Refractory Shapes Limited

Sector n/a · NSE

₹203.15−₹10.65 (−4.98%)

DalalBaazaar Score

56 / 100

🟡 Moderate

Verdict

CAUTION

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, but sales are shrinking. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:46 pm

Understanding the Business

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

How does it make money?

Turns over ₹57 Cr a year. Of every ₹100 of sales, about ₹8 reaches shareholders as profit, with ₹15 left at the operating level before interest, tax and depreciation.

What is its competitive advantage?Little sign of one

Returns on capital of 11.7% 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.

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +50% while net margin moved +66% 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+50%

Margin effect+66%

DalalBaazaar Score

56/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ 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

61/ 100

Average

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

Valuation

18/ 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.

vs. its own history

Not enough price and earnings history

vs. sector peers

Not enough peers with a usable P/E

vs. generic bands

No P/E available

EV/EBITDA

52.4x

PEG

—

What's Good / What's Bad

🟢 What's Going Well2

Margins are improving
EBITDA margin is up from 12.0% to 15.3% over 3 years.
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

2 items require attention · 2 high

🔴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.
🔴Inventory building faster than salesFinancial
Inventory up 156% against revenue up 50% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 12.0% to 15.3%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
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?

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

1Revenue growth stays above 11% a year✓ 14.5% CAGR
Latest reported year was -2.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 13%✓ 15.3%
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✗ -₹0 Cr
Profit that never becomes cash eventually stops being profit.
5ROCE stays above 9%✓ 11.7%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

3 / 9 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
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

1 good · 7 neutral · 3 weak

Market Cap

₹443 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

Not available

No data

Source didn't return this field

P/B Ratio

Not available

No data

Source didn't return this field

EPS (TTM)

Not available

No data

Source didn't return this field

ROE

9.5%

Moderate

Moderate capital efficiency

ROCE

11.7%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.39x

Low

Conservative leverage

Revenue Growth (YoY)

-2.9%

Shrinking

Sales are contracting

Profit Growth (YoY)

-23.4%

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

-₹0 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Gross Margin

31.5%

Proxy

Operating margin unavailable — showing gross margin instead

Net Margin

8.4%

Average

Average bottom-line conversion

Current Ratio

2.56

Comfortable

Healthy short-term liquidity

Technical Snapshot

SMA 20 / SMA 50

36.1 / 30.2

Bullish alignment (short > long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

29.9

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹38 Cr	₹41 Cr	₹59 Cr	₹57 Cr	+14.5%
EBITDA	₹5 Cr	₹7 Cr	₹13 Cr	₹9 Cr	+24.0%
EBITDA Margin	12.0%	17.5%	22.2%	15.3%	—
PAT (Net Profit)	₹2 Cr	₹4 Cr	₹6 Cr	₹5 Cr	+35.7%
EPS	₹0.88	₹1.91	₹2.87	—	—
ROE	11.5%	20.0%	13.7%	9.5%	—
ROCE	13.4%	20.8%	15.6%	11.7%	—
Total Debt	₹20 Cr	₹24 Cr	₹17 Cr	₹20 Cr	-1.0%
Free Cash Flow	-₹3 Cr	-₹5 Cr	-₹9 Cr	-₹0 Cr	—

🟢 Revenue has grown at 14.5% a year over 3 years.

🟢 EBITDA has grown at 24.0% a year over 3 years.

🟢 EBITDA Margin has risen from 12.0% to 15.3% over 3 years (+3.2 pts).

🟢 PAT (Net Profit) has grown at 35.7% a year over 3 years.

🔴 ROE has fallen from 11.5% to 9.5% over 3 years (-2.0 pts).

🔴 ROCE has fallen from 13.4% to 11.7% over 3 years (-1.7 pts).

🟡 Total Debt has been broadly flat over 3 years (-1.0% a year).

Balance Sheet & Cash Flow — FY2026

Total Assets

₹77 Cr

Total Liabilities

₹27 Cr

Cash & Equivalents

₹7 Cr

Operating Cash Flow

₹1 Cr

Capex

-₹2 Cr

Recent News

1 positive5 general

REFRACTORY SHAPES LIMITED Share Price

Upstox, 05 May

Refractories Market Size, Share, Trends, Growth Report, 2034

Fortune Business Insights, 28 Sept

Refractory Shapes Ltd Key Financial Ratios – Valuation, Profitability & More

Value Research, 31 Aug

Refractory Shapes FY26 net profit falls, order book at ₹80 Crores

scanx.trade, 26 MayOrder win

🟢Potentially positiveOrder wins add to future revenue, though the effect depends on the contract's size against annual sales and on when it is executed.

Orient Ceratech Share Price News: Price, Valuation, Peers

Univest, 20 Aug

Refractory Shapes (NSEI:REFRACTORY) - Stock Analysis

Simply Wall Street, 14 May

Watch Items

Revenue growth is negative (-2.9%) on the latest reported period — check if this is one-off or a trend.
Cross-check against the company's latest quarterly filing / investor presentation before acting.
Sector/industry classification unavailable — verify manually for peer comparison.
3 metrics couldn't be retrieved for this stock — this is more common for smaller or thinly-covered listings.
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

StrongFinancial Health · Growth

MiddlingBusiness Quality · Valuation

WeakProfitability · 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 stays below 2x; Free cash flow remains positive · see Key things to watch ↑