Rexnord Electronics and Controls Limited

Industrials — Specialty Industrial Machinery · BSE

₹107.50+₹1.92 (+1.82%)

DalalBaazaar Score

49 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Low

Driven by micro-cap size, which brings thin liquidity.

In simple words: The business is earning a fairly low return on the money invested in it, 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, 6:10 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 Rexnord Electronics and Controls Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Rexnord Electronics and Controls Limited manufactures and sells instrument cooling fans and motors for industrial purposes in India.

IndustrySpecialty Industrial Machinery

SectorIndustrials

Employees123

Annual revenue₹117 Cr

How does it make money?

Turns over ₹117 Cr a year. Of every ₹100 of sales, about ₹4 reaches shareholders as profit, with ₹15 left at the operating level before interest, tax and depreciation. Each of its 123 employees supports ₹95.5 lakh of revenue a year, the signature of a people-led business.

EBITDA margin15.5%

Net margin4.2%

Revenue / employee₹95.5 lakh

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 8.4% 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.

ROCE8.4%

ROE5.1%

Peer median ROE17.1%

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +33% while net margin moved -42% 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+33%

Margin effect-42%

DalalBaazaar Score

49/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROE of 5.1% is weak
✗ ROE has fallen by 6.1 points over the period

Quality vs. Valuation

Company Quality

45/ 100

Average

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

Valuation

59/ 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

24.4x

3Y Median

20.0x

40 monthly readings · mean 20.3x · range 12.3x–29.0x

Sector Median

66.2x

median of 4 sector peers

⚠️Current valuation is approximately 22% above its 3y median of 20.0x. 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 63% below the peer median of 66.2x.

vs. its own history

Expensive

20.0x median over 40 months · +22%

vs. sector peers

Cheap

66.2x median of 4 peers · -63%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

24.4x

P/B

1.47x

EV/EBITDA

8.9x

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well3

Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
Very low debt
Debt/Equity of 0.22x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention6

Debt is rising
Total debt is up 71% over 3 years — worth checking what it funded.
Return on equity is falling
ROE has dropped from 11.2% to 5.1% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 15.0% to 8.4% — often a sign of competition or overexpansion.
Receivables growing faster than sales
Receivables are up 74% against revenue growth of 33% — customers are taking longer to pay.
Inventory building faster than sales
Inventory is up 65% against revenue growth of 33% — stock may not be moving.
Valuation above its historical average
At 24.4x the stock trades 22% above its own median of 20.0x.

Red Flags

4 items require attention · 1 high · 3 watch

🔴Debt has risen sharplyFinancial
Total debt is up 71% over 3 years, from ₹13 Cr to ₹22 Cr.
🟡Profit is decliningFinancial
Net profit is down 23% over 3 years.
🟡Receivables growing faster than salesFinancial
Receivables up 74% against revenue up 33% — sales are being booked faster than they are collected.
🟡Inventory building faster than salesFinancial
Inventory up 65% against revenue up 33% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

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.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹8 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.
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 74% against revenue up 33%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
The price already assumes success
The stock trades 22% 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.
Returns on shareholder capital are falling
ROE has dropped from 11.2% to 5.1%. 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
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

1EBITDA margin holds above 13%✓ 15.5%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Revenue growth stays above 7% a year✓ 10.0% CAGR
Latest reported year was 8.1%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
3Free cash flow remains positive✓ ₹8 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.2x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 8%✓ 8.4%
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

5 good · 5 neutral · 1 weak

Market Cap

₹143 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

24.4x

Fair

Fairly valued against the generic band

P/B Ratio

1.47x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹4.41

Profitable

Profitable on a per-share basis

ROE

5.1%

Weak

Weak capital efficiency

ROCE

8.4%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.22x

Low

Conservative leverage

Revenue Growth (YoY)

8.1%

Modest

Modest growth

Profit Growth (YoY)

60.3%

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

₹8 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹107.5

P/E (Forward)

28.8x

Flat

At or above the trailing multiple — no earnings uplift is being priced in

Operating Margin

10.6%

Average

Average margins

Net Margin

4.7%

Average

Average bottom-line conversion

Current Ratio

2.16

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.09

Defensive

Steadier than the market

52W Range Position

81%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

101.8 / 91.0

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

51.3

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹88 Cr	₹96 Cr	₹108 Cr	₹117 Cr	+10.0%
EBITDA	₹14 Cr	₹15 Cr	₹16 Cr	₹18 Cr	+8.7%
EBITDA Margin	16.0%	15.7%	15.0%	15.5%	—
PAT (Net Profit)	₹6 Cr	₹7 Cr	₹5 Cr	₹5 Cr	-8.2%
EPS	₹5.69	₹6.4	₹4.06	₹3.71	-13.3%
ROE	11.2%	10.6%	5.4%	5.1%	—
ROCE	15.0%	14.8%	8.5%	8.4%	—
Total Debt	₹13 Cr	₹15 Cr	₹36 Cr	₹22 Cr	+19.6%
Free Cash Flow	-₹2 Cr	-₹2 Cr	-₹24 Cr	₹8 Cr	—

🟢 Revenue has grown at 10.0% a year over 3 years.

🟢 EBITDA has grown at 8.7% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 15.5% over 3 years.

🔴 PAT (Net Profit) has shrunk at 8.2% a year over 3 years.

🔴 EPS has shrunk at 13.3% a year over 3 years.

🔴 ROE has fallen from 11.2% to 5.1% over 3 years (-6.1 pts).

🔴 ROCE has fallen from 15.0% to 8.4% over 3 years (-6.6 pts).

🔴 Total Debt has grown at 19.6% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹2 Cr to ₹8 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹137 Cr

Total Liabilities

₹40 Cr

Total Debt

₹22 Cr

Cash & Equivalents

₹4 Cr

Operating Cash Flow

₹16 Cr

Capex

-₹8 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

77.8%

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

1 mixed5 general

Rexnord Electronics & Controls Share Price Rise Versus Peers

Univest, 07 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.

Rexnord Electronics submits scrutinizer report for 38th AGM

scanx.trade, 06 Oct

Rexnord Electronics & Controls Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 30 Aug

Rexnord Electronics & Controls Ltd is Rated Hold

MarketsMojo, 06 Oct

Rexnord Electronics & Controls (BSE:REXNORD): Motors & Fans

Kalkine India, 13 Sept

Rexnord Electronics sells subsidiary REPL for ₹5.5 crore

scanx.trade, 24 Sept

Watch Items

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

DalalBaazaar Thesis

🔴Business QualityWeak7.5/20

🟢Financial HealthStrong14.4/20

🔴GrowthWeak7.7/20

🔴ProfitabilityWeak4.6/15

🟡ValuationFair8.7/15

🟡RiskModerate6.2/10

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 13%15.5%
✓Revenue growth stays above 7% a year10.0% CAGR
✓Free cash flow remains positive₹8 Cr
✓Debt / EBITDA stays below 2x1.2x
✓ROCE stays above 8%8.4%