R K Swamy Limited

Communication Services — Advertising Agencies · NSE

₹84.76−₹0.89 (−1.04%)

DalalBaazaar Score

53 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Low

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

In simple words: Reasonable but unspectacular business quality, 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, 6:57 pm

Understanding the Business

Company site ↗

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

What does this company do?

R K Swamy Limited, together with its subsidiaries, provides integrated marketing services in India and internationally.

IndustryAdvertising Agencies

SectorCommunication Services

Annual revenue₹341 Cr

How does it make money?

Turns over ₹341 Cr a year. Of every ₹100 of sales, about ₹6 reaches shareholders as profit, with ₹16 left at the operating level before interest, tax and depreciation.

Who are its competitors?

The closest listed comparisons in its industry are BHARTI AIRTEL LIMITED, VODAFONE IDEA LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 10.9% 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.

Peer median ROE20.2%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +16% while net margin moved -39% 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+16%

Margin effect-39%

DalalBaazaar Score

53/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue CAGR of only 5.2% — barely ahead of inflation
✗ Profit has declined at 10.9% a year
✗ Profit is compounding slower than revenue — margins are being squeezed as the business grows

Quality vs. Valuation

Company Quality

51/ 100

Average

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

Valuation

75/ 100

Cheap

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

18.8x

3Y Median

27.3x

33 monthly readings · mean 29.1x · range 18.7x–50.0x

Sector Median

21.7x

median of 2 sector peers

🟢Current valuation is approximately 31% below its 3y median of 27.3x. 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 is priced broadly in line with the peer median of 21.7x.

vs. its own history

Cheap

27.3x median over 33 months · -31%

vs. sector peers

Fair

21.7x median of 2 peers · -13%

vs. generic bands

Fair

15x–35x

EV/EBITDA

7.8x

PEG

0.89

What's Good / What's Bad

🟢 What's Going Well2

Very low debt
Debt/Equity of 0.21x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 69.1% to 8.4% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 71.2% to 10.9% — often a sign of competition or overexpansion.

Red Flags

2 items require attention · 1 high · 1 watch

🔴Significant margin compressionFinancial
EBITDA margin has fallen 5.2 points, from 21.6% to 16.3%.
🟡Profit is decliningFinancial
Net profit is down 29% over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 31% 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.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹28 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?

Margins are being competed away
EBITDA margin has fallen from 21.6% to 16.3%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Growth barely outpaces inflation
Revenue compounding at 5.2% 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 69.1% to 8.4%. 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 14%✓ 16.3%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Revenue growth stays above 4% a year✓ 5.2% CAGR
Latest reported year was 7.8%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
3Free cash flow remains positive✓ ₹28 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.8x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 8%✓ 10.9%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

7 / 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 · 6 neutral · 0 weak

Market Cap

₹428 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

18.8x

Fair

Fairly valued against the generic band

P/B Ratio

1.62x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹4.5

Profitable

Profitable on a per-share basis

ROE

8.4%

Moderate

Moderate capital efficiency

ROCE

10.9%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.21x

Low

Conservative leverage

Revenue Growth (YoY)

7.8%

Modest

Modest growth

Profit Growth (YoY)

21.1%

Healthy

Profits growing at a healthy clip

Dividend Yield

2.36%

Healthy

Meaningful cash return while you hold the stock

Free Cash Flow

₹28 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

4.0%

Weak

Thin margins leave little room for error

Net Margin

6.5%

Average

Average bottom-line conversion

Current Ratio

2.66

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

1.04

Market-like

Moves roughly in line with the market

52W Range Position

24%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

88.1 / 92.4

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

29.9

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹293 Cr	₹332 Cr	₹294 Cr	₹341 Cr	+5.2%
EBITDA	₹63 Cr	₹76 Cr	₹42 Cr	₹56 Cr	-4.1%
EBITDA Margin	21.6%	23.0%	14.2%	16.3%	—
PAT (Net Profit)	₹31 Cr	₹40 Cr	₹19 Cr	₹22 Cr	-10.9%
EPS	₹6.19	₹8.86	₹3.7	₹4.38	-10.9%
ROE	69.1%	16.5%	7.5%	8.4%	—
ROCE	71.2%	23.2%	9.7%	10.9%	—
Total Debt	₹34 Cr	₹20 Cr	₹32 Cr	₹43 Cr	+7.6%
Free Cash Flow	₹24 Cr	₹9 Cr	-₹20 Cr	₹28 Cr	+4.8%

🟢 Revenue has grown at 5.2% a year over 3 years.

🔴 EBITDA has shrunk at 4.1% a year over 3 years.

🔴 EBITDA Margin has fallen from 21.6% to 16.3% over 3 years (-5.2 pts).

🔴 PAT (Net Profit) has shrunk at 10.9% a year over 3 years.

🔴 EPS has shrunk at 10.9% a year over 3 years.

🔴 ROE has fallen from 69.1% to 8.4% over 3 years (-60.8 pts).

🔴 ROCE has fallen from 71.2% to 10.9% over 3 years (-60.3 pts).

🔴 Total Debt has grown at 7.6% a year over 3 years.

🟢 Free Cash Flow has grown at 4.8% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹428 Cr

Total Liabilities

₹164 Cr

Cash & Equivalents

₹36 Cr

Operating Cash Flow

₹38 Cr

Capex

-₹10 Cr

Shareholding (proxy)

Institutional Holding

4.0%

Insider Holding

69.6%

Corporate Actions

Dividend Rate

₹2

Ex-Dividend Date

31 Jul 2026

Peer Comparison

Company	P/E	ROE
BHARTI AIRTEL LIMITED	39.8x	20.2%
VODAFONE IDEA LIMITED	3.6x	—

Recent News

1 positive2 mixed3 general

Here's What We Like About R K Swamy's (NSE:RKSWAMY) Upcoming Dividend

Simply Wall Street, 28 JulCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Why Is R K Swamy Share Price Falling Key Reasons 2026

Univest, 30 JunPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

R K Swamy dispatches web-link for 53rd AGM and FY26 annual report

scanx.trade, 17 Jul

Porinju's Equity Intelligence buys 1.2% stake in RK Swamy, Nippon India picks additional 3.8% stake in...

Moneycontrol.com, 22 Jan

R K Swamy Limited (NSE:RKSWAMY) Stock's Been Sliding But Fundamentals Look Decent: Will The Market Correct The Share Price In The Future?

Simply Wall Street, 22 Jan

R K Swamy Share Price Target 2027 to 2030: Analyst Outlook

Univest, 18 AugAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Watch Items

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

StrongFinancial Health · Valuation

MiddlingBusiness Quality

WeakGrowth · Profitability · Risk

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.

All 5 tripwires holding · see Key things to watch ↑