Rolcon Engineering Company Limited

Industrials — Tools & Accessories · BSE

₹463.05₹0.00 (0.00%)

DalalBaazaar Score

49 / 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: Reasonable but unspectacular business quality, though profits are falling even as sales grow. Debt is 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 Rolcon Engineering Company Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Rolcon Engineering Company Limited manufactures and sells industrial chains and sprocket wheels in India, Asia, Africa, and North America.

IndustryTools & Accessories

SectorIndustrials

Annual revenue₹50 Cr

How does it make money?

Turns over ₹50 Cr a year. Of every ₹100 of sales, about ₹7 reaches shareholders as profit, with ₹11 left at the operating level before interest, tax and depreciation.

Who are its competitors?

The closest listed comparisons in its industry are LARSEN & TOUBRO LTD., SIEMENS LTD, ABB 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?Little sign of one

Returns on capital of 12.9% 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 ROE15.2%

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +7% while net margin moved -5% 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+7%

Margin effect-5%

DalalBaazaar Score

49/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue CAGR of only 2.3% — barely ahead of inflation
✗ Profit CAGR of only 0.4%
✗ Profit fell 20.3% in the latest year

Quality vs. Valuation

Company Quality

42/ 100

Weak

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

Valuation

70/ 100

Cheap

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

Optically cheap, but the underlying business scores poorly. Cheap-and-weak is what a value trap looks like from the outside — the low price may be deserved.

Historical Valuation

Current P/E

11.4x

3Y Median

13.7x

40 monthly readings · mean 16.9x · range 9.7x–38.5x

Sector Median

88.8x

median of 3 sector peers

🟢Current valuation is approximately 17% below its 3y median of 13.7x. 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 trades 87% below the peer median of 88.8x.

vs. its own history

Fair

13.7x median over 40 months · -17%

vs. sector peers

Cheap

88.8x median of 3 peers · -87%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

6.6x

PEG

26.17

What's Good / What's Bad

🟢 What's Going Well1

Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 17.3% to 11.3% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 24.8% to 12.9% — often a sign of competition or overexpansion.

Red Flags

4 items require attention · 3 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 364% over 3 years, from ₹0 Cr to ₹1 Cr.
🔴High leverageFinancial
Debt/Equity of 3.75x — earnings must service borrowings before shareholders see anything.
🔴Inventory building faster than salesFinancial
Inventory up 69% against revenue up 7% — stock may not be moving.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹0 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Cheaper than its peers
It trades 87% 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?

Leverage amplifies any setback
Debt/Equity of 3.75x. Interest is payable whether or not the business has a good year.
Growth barely outpaces inflation
Revenue compounding at 2.3% 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 17.3% to 11.3%. 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
3 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

1EBITDA margin holds above 9%✓ 10.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹0 Cr
Profit that never becomes cash eventually stops being profit.
3Revenue growth stays above 4% a year✗ 2.3% CAGR
Latest reported year was 1.2%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
4Debt / EBITDA stays below 2x✓ 0.2x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 10%✓ 12.9%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

4 / 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

3 good · 5 neutral · 3 weak

Market Cap

₹35 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

11.4x

Cheap

Cheap against the generic band

P/B Ratio

1.20x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹40.69

Profitable

Profitable on a per-share basis

ROE

11.3%

Moderate

Moderate capital efficiency

ROCE

12.9%

Moderate

Moderate return on the capital in the business

Debt/Equity

3.75x

High

High leverage

Revenue Growth (YoY)

1.2%

Modest

Modest growth

Profit Growth (YoY)

-20.3%

Falling

Profits are shrinking

Dividend Yield

0.54%

Modest

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

Free Cash Flow

-₹0 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

8.2%

Average

Average margins

Net Margin

6.0%

Average

Average bottom-line conversion

Current Ratio

1.96

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

-0.47

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

492.1 / 514.0

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

21.4

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹46 Cr	₹50 Cr	₹57 Cr	₹50 Cr	+2.3%
EBITDA	₹6 Cr	₹4 Cr	₹6 Cr	₹5 Cr	-2.0%
EBITDA Margin	12.2%	8.8%	10.4%	10.7%	—
PAT (Net Profit)	₹3 Cr	₹3 Cr	₹4 Cr	₹3 Cr	+0.4%
EPS	₹42.71	₹38.48	₹54.33	₹43.27	+0.4%
ROE	17.3%	13.7%	15.9%	11.3%	—
ROCE	24.8%	25.3%	17.2%	12.9%	—
Total Debt	₹0 Cr	₹1 Cr	₹1 Cr	₹1 Cr	+66.8%
Free Cash Flow	₹0 Cr	-₹0 Cr	₹1 Cr	-₹0 Cr	—

🟢 Revenue has grown at 2.3% a year over 3 years.

🟡 EBITDA has been broadly flat over 3 years (-2.0% a year).

🔴 EBITDA Margin has fallen from 12.2% to 10.7% over 3 years (-1.5 pts).

🟡 PAT (Net Profit) has been broadly flat over 3 years (0.4% a year).

🟡 EPS has been broadly flat over 3 years (0.4% a year).

🔴 ROE has fallen from 17.3% to 11.3% over 3 years (-6.0 pts).

🔴 ROCE has fallen from 24.8% to 12.9% over 3 years (-11.9 pts).

🔴 Total Debt has grown at 66.8% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹0 Cr to -₹0 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹42 Cr

Total Liabilities

₹13 Cr

Cash & Equivalents

₹1 Cr

Operating Cash Flow

₹3 Cr

Capex

-₹3 Cr

Shareholding (proxy)

Institutional Holding

9.7%

Insider Holding

77.6%

Corporate Actions

Dividend Rate

₹2.5

Ex-Dividend Date

21 Sept 2026

Peer Comparison

Company	P/E	ROE
LARSEN & TOUBRO LTD.	30.1x	15.2%
SIEMENS LTD	88.8x	10.5%
ABB INDIA LIMITED	92.6x	19.1%

Recent News

1 positive1 mixed1 negative3 general

Compare with

Equitymaster, 17 Oct

Rolcon Engineering Company Ltd. Peer Comparison – Compare with Others

Value Research, 02 Sept

Rolcon Engineering closes trading window ahead of Q2FY27 results

scanx.trade, 25 SeptResults

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

Rolcon Engineering Company Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 31 Aug

Rolcon Engineering shareholders approve ₹2.50 dividend for FY26

scanx.trade, 01 OctCapital return

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

Shakti Pumps (India) consolidated net profit declines 46.72% in the June 2026 quarter

Business Standard, 25 JulResults

🔴Potentially negativeReported deterioration, which feeds the growth and margin inputs on this page directly.

Watch Items

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.
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

StrongValuation

MiddlingFinancial Health · Profitability · Risk

WeakBusiness Quality · Growth

Points for each in the Score ↑

Cheap, but for a reason

The low price is the whole case here, and the business underneath scores poorly. Cheap-and-weak is what a value trap looks like from the outside — it needs a specific reason the numbers are about to improve, not just the observation that they are low. 3 high-severity red flags sit above this conclusion and should be read first.

2 of 5 tripwires tripped — Free cash flow remains positive; Revenue growth stays above 4% a year · see Key things to watch ↑