Rachana Infrastructure Limited

Sector n/a · NSE

₹65.55+₹3.10 (+4.96%)

DalalBaazaar Score

63 / 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, with both sales and profits growing well. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:03 pm

Understanding the Business

The 60-second version of Rachana Infrastructure 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 ₹138 Cr a year. Of every ₹100 of sales, about ₹7 reaches shareholders as profit, with ₹14 left at the operating level before interest, tax and depreciation.

What is its competitive advantage?Some evidence

ROCE of 16.1% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +117% while net margin moved +106% 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+117%

Margin effect+106%

DalalBaazaar Score

63/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ High leverage magnifies any downturn in earnings
✗ Profits have swung sharply from year to year — earnings are hard to forecast

Quality vs. Valuation

Company Quality

71/ 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.

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

6.2x

PEG

—

What's Good / What's Bad

🟢 What's Going Well6

Margins are improving
EBITDA margin is up from 11.1% to 14.1% over 3 years.
Debt is being paid down
Total debt is down 50% 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 2.5% to 9.4%.
Return on capital is rising
ROCE has improved from 4.8% to 16.1%.
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 · 1 high · 1 watch

🔴High leverageFinancial
Debt/Equity of 5.39x — earnings must service borrowings before shareholders see anything.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 6.7x to 4.2x.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 11.1% to 14.1%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Deleveraging frees up earnings
Debt is down 50% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
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?

Leverage amplifies any setback
Debt/Equity of 5.39x. Interest is payable whether or not the business has a good year.
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.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 22% a year✓ 29.5% CAGR
Latest reported year was 46.5%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 12%✓ 14.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✓ ₹10 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.3x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 13%✓ 16.1%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

5 / 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

4 good · 6 neutral · 1 weak

Market Cap

₹122 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

9.4%

Moderate

Moderate capital efficiency

ROCE

16.1%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

5.39x

High

High leverage

Revenue Growth (YoY)

46.5%

Healthy

Healthy top-line growth

Profit Growth (YoY)

146.8%

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

₹10 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Gross Margin

22.1%

Proxy

Operating margin unavailable — showing gross margin instead

Net Margin

7.3%

Average

Average bottom-line conversion

Current Ratio

5.81

Comfortable

Healthy short-term liquidity

Technical Snapshot

SMA 20 / SMA 50

32.7 / 34.4

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

49.0

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹64 Cr	₹91 Cr	₹94 Cr	₹138 Cr	+29.5%
EBITDA	₹7 Cr	₹9 Cr	₹15 Cr	₹19 Cr	+40.0%
EBITDA Margin	11.1%	9.6%	15.6%	14.1%	—
PAT (Net Profit)	₹2 Cr	₹4 Cr	₹4 Cr	₹10 Cr	+64.8%
EPS	₹1.22	₹1.95	₹2.21	—	—
ROE	2.5%	3.9%	4.2%	9.4%	—
ROCE	4.8%	6.0%	6.2%	16.1%	—
Total Debt	₹12 Cr	₹12 Cr	₹8 Cr	₹6 Cr	-20.5%
Free Cash Flow	-₹8 Cr	₹7 Cr	-₹0 Cr	₹10 Cr	—

🟢 Revenue has grown at 29.5% a year over 3 years.

🟢 EBITDA has grown at 40.0% a year over 3 years.

🟢 EBITDA Margin has risen from 11.1% to 14.1% over 3 years (+2.9 pts).

🟢 PAT (Net Profit) has grown at 64.8% a year over 3 years.

🟢 ROE has risen from 2.5% to 9.4% over 3 years (+6.9 pts).

🟢 ROCE has risen from 4.8% to 16.1% over 3 years (+11.3 pts).

🟢 Total Debt has shrunk at 20.5% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹8 Cr to ₹10 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹126 Cr

Total Liabilities

₹18 Cr

Cash & Equivalents

₹8 Cr

Operating Cash Flow

₹10 Cr

Capex

—

Recent News

1 positive5 general

Here's Why Rachana Infrastructure (NSE:RILINFRA) Has Caught The Eye Of Investors

Simply Wall Street, 23 Jun

SEBI warns Rachana Infrastructure over IPO prospectus disclosures

scanx.trade, 20 May

SJP ULTRASONICS LTD. Stock/Share price , NSE/BSE Forecast News and Live Quotes

Equitymaster, 08 Oct

Rachana Infrastructure Reports FY26 Net Profit of ₹1,012.72 Lakhs; Board Approves Key Appointments

scanx.trade, 01 Jun

Rachana Infrastructure Receives Order-in-Appeal Confirming ITC Demand of Rs. 1,19,79,990/-

scanx.trade, 13 MayOrder win

🟢Potentially positiveAn order or contract win, which adds to future revenue. How much depends on its size against annual sales and on when it is executed.

Rachana Infrastructure (NSEI:RILINFRA) - Stock Analysis

Simply Wall Street, 12 Jun

Watch Items

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.

DalalBaazaar Thesis

StrongBusiness Quality · Financial Health · Growth

MiddlingProfitability · Valuation

WeakRisk

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

All 5 tripwires holding · see Key things to watch ↑