RMC Switchgears Limited

Industrials — Electrical Equipment & Parts · NSE

₹205.75+₹1.80 (+0.88%)

DalalBaazaar Score

56 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

Driven by moderate debt load, negative free cash flow, micro-cap size, which brings thin liquidity.

In simple words: Strong business and financial position, but sales are shrinking. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:46 pm

Understanding the Business

Company site ↗

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

What does this company do?

RMC Switchgears Limited engages in the switchgear engineering business in India.

IndustryElectrical Equipment & Parts

SectorIndustrials

Employees281

Annual revenue₹399 Cr

How does it make money?

Turns over ₹399 Cr a year. Of every ₹100 of sales, about ₹6 reaches shareholders as profit, with ₹11 left at the operating level before interest, tax and depreciation. Each of its 281 employees supports ₹1.42 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.42 Cr

Who are its competitors?

The closest listed comparisons in its industry are SIEMENS LTD, ABB INDIA LIMITED, HAVELLS INDIA 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?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 27.7%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 17.1% against a peer median of 17.1% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

Peer median ROE17.1%

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 +220% while net margin moved -41% 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+220%

Margin effect-41%

DalalBaazaar Score

56/ 100

Moderate

Weighted across six categories. Every point is explained below.

✓ Beta of -1.16 — historically steadier than the index
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

54/ 100

Average

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

Valuation

85/ 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

10.7x

Sector Median

88.8x

median of 3 sector peers

🟢Against its sector it trades 88% below the peer median of 88.8x.

vs. its own history

Not enough price and earnings history

vs. sector peers

Cheap

88.8x median of 3 peers · -88%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

7.0x

PEG

0.45

What's Good / What's Bad

🟢 What's Going Well2

High return on capital employed
ROCE of 27.7% 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 25.7% to 17.1% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 33.6% to 27.7% — often a sign of competition or overexpansion.

Red Flags

5 items require attention · 2 high · 3 watch

🔴Debt has risen sharplyFinancial
Total debt is up 127% over 3 years, from ₹46 Cr to ₹105 Cr.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 9.9 points, from 21.3% to 11.5%.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 7.4x to 3.8x.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹34 Cr in the latest year.
🟡Receivables growing faster than salesFinancial
Receivables up 259% against revenue up 220% — 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 27.7% 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.
Cheaper than its peers
It trades 88% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
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 21.3% to 11.5%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Sales are being booked faster than collected
Receivables are up 259% against revenue up 220%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Returns on shareholder capital are falling
ROE has dropped from 25.7% to 17.1%. 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.
Several serious flags at once
2 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

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

1Revenue growth stays above 35% a year✓ 47.3% CAGR
Latest reported year was -55.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 9%✓ 11.5%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA stays below 2x✗ 2.3x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4Free cash flow remains positive✗ -₹34 Cr
Profit that never becomes cash eventually stops being profit.
5Interest cover stays above 3x✓ 3.8x
How much operating profit can fall before interest stops being comfortably covered.

Investment Checklist

6 / 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

4 good · 4 neutral · 3 weak

Market Cap

₹218 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

10.7x

Cheap

Cheap against the generic band

P/B Ratio

1.66x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹19.25

Profitable

Profitable on a per-share basis

ROE

17.1%

Strong

Strong capital efficiency

ROCE

27.7%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.81x

Moderate

Moderate leverage

Revenue Growth (YoY)

-55.9%

Shrinking

Sales are contracting

Profit Growth (YoY)

-49.0%

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

-₹34 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

17.3%

Good

Healthy core-business profitability

Net Margin

5.8%

Average

Average bottom-line conversion

Current Ratio

1.32

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

-1.16

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

205.7 / 233.8

Bearish alignment (short < long)

RSI (14)

38.1

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹125 Cr	₹171 Cr	₹316 Cr	₹399 Cr	+47.3%
EBITDA	₹27 Cr	₹39 Cr	₹51 Cr	₹46 Cr	+19.8%
EBITDA Margin	21.3%	22.8%	16.2%	11.5%	—
PAT (Net Profit)	₹12 Cr	₹15 Cr	₹31 Cr	₹22 Cr	+23.9%
EPS	₹12.2	₹14.44	₹29.58	₹21.14	+20.1%
ROE	25.7%	24.6%	28.6%	17.1%	—
ROCE	33.6%	35.7%	37.6%	27.7%	—
Total Debt	₹46 Cr	₹50 Cr	₹59 Cr	₹105 Cr	+31.3%
Free Cash Flow	-₹4 Cr	₹5 Cr	-₹5 Cr	-₹34 Cr	—

🟢 Revenue has grown at 47.3% a year over 3 years.

🟢 EBITDA has grown at 19.8% a year over 3 years.

🔴 EBITDA Margin has fallen from 21.3% to 11.5% over 3 years (-9.9 pts).

🟢 PAT (Net Profit) has grown at 23.9% a year over 3 years.

🟢 EPS has grown at 20.1% a year over 3 years.

🔴 ROE has fallen from 25.7% to 17.1% over 3 years (-8.6 pts).

🔴 ROCE has fallen from 33.6% to 27.7% over 3 years (-6.0 pts).

🔴 Total Debt has grown at 31.3% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹367 Cr

Total Liabilities

₹236 Cr

Cash & Equivalents

₹2 Cr

Operating Cash Flow

-₹12 Cr

Capex

-₹22 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

60.8%

Peer Comparison

Company	P/E	ROE
SIEMENS LTD	88.8x	10.5%
ABB INDIA LIMITED	92.6x	19.1%
HAVELLS INDIA LIMITED	43.5x	17.1%

Recent News

1 positive3 mixed2 general

RMC Share Price rises 8.13%; price action and valuation

Univest, 14 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.

RMC Switchgears Secures ₹334 Crore Order, Surpassing Market Cap of ₹313 Crore

Sahi, 04 AugOrder 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.

Earnings Troubles May Signal Larger Issues for RMC Switchgears (NSE:RMC) Shareholders

Simply Wall Street, 07 JunResults

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

RMC Switchgears targets ₹50,000 crore market with PulseBox

scanx.trade, 11 Jun

RMC Stock Price and Chart — NSE:RMC

TradingView, 01 Apr

RMC Switchgears Gets ₹14.98 Crore MSEDCL Order; Shares Fall 2.88%

HDFC Sky, 08 SeptPrice 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.

Watch Items

Revenue growth is negative (-55.9%) on the latest reported period — check if this is one-off or a trend.
Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongValuation

MiddlingBusiness Quality · Financial Health · Growth · Profitability

WeakRisk

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

2 of 5 tripwires tripped — Debt / EBITDA stays below 2x; Free cash flow remains positive · see Key things to watch ↑