Rir Power Electronics Limited

Technology — Semiconductors · NSE

₹164.07−₹2.41 (−1.45%)

DalalBaazaar Score

45 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Very High

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

In simple words: The business is earning a fairly low return on the money invested in it, but sales are shrinking. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:07 pm

Caution warranted. Multiple fundamental metrics — flagged in red below — point to either valuation stretch, leverage risk, or weakening profitability. This doesn't mean avoid the stock outright, but it does mean the burden of proof is on the growth story to justify the current price.

Understanding the Business

Company site ↗

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

What does this company do?

Rir Power Electronics Limited engages in the manufacture and sale of power semiconductor devices and high-power equipment in India.

IndustrySemiconductors

SectorTechnology

Annual revenue₹91 Cr

How does it make money?

Turns over ₹91 Cr a year. Of every ₹100 of sales, about ₹9 reaches shareholders as profit, with ₹14 left at the operating level before interest, tax and depreciation.

EBITDA margin14.0%

Net margin8.7%

Who are its competitors?

The closest listed comparisons in its industry are TATA CONSULTANCY SERV LT, INFOSYS LIMITED, HCL TECHNOLOGIES LTD, WIPRO LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

TATA CONSULTANCY SERV LTP/E 17.3x · ROE 45.6%

INFOSYS LIMITEDP/E 15.8x · ROE 32.0%

HCL TECHNOLOGIES LTDP/E 20.4x · ROE 24.6%

WIPRO LTDP/E 14.5x · ROE 15.9%

What is its competitive advantage?Little sign of one

Returns on capital of 6.6% 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.

ROCE6.6%

ROE6.2%

Peer median ROE32.0%

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 +58% while net margin moved -16% 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+58%

Margin effect-16%

DalalBaazaar Score

45/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ P/E of 131.3x is demanding — it needs sustained high growth to justify
✗ P/B of 9.36x is a steep premium to book

Quality vs. Valuation

Company Quality

51/ 100

Average

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

Valuation

23/ 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.

Historical Valuation

Current P/E

131.3x

Sector Median

16.5x

median of 4 sector peers

⚠️Against its sector it trades 693% above the peer median of 16.5x.

vs. its own history

Not enough price and earnings history

vs. sector peers

Expensive

16.5x median of 4 peers · +693%

vs. generic bands

Expensive

Above 35x

P/E (Trailing)

131.3x

P/B

9.36x

EV/EBITDA

103.4x

PEG

13.24

Dividend Yield

0.06%

What's Good / What's Bad

🟢 What's Going Well2

Debt is being paid down
Total debt is down 57% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention4

Margins are compressing
EBITDA margin has slipped from 17.3% to 14.0% over 3 years.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Return on equity is falling
ROE has dropped from 18.1% to 5.7% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 15.6% to 6.6% — often a sign of competition or overexpansion.

Red Flags

4 items require attention · 3 high · 1 watch

🔴High leverageFinancial
Debt/Equity of 9.95x — earnings must service borrowings before shareholders see anything.
🔴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.
🔴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.
🟡Margins are compressingFinancial
EBITDA margin is down 3.3 points over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Deleveraging frees up earnings
Debt is down 57% 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?

Margins are being competed away
EBITDA margin has fallen from 17.3% to 14.0%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Leverage amplifies any setback
Debt/Equity of 9.95x. Interest is payable whether or not the business has a good year.
A premium to the sector to defend
It trades 693% above the peer median. That premium needs a reason that persists, or it closes.
Returns on shareholder capital are falling
ROE has dropped from 18.1% to 5.7%. 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

1Revenue growth stays above 12% a year✓ 16.6% CAGR
Latest reported year was -16.5%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 12%✓ 14.0%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹49 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.1x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 8%✗ 6.6%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

3 / 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

1 good · 2 neutral · 8 weak

Market Cap

₹1,306 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

131.3x

Expensive

Expensive — verify against sector peers

P/B Ratio

9.36x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹1.25

Profitable

Profitable on a per-share basis

ROE

6.2%

Weak

Weak capital efficiency

ROCE

6.6%

Weak

Low return on total capital employed

Debt/Equity

9.95x

High

High leverage

Revenue Growth (YoY)

-16.5%

Shrinking

Sales are contracting

Profit Growth (YoY)

-65.3%

Falling

Profits are shrinking

Dividend Yield

0.06%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

-₹45 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹164.07

ROA

3.0%

Average

Average asset productivity

Operating Margin

5.2%

Average

Average margins

Net Margin

8.7%

Average

Average bottom-line conversion

Current Ratio

3.85

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

1.25

Market-like

Moves roughly in line with the market

52W Range Position

17%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

181.0 / 174.1

Bullish alignment (short > long)

RSI (14)

25.8

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹57 Cr	₹67 Cr	₹86 Cr	₹91 Cr	+16.6%
EBITDA	₹10 Cr	₹12 Cr	₹13 Cr	₹13 Cr	+8.7%
EBITDA Margin	17.3%	17.7%	15.3%	14.0%	—
PAT (Net Profit)	₹6 Cr	₹7 Cr	₹8 Cr	₹8 Cr	+9.9%
EPS	₹0.87	₹1.01	₹0.96	₹1.01	+5.1%
ROE	18.1%	11.2%	6.7%	5.7%	—
ROCE	15.6%	12.3%	9.8%	6.6%	—
Total Debt	₹32 Cr	₹34 Cr	₹21 Cr	₹14 Cr	-24.4%
Free Cash Flow	-₹3 Cr	-₹2 Cr	-₹50 Cr	-₹49 Cr	—

🟢 Revenue has grown at 16.6% a year over 3 years.

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

🔴 EBITDA Margin has fallen from 17.3% to 14.0% over 3 years (-3.3 pts).

🟢 PAT (Net Profit) has grown at 9.9% a year over 3 years.

🟢 EPS has grown at 5.1% a year over 3 years.

🔴 ROE has fallen from 18.1% to 5.7% over 3 years (-12.4 pts).

🔴 ROCE has fallen from 15.6% to 6.6% over 3 years (-9.0 pts).

🟢 Total Debt has shrunk at 24.4% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹217 Cr

Total Liabilities

₹77 Cr

Total Debt

₹14 Cr

Cash & Equivalents

₹1 Cr

Operating Cash Flow

-₹22 Cr

Capex

-₹27 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

68.7%

Corporate Actions

Dividend Rate

₹0.1

Ex-Dividend Date

22 Sept 2026

Peer Comparison

Company	P/E	ROE
TATA CONSULTANCY SERV LT	17.3x	45.6%
INFOSYS LIMITED	15.8x	32.0%
HCL TECHNOLOGIES LTD	20.4x	24.6%
WIPRO LTD	14.5x	15.9%

Recent News

1 positive2 mixed3 general

Top 6 Semiconductor Stocks In India To Invest In October 2026

Samco, 16 Oct

RIR Power Electronics standalone net profit rises 80.46% in the June 2026 quarter

Business Standard, 11 AugResults

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

Small cap stock RIR Power Electronics share price jumps around 8% today: Here’s why the semiconductor stock is rallying

Livemint, 18 SeptPrice 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.

RIR Power Electronics releases Q1FY27 earnings call transcript

scanx.trade, 11 AugResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

RIR Power Electronics Set to Begin Trading on National Stock Exchange

Energetica India Magazine, 15 Jul

Rir Power Electronics | Stock Share Price Live

MarketSmith India, 04 Aug

Watch Items

Revenue growth is negative (-16.5%) 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.
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

🟡Business QualityAdequate9/20

🟡Financial HealthAdequate11.9/20

🟡GrowthModest11.6/20

🔴ProfitabilityWeak5.8/15

🔴ValuationDemanding3.2/15

🔴RiskHigh3.7/10

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

This thesis breaks if

✓Revenue growth stays above 12% a year16.6% CAGR
✓EBITDA margin holds above 12%14.0%
✗Free cash flow remains positive-₹49 Cr
✓Debt / EBITDA stays below 2x1.1x
✗ROCE stays above 8%6.6%