Rockingdeals Circular Economy Limited

Sector n/a · NSE

₹642.35+₹20.05 (+3.22%)

DalalBaazaar Score

62 / 100

🟢 Good

Verdict

REASONABLE

Risk

Moderate

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

In simple words: Strong business and financial position, with modest growth. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:08 pm

Mixed / neutral. No major red flags jump out, but nothing here screams "obviously cheap" either. This is a name that needs a peer comparison and a view on near-term earnings triggers before sizing a position.

Understanding the Business

The 60-second version of Rockingdeals Circular Economy 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 ₹55 Cr a year. Of every ₹100 of sales, about ₹10 reaches shareholders as profit, with ₹19 left at the operating level before interest, tax and depreciation.

EBITDA margin18.9%

Net margin9.6%

What is its competitive advantage?Some evidence

ROCE of 19.5% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

ROCE19.5%

ROE13.2%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +273% while net margin moved +896% 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+273%

Margin effect+896%

DalalBaazaar Score

62/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

69/ 100

Good

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

Valuation

18/ 100

Expensive

What you are being asked to pay, ignoring how good the business is.

A good business, but the price already reflects that. The quality is real; the question is whether you are overpaying for it today.

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

P/E (Trailing)

—

P/B

—

EV/EBITDA

51.6x

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 5.2% to 18.9% over 3 years.
Return on equity is rising
ROE has improved from 2.7% to 13.2%.
Return on capital is rising
ROCE has improved from 8.8% to 19.5%.
Very low debt
Debt/Equity of 0.19x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention3

Debt is rising
Total debt is up 84% over 3 years — worth checking what it funded.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Inventory building faster than sales
Inventory is up 406% against revenue growth of 273% — stock may not be moving.

Red Flags

3 items require attention · 2 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 84% over 3 years, from ₹4 Cr to ₹7 Cr.
🔴Inventory building faster than salesFinancial
Inventory up 406% against revenue up 273% — stock may not be moving.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹7 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 19.5% 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.
Margin expansion has further to run
EBITDA margin has risen from 5.2% to 18.9%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
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?

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.
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 41% a year✓ 55.1% CAGR
Latest reported year was 11.6%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 17%✓ 18.9%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹7 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.7x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 17%✓ 19.5%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

6 / 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

3 good · 7 neutral · 1 weak

Market Cap

₹533 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

13.2%

Moderate

Moderate capital efficiency

ROCE

19.5%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.19x

Low

Conservative leverage

Revenue Growth (YoY)

11.6%

Healthy

Healthy top-line growth

Profit Growth (YoY)

2.5%

Modest

Slow profit growth

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹7 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹642.35

Gross Margin

32.2%

Proxy

Operating margin unavailable — showing gross margin instead

Net Margin

9.6%

Average

Average bottom-line conversion

Current Ratio

2.89

Comfortable

Healthy short-term liquidity

Technical Snapshot

SMA 20 / SMA 50

221.4 / 213.0

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

52.6

Neutral momentum

Financial Trend (4-Year)

Metric	FY22	FY23	FY24	FY25	3Y CAGR
Revenue	₹15 Cr	₹15 Cr	₹50 Cr	₹55 Cr	+55.1%
EBITDA	₹1 Cr	₹3 Cr	₹8 Cr	₹10 Cr	+138.2%
EBITDA Margin	5.2%	17.5%	15.7%	18.9%	—
PAT (Net Profit)	₹0 Cr	₹1 Cr	₹5 Cr	₹5 Cr	+233.7%
EPS	₹0.25	₹2.24	₹10.23	—	—
ROE	2.7%	20.9%	14.9%	13.2%	—
ROCE	8.8%	32.3%	21.4%	19.5%	—
Total Debt	₹4 Cr	₹4 Cr	₹0 Cr	₹7 Cr	+22.6%
Free Cash Flow	₹1 Cr	₹0 Cr	-₹17 Cr	-₹7 Cr	—

🟢 Revenue has grown at 55.1% a year over 3 years.

🟢 EBITDA has grown at 138.2% a year over 3 years.

🟢 EBITDA Margin has risen from 5.2% to 18.9% over 3 years (+13.7 pts).

🟢 PAT (Net Profit) has grown at 233.7% a year over 3 years.

🟢 ROE has risen from 2.7% to 13.2% over 3 years (+10.5 pts).

🟢 ROCE has risen from 8.8% to 19.5% over 3 years (+10.7 pts).

🔴 Total Debt has grown at 22.6% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹1 Cr to -₹7 Cr.

Balance Sheet & Cash Flow — FY2025

Total Assets

₹54 Cr

Total Liabilities

₹14 Cr

Total Debt

₹7 Cr

Cash & Equivalents

₹1 Cr

Operating Cash Flow

₹3 Cr

Capex

-₹10 Cr

Recent News

3 mixed2 general

Rockingdeals Circular Economy Ltd. (ROCKINGDCE) Share Price rises 9.09% as stock trades at Rs 240

Univest, 12 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.

There Are Some Reasons To Suggest That Rockingdeals Circular Economy's (NSE:ROCKINGDCE) Earnings Are A Poor Reflection Of Profitability

Simply Wall Street, 04 JunResults

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

Rockingdeals Circular Economy (ROCKINGDCE-SM) Share Price Falls 8.30% Today

Univest, 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.

NSE Seeks Clarifications From 13 Companies Over Unusual Price, Volume Movements

tennews.in, 26 Aug

Rocking Deals IPO: Here’s all you need to know about price band, issue date, GMP and other details

Livemint, 19 Nov

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

🟢Business QualityStrong14.5/20

🟢Financial HealthStrong13/20

🟢GrowthStrong14.9/20

🟡ProfitabilityModerate9.6/15

🟡ValuationFair7.5/15

🔴RiskHigh2.5/10

Good business, demanding price

The quality is real and the price already reflects it. Buying here is a bet that the business keeps compounding for long enough to grow into the multiple — which good businesses often do, but it removes the margin for error that a lower price would have given you. 2 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓Revenue growth stays above 41% a year55.1% CAGR
✓EBITDA margin holds above 17%18.9%
✗Free cash flow remains positive-₹7 Cr
✓Debt / EBITDA stays below 2x0.7x
✓ROCE stays above 17%19.5%