ResGen Limited

Industrials — Waste Management · BSE

₹46.25₹0.00 (0.00%)

DalalBaazaar Score

72 / 100

🟢 Good

Verdict

REASONABLE

Risk

High

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

In simple words: Strong business and financial position, but sales are shrinking. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:06 pm

Mixed / neutral. No major red flags jump out, but nothing here screams "obviously cheap" either. This is a name that needs a peer comparison and a view on near-term earnings triggers before sizing a position.

Understanding the Business

Company site ↗

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

What does this company do?

ResGen Limited engages in the manufacture and sale of pyrolysis oil and carbon from plastic waste and plastic scrap in India. The company's pyrolysis oil is a substitute for furnace oil. It also produces by-products, such as carbon and gas; and sells valves.

IndustryWaste Management

SectorIndustrials

Employees12

Annual revenue₹71 Cr

How does it make money?

Turns over ₹71 Cr a year. Of every ₹100 of sales, about ₹14 reaches shareholders as profit, with ₹22 left at the operating level before interest, tax and depreciation. Each of its 12 employees supports ₹5.92 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin22.1%

Net margin14.3%

Revenue / employee₹5.92 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?Some evidence

ROCE of 18.7% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

ROCE18.7%

ROE16.3%

Peer median ROE15.2%

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 +202% while net margin moved -19% 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+202%

Margin effect-19%

DalalBaazaar Score

72/ 100

Good

Weighted across six categories. Every point is explained below.

• Beta of 0.90 — moves roughly with the market
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ High leverage magnifies any downturn in earnings

Quality vs. Valuation

Company Quality

74/ 100

Good

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

Valuation

88/ 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

9.5x

3Y Median

22.8x

40 monthly readings · mean 23.6x · range 9.0x–52.2x

Sector Median

88.8x

median of 3 sector peers

🟢Current valuation is approximately 58% below its 3y median of 22.8x. 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 89% below the peer median of 88.8x.

vs. its own history

Cheap

22.8x median over 40 months · -58%

vs. sector peers

Cheap

88.8x median of 3 peers · -89%

vs. generic bands

Cheap

Below 15x

P/E (Trailing)

9.5x

P/B

1.43x

EV/EBITDA

6.1x

PEG

0.27

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well6

Debt is being paid down
Total debt is down 88% 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 9.7% to 15.0%.
Return on capital is rising
ROCE has improved from 14.2% to 18.7%.
Valuation below its historical average
At 9.5x the stock trades 58% below its own median of 22.8x.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Margins are compressing
EBITDA margin has slipped from 43.9% to 22.1% over 3 years.

Red Flags

3 items require attention · 3 high

🔴High leverageFinancial
Debt/Equity of 2.12x — earnings must service borrowings before shareholders see anything.
🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 21.9 points, from 43.9% to 22.1%.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 18.7% 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.
Deleveraging frees up earnings
Debt is down 88% 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 58% 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 89% 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 43.9% to 22.1%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Leverage amplifies any setback
Debt/Equity of 2.12x. Interest is payable whether or not the business has a good year.
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
3 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 33% a year✓ 44.6% CAGR
Latest reported year was -15.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 20%✓ 22.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✓ ₹4 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.1x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 16%✓ 18.7%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

8 / 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

7 good · 2 neutral · 2 weak

Market Cap

₹97 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

9.5x

Cheap

Cheap against the generic band

P/B Ratio

1.43x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹4.86

Profitable

Profitable on a per-share basis

ROE

16.3%

Strong

Strong capital efficiency

ROCE

18.7%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

2.12x

High

High leverage

Revenue Growth (YoY)

-15.9%

Shrinking

Sales are contracting

Profit Growth (YoY)

49.3%

Healthy

Profits growing at a healthy clip

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

₹2 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹46.25

ROA

9.5%

Good

Assets are working hard

Operating Margin

17.1%

Good

Healthy core-business profitability

Net Margin

14.3%

Good

Strong bottom-line conversion

Current Ratio

7.17

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.90

Market-like

Moves roughly in line with the market

52W Range Position

11%

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

45.6 / 45.9

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

51.0

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹24 Cr	₹46 Cr	₹65 Cr	₹71 Cr	+44.6%
EBITDA	₹10 Cr	₹15 Cr	₹15 Cr	₹16 Cr	+14.9%
EBITDA Margin	43.9%	34.0%	23.7%	22.1%	—
PAT (Net Profit)	₹4 Cr	₹7 Cr	₹8 Cr	₹10 Cr	+34.7%
EPS	₹3.04	₹3.13	₹3.8	₹4.86	+16.9%
ROE	9.7%	13.2%	13.8%	15.0%	—
ROCE	14.2%	19.0%	19.4%	18.7%	—
Total Debt	₹12 Cr	₹9 Cr	₹5 Cr	₹1 Cr	-50.0%
Free Cash Flow	-₹23 Cr	-₹4 Cr	₹6 Cr	₹4 Cr	—

🟢 Revenue has grown at 44.6% a year over 3 years.

🟢 EBITDA has grown at 14.9% a year over 3 years.

🔴 EBITDA Margin has fallen from 43.9% to 22.1% over 3 years (-21.9 pts).

🟢 PAT (Net Profit) has grown at 34.7% a year over 3 years.

🟢 EPS has grown at 16.9% a year over 3 years.

🟢 ROE has risen from 9.7% to 15.0% over 3 years (+5.4 pts).

🟢 ROCE has risen from 14.2% to 18.7% over 3 years (+4.6 pts).

🟢 Total Debt has shrunk at 50.0% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹23 Cr to ₹4 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹75 Cr

Total Liabilities

₹7 Cr

Total Debt

₹1 Cr

Cash & Equivalents

₹2 Cr

Operating Cash Flow

₹4 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

70.3%

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

1 positive5 general

ResGen Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 05 Sept

2 IPOs to open for public subscription this week. GMP, key details to know

Livemint, 27 Feb

Resgen revenue up 9.1% in FY26 to ₹7,107.84 lakh; debt-free

scanx.trade, 03 SeptResults

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

3 Little Known Stocks Involved in the Futuristic Plastic Recycling Industry

Equitymaster, 23 Nov

ResGen Limited Shifts Strategy: Acquires Assets for Tyre Pyrolysis Business

scanx.trade, 04 Sept

Noble ousts ResGen board

The Australian, 27 Nov

Watch Items

Revenue growth is negative (-15.9%) 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.

DalalBaazaar Thesis

🟢Business QualityStrong15.8/20

🟢Financial HealthStrong14.5/20

🟡GrowthModest12.9/20

🟢ProfitabilityStrong12/15

🟢ValuationAttractive13.2/15

🔴RiskHigh3.5/10

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

This thesis breaks if

✓Revenue growth stays above 33% a year44.6% CAGR
✓EBITDA margin holds above 20%22.1%
✓Free cash flow remains positive₹4 Cr
✓Debt / EBITDA stays below 2x0.1x
✓ROCE stays above 16%18.7%