; Raymond Realty gains 7%: What analysts say

Business Today, 05 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.

240% rally in six months! Defence stock Raymond hits 52-week high; exit or hold? Explained with target, stop-loss, ratio

Livemint, 25 Sept

Raymond surges 20% on huge volume; here's why stock rose 66% in 11 days

Business Standard, 11 Sept

Raymond shares rise on expanding aerospace capabilities with entry into aircraft structures segment

Upstox, 23 SeptPrice 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.

Raymond Share Price Fall Streak and Valuation View

Univest, 08 OctPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Raymond James lowers UnitedHealth stock price target to $450 on valuation

Investing.com India, 15 OctAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Watch Items

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

DalalBaazaar Thesis

🔴Business QualityWeak7.5/20

🟡Financial HealthAdequate12.1/20

🟡GrowthModest10.5/20

🟢ProfitabilityStrong10.6/15

🔴ValuationDemanding4.9/15

🟡RiskModerate4.5/10

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

This thesis breaks if

✓EBITDA margin holds above 12%13.8%
✗Debt / EBITDA falls below 3x3.6x
✗Free cash flow remains positive-₹72 Cr
✗Interest cover stays above 3x-0.3x
✗ROCE stays above 8%-0.6%