Rex Pipes and Cables Industries Limited

Sector n/a · NSE

₹85.90+₹3.95 (+4.82%)

DalalBaazaar Score

53 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Moderate

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

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

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:00 pm

Understanding the Business

The 60-second version of Rex Pipes and Cables Industries 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 ₹120 Cr a year. Of every ₹100 of sales, about ₹4 reaches shareholders as profit, with ₹9 left at the operating level before interest, tax and depreciation.

What is its competitive advantage?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 22.1%. Returns that high normally get competed away; when they persist, something is protecting them. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +2% while net margin moved +26% 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+2%

Margin effect+26%

DalalBaazaar Score

53/ 100

Moderate

Weighted across six categories. Every point is explained below.

• ROE of 11.3% is moderate
✗ ROE has fallen by 4.5 points over the period

Quality vs. Valuation

Company Quality

53/ 100

Average

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

Valuation

60/ 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.

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

10.6x

PEG

—

What's Good / What's Bad

🟢 What's Going Well2

High return on capital employed
ROCE of 22.1% 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 Attention2

Return on equity is falling
ROE has dropped from 15.8% to 11.3% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 27.4% to 22.1% — often a sign of competition or overexpansion.

Red Flags

3 items require attention · 1 high · 2 watch

🔴Inventory building faster than salesFinancial
Inventory up 124% against revenue up 2% — stock may not be moving.
🟡Debt is increasingFinancial
Total debt is up 45% over 3 years.
🟡Receivables growing faster than salesFinancial
Receivables up 39% against revenue up 2% — 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 22.1% 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.
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 39% against revenue up 2%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Growth barely outpaces inflation
Revenue compounding at 0.7% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
Returns on shareholder capital are falling
ROE has dropped from 15.8% to 11.3%. 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 7%✓ 8.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA stays below 2x✗ 2.9x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
3Interest cover stays above 3x✓ 3.3x
How much operating profit can fall before interest stops being comfortably covered.
4Revenue growth stays above 4% a year✗ 0.7% CAGR
Latest reported year was -13.1%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
5Free cash flow remains positive✓ ₹4 Cr
Profit that never becomes cash eventually stops being profit.

Investment Checklist

4 / 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

2 good · 7 neutral · 2 weak

Market Cap

₹81 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

11.3%

Moderate

Moderate capital efficiency

ROCE

22.1%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.72x

Moderate

Moderate leverage

Revenue Growth (YoY)

-13.1%

Shrinking

Sales are contracting

Profit Growth (YoY)

-9.3%

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

₹4 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Gross Margin

11.7%

Proxy

Operating margin unavailable — showing gross margin instead

Net Margin

3.9%

Average

Average bottom-line conversion

Current Ratio

1.69

Comfortable

Healthy short-term liquidity

Technical Snapshot

SMA 20 / SMA 50

160.6 / 162.8

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

100.0

Overbought zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹118 Cr	₹129 Cr	₹138 Cr	₹120 Cr	+0.7%
EBITDA	₹9 Cr	₹11 Cr	₹11 Cr	₹10 Cr	+4.3%
EBITDA Margin	7.8%	8.7%	8.3%	8.6%	—
PAT (Net Profit)	₹4 Cr	₹5 Cr	₹5 Cr	₹5 Cr	+8.7%
EPS	₹3.83	₹5.02	₹5.42	—	—
ROE	15.8%	15.1%	14.0%	11.3%	—
ROCE	27.4%	28.3%	26.7%	22.1%	—
Total Debt	₹20 Cr	₹28 Cr	₹30 Cr	₹30 Cr	+13.1%
Free Cash Flow	₹3 Cr	₹1 Cr	₹2 Cr	₹4 Cr	+6.2%

🟡 Revenue has been broadly flat over 3 years (0.7% a year).

🟢 EBITDA has grown at 4.3% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 8.6% over 3 years.

🟢 PAT (Net Profit) has grown at 8.7% a year over 3 years.

🔴 ROE has fallen from 15.8% to 11.3% over 3 years (-4.5 pts).

🔴 ROCE has fallen from 27.4% to 22.1% over 3 years (-5.2 pts).

🔴 Total Debt has grown at 13.1% a year over 3 years.

🟢 Free Cash Flow has grown at 6.2% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹82 Cr

Total Liabilities

₹41 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

₹4 Cr

Capex

-₹1 Cr

Recent News

6 general

Compare with

Equitymaster, 18 Oct

REX Pipes and Cables Industries Ltd. Financials – Balance Sheet, Profit & Loss, Cash Flow

Value Research, 31 Aug

Rex Pipes confirms nil encumbrance on promoter shares for FY26

scanx.trade, 06 Jul

Small firms flag price hike in projects using PVC pipes as Centre curbs input imports

The Indian Express, 02 Aug

BHAVIK ENTERPRISES LTD. Stock/Share price , NSE/BSE Forecast News and Live Quotes

Equitymaster, 15 Oct

Pramara Promotions Ltd. Share Price Within 2% of 52W Low

Univest, 17 Aug

Watch Items

Revenue growth is negative (-13.1%) 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 overbought territory — momentum entries here carry more short-term pullback risk.

DalalBaazaar Thesis

StrongFinancial Health

MiddlingBusiness Quality · Growth · Valuation · Risk

WeakProfitability

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

2 of 5 tripwires tripped — Debt / EBITDA stays below 2x; Revenue growth stays above 4% a year · see Key things to watch ↑