Rose Merc Limited

Consumer Cyclical — Luxury Goods · BSE

₹42.75−₹0.46 (−1.06%)

DalalBaazaar Score

64 / 100

🟢 Good

Verdict

REASONABLE

Risk

High

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

In simple words: Strong business and financial position, with both sales and profits growing well. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:56 pm

Understanding the Business

Company site ↗

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

What does this company do?

Rose Merc Limited does not have significant operations. Previously, it was engaged in the retail and wholesale trade of iron and steel. The company was formerly known as Rose Patel Mercantile Co. Ltd. and changed its name to Rose Merc Limited in July 2000.

IndustryLuxury Goods

SectorConsumer Cyclical

Annual revenue₹88 Cr

How does it make money?

Turns over ₹88 Cr a year. Of every ₹100 of sales, about ₹6 reaches shareholders as profit, with ₹22 left at the operating level before interest, tax and depreciation.

Who are its competitors?

The closest listed comparisons in its industry are TITAN COMPANY LIMITED, TRENT LTD, AVENUE SUPERMARTS LIMITED, ASIAN PAINTS 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?Some evidence

ROCE of 20.5% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

Peer median ROE25.9%

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 +6803% while net margin moved -153% 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+6803%

Margin effect-153%

DalalBaazaar Score

64/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ High leverage magnifies any downturn in earnings
✗ Profits have swung sharply from year to year — earnings are hard to forecast

Quality vs. Valuation

Company Quality

64/ 100

Average

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

Valuation

88/ 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

4.7x

2Y Median

101.1x

28 monthly readings · mean 105.2x · range 4.6x–229.7x

Sector Median

69.2x

median of 4 sector peers

🟢Current valuation is approximately 95% below its 2y median of 101.1x. 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 93% below the peer median of 69.2x.

vs. its own history

Cheap

101.1x median over 28 months · -95%

vs. sector peers

Cheap

69.2x median of 4 peers · -93%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

1.4x

PEG

—

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from -11.9% to 22.3% over 3 years.
Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
Return on equity is rising
ROE has improved from -2.8% to 10.5%.
Return on capital is rising
ROCE has improved from -2.7% to 20.5%.
High return on capital employed
ROCE of 20.5% is the mark of a business that converts capital into profit efficiently.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

3 items require attention · 2 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 3225% over 3 years, from ₹0 Cr to ₹2 Cr.
🔴High leverageFinancial
Debt/Equity of 4.31x — earnings must service borrowings before shareholders see anything.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 373% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 20.5% 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 -11.9% to 22.3%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 95% 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.
Cheaper than its peers
It trades 93% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.

🔴 Bear CaseWhat could go wrong?

Leverage amplifies any setback
Debt/Equity of 4.31x. Interest is payable whether or not the business has a good year.
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 233% a year✓ 310.2% CAGR
Latest reported year was 12.3%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 20%✓ 22.3%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✓ ₹11 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.1x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 18%✓ 20.5%
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

6 good · 4 neutral · 1 weak

Market Cap

₹34 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

4.7x

Cheap

Cheap against the generic band

P/B Ratio

Not available

No data

Source didn't return this field

EPS (TTM)

₹9.14

Profitable

Profitable on a per-share basis

ROE

10.5%

Moderate

Moderate capital efficiency

ROCE

20.5%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

4.31x

High

High leverage

Revenue Growth (YoY)

12.3%

Healthy

Healthy top-line growth

Profit Growth (YoY)

1114.5%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.82%

Modest

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

Free Cash Flow

₹11 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

0.0%

Weak

Thin margins leave little room for error

Net Margin

0.0%

Weak

Very little revenue reaches the bottom line

Current Ratio

7.05

Comfortable

Healthy short-term liquidity

52W Range Position

15%

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

45.0 / 54.3

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

39.1

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1 Cr	₹5 Cr	₹79 Cr	₹88 Cr	+310.2%
EBITDA	-₹0 Cr	₹0 Cr	₹17 Cr	₹20 Cr	—
EBITDA Margin	-11.9%	8.2%	21.4%	22.3%	—
PAT (Net Profit)	-₹0 Cr	₹0 Cr	-₹1 Cr	₹6 Cr	—
EPS	₹-1.23	₹0.66	₹-1.16	₹8.04	—
ROE	-2.8%	1.8%	-1.5%	10.5%	—
ROCE	-2.7%	1.6%	20.6%	20.5%	—
Total Debt	₹0 Cr	₹1 Cr	₹2 Cr	₹2 Cr	+221.6%
Free Cash Flow	-₹2 Cr	-₹8 Cr	-₹3 Cr	₹11 Cr	—

🟢 Revenue has grown at 310.2% a year over 3 years.

🟢 EBITDA has turned positive, from -₹0 Cr to ₹20 Cr.

🟢 EBITDA Margin has risen from -11.9% to 22.3% over 3 years (+34.1 pts).

🟢 PAT (Net Profit) has turned positive, from -₹0 Cr to ₹6 Cr.

🟢 EPS has turned positive, from ₹-1.23 to ₹8.04.

🟢 ROE has risen from -2.8% to 10.5% over 3 years (+13.2 pts).

🟢 ROCE has risen from -2.7% to 20.5% over 3 years (+23.2 pts).

🔴 Total Debt has grown at 221.6% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹2 Cr to ₹11 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹97 Cr

Total Liabilities

₹9 Cr

Cash & Equivalents

₹8 Cr

Operating Cash Flow

₹11 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

52.4%

Corporate Actions

Dividend Rate

₹0.35

Ex-Dividend Date

03 Sept 2026

Peer Comparison

Company	P/E	ROE
TITAN COMPANY LIMITED	68.5x	36.7%
TRENT LTD	87.2x	25.9%
AVENUE SUPERMARTS LIMITED	69.9x	12.7%
ASIAN PAINTS LIMITED	46.9x	22.3%

Recent News

1 positive5 general

Rose Merc. Ltd. Peer Comparison – Compare with Others

Value Research, 31 Aug

Compare with ROSE PATEL M

Equitymaster, 15 Oct

Rose Merc reports demise of ED Purvesh Shelatkar, ensures continuity

scanx.trade, 28 Sept

Rose Merc Limited Announces Strategic Investment with ZCLUS India Limited

ANI News, 27 May

Green Stocks June 4: Pump Makers Outperform After MERC Relief Order

Saur Energy, 04 JunAnalyst view

🟢Potentially positiveAn analyst opinion changing, which moves the price without changing the business.

Rose Merc Limited and Navi Mumbai Premier League Get Honoured by The Brand Story

Business Standard, 07 Jul

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
1 metric couldn't be retrieved for this stock — this is more common for smaller or thinly-covered listings.

DalalBaazaar Thesis

StrongBusiness Quality · Growth · Valuation

MiddlingFinancial Health · 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.

All 5 tripwires holding · see Key things to watch ↑