REDTAPE Limited

Consumer Cyclical — Footwear & Accessories · NSE

₹114.90+₹2.08 (+1.84%)

DalalBaazaar Score

68 / 100

🟢 Good

Verdict

REASONABLE

Risk

Low

Driven by small-cap size, which brings sharper price swings.

In simple words: Strong business and financial position, with modest growth. Nothing on this snapshot stands out as an immediate concern — the usual checks on business quality and management still apply.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 8:27 pm

Understanding the Business

Company site ↗

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

What does this company do?

REDTAPE Limited engages in the retail sale of footwear, garments, accessories and allied products in India and internationally.

IndustryFootwear & Accessories

SectorConsumer Cyclical

Employees660

Annual revenue₹2,416 Cr

How does it make money?

Turns over ₹2,416 Cr a year. Of every ₹100 of sales, about ₹10 reaches shareholders as profit, with ₹20 left at the operating level before interest, tax and depreciation. Each of its 660 employees supports ₹3.66 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹3.66 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?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 29.5%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 23.6% against a peer median of 25.9% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

Peer median ROE25.9%

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 +66% while net margin moved +2% 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+66%

Margin effect+2%

DalalBaazaar Score

68/ 100

Good

Weighted across six categories. Every point is explained below.

• P/E of 25.8x already prices in growth
✓ P/E is 44% below its own historical median of 45.8x — cheap by its own standards
✗ P/B of 6.22x is a steep premium to book

Quality vs. Valuation

Company Quality

71/ 100

Good

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

Valuation

72/ 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

25.8x

3Y Median

45.8x

40 monthly readings · mean 125.8x · range 26.2x–303.2x

Sector Median

69.2x

median of 4 sector peers

🟢Current valuation is approximately 44% below its 3y median of 45.8x. 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 63% below the peer median of 69.2x.

vs. its own history

Cheap

45.8x median over 40 months · -44%

vs. sector peers

Cheap

69.2x median of 4 peers · -63%

vs. generic bands

Fair

15x–35x

EV/EBITDA

14.8x

PEG

1.35

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 16.9% to 19.7% over 3 years.
Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
High return on capital employed
ROCE of 29.5% is the mark of a business that converts capital into profit efficiently.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Return on equity is falling
ROE has dropped from 29.8% to 23.6% — each rupee of shareholder capital earns less than it did.

Red Flags

2 items require attention · 2 high

🔴Debt has risen sharplyFinancial
Total debt is up 177% over 3 years, from ₹260 Cr to ₹720 Cr.
🔴Receivables growing faster than salesFinancial
Receivables up 150% against revenue up 66% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 29.5% 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 16.9% to 19.7%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 44% 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 63% 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?

Sales are being booked faster than collected
Receivables are up 150% against revenue up 66%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Returns on shareholder capital are falling
ROE has dropped from 29.8% to 23.6%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
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.
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

1Revenue growth stays above 14% a year✓ 18.3% CAGR
Latest reported year was 6.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 18%✓ 19.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✓ ₹88 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.5x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 26%✓ 29.5%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

9 / 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

5 good · 5 neutral · 1 weak

Market Cap

₹6,352 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

25.8x

Fair

Fairly valued against the generic band

P/B Ratio

6.22x

Rich

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

EPS (TTM)

₹4.45

Profitable

Profitable on a per-share basis

ROE

23.6%

Strong

Strong capital efficiency

ROCE

29.5%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.70x

Moderate

Moderate leverage

Revenue Growth (YoY)

6.9%

Modest

Modest growth

Profit Growth (YoY)

14.3%

Healthy

Profits growing at a healthy clip

Dividend Yield

1.74%

Modest

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

Free Cash Flow

₹88 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

15.1%

Good

Healthy core-business profitability

Net Margin

9.8%

Average

Average bottom-line conversion

Current Ratio

1.57

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.14

Defensive

Steadier than the market

52W Range Position

14%

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

116.0 / 120.2

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

26.8

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1,459 Cr	₹1,832 Cr	₹2,018 Cr	₹2,416 Cr	+18.3%
EBITDA	₹247 Cr	₹331 Cr	₹348 Cr	₹477 Cr	+24.5%
EBITDA Margin	16.9%	18.1%	17.2%	19.7%	—
PAT (Net Profit)	₹142 Cr	₹176 Cr	₹170 Cr	₹241 Cr	+19.2%
EPS	₹2.57	₹3.19	₹3.08	₹4.35	+19.2%
ROE	29.8%	27.2%	21.6%	23.6%	—
ROCE	30.2%	27.7%	25.1%	29.5%	—
Total Debt	₹260 Cr	₹480 Cr	₹724 Cr	₹720 Cr	+40.4%
Free Cash Flow	-₹19 Cr	-₹35 Cr	-₹109 Cr	₹88 Cr	—

🟢 Revenue has grown at 18.3% a year over 3 years.

🟢 EBITDA has grown at 24.5% a year over 3 years.

🟢 EBITDA Margin has risen from 16.9% to 19.7% over 3 years (+2.8 pts).

🟢 PAT (Net Profit) has grown at 19.2% a year over 3 years.

🟢 EPS has grown at 19.2% a year over 3 years.

🔴 ROE has fallen from 29.8% to 23.6% over 3 years (-6.3 pts).

🟡 ROCE has held roughly flat at 29.5% over 3 years.

🔴 Total Debt has grown at 40.4% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹19 Cr to ₹88 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹2,306 Cr

Total Liabilities

₹1,284 Cr

Cash & Equivalents

₹9 Cr

Operating Cash Flow

₹174 Cr

Capex

-₹86 Cr

Shareholding (proxy)

Institutional Holding

14.1%

Insider Holding

72.2%

Corporate Actions

Dividend Rate

₹2

Ex-Dividend Date

31 Jul 2026

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

2 positive2 mixed2 general

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

Univest, 06 Oct

Here's Why REDTAPE (NSE:REDTAPE) Has Caught The Eye Of Investors

Simply Wall Street, 03 Jun

Redtape shares jump 18% on strong Q4; PAT up 70% YoY, margins expand

Business Standard, 26 MayPrice 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.

Redtape AGM approves ₹2 dividend, reappoints Mirza family directors

scanx.trade, 25 AugCapital return

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

Redtape Declares ₹2.00 Final Dividend; Shares Closed 3.58% Higher in Previous Session

TradingView, 29 JulCapital return

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

Redtape Q4 Results: Footwear maker sees 33% revenue growth, margin expands; Stock surges 14%

CNBC TV18, 26 MayResults

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

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

StrongBusiness Quality · Financial Health · Growth · Risk

MiddlingProfitability · Valuation

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. 2 high-severity red flags sit above this conclusion and should be read first.

All 5 tripwires holding · see Key things to watch ↑