Rossell Techsys Limited

Industrials — Aerospace & Defense · NSE

₹1,518.00−₹46.30 (−2.96%)

DalalBaazaar Score

53 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Very High

Driven by high debt relative to equity, negative free cash flow, small-cap size, which brings sharper price swings.

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 Rossell Techsys Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Rossell Techsys Limited provides engineering and manufacturing solutions for the global aerospace and defense industry in India and internationally.

IndustryAerospace & Defense

SectorIndustrials

Employees347

Annual revenue₹484 Cr

How does it make money?

Turns over ₹484 Cr a year. Of every ₹100 of sales, about ₹5 reaches shareholders as profit, with ₹14 left at the operating level before interest, tax and depreciation. Each of its 347 employees supports ₹1.39 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.39 Cr

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?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 32.7%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 14.1% against a peer median of 15.2% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

Peer median ROE15.2%

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 2 years revenue moved +127% while net margin moved -14% 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+127%

Margin effect-14%

DalalBaazaar Score

53/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Small 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
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

57/ 100

Average

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

Valuation

39/ 100

Expensive

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

222.6x

2Y Median

299.6x

24 monthly readings · mean 271.8x · range 90.3x–503.2x

Sector Median

88.8x

median of 3 sector peers

🟢Current valuation is approximately 26% below its 2y median of 299.6x. 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 151% above the peer median of 88.8x.

vs. its own history

Cheap

299.6x median over 24 months · -26%

vs. sector peers

Expensive

88.8x median of 3 peers · +151%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

90.1x

PEG

5.60

What's Good / What's Bad

🟢 What's Going Well3

Return on equity is rising
ROE has improved from 8.9% to 14.1%.
Return on capital is rising
ROCE has improved from 19.3% to 32.7%.
High return on capital employed
ROCE of 32.7% 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

5 items require attention · 4 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 144% over 2 years, from ₹168 Cr to ₹409 Cr.
🔴High leverageFinancial
Debt/Equity of 2.64x — earnings must service borrowings before shareholders see anything.
🔴Free cash flow negative for 3 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🟡Margins are compressingFinancial
EBITDA margin is down 2.4 points over 2 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 32.7% 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.
Priced below its own history
The stock trades 26% 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.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 16.4% to 14.0%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The debt load needs earnings to hold up
Debt is 6.0x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
A premium to the sector to defend
It trades 151% above the peer median. That premium needs a reason that persists, or it closes.
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
Small 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

1Revenue growth stays above 38% a year✓ 50.6% CAGR
Latest reported year was 77.1%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 12%✓ 14.0%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA falls below 3x✗ 6.0x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
4Free cash flow remains positive✗ -₹105 Cr
Profit that never becomes cash eventually stops being profit.
5Interest cover stays above 3x✗ 2.2x
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 · 3 neutral · 4 weak

Market Cap

₹5,744 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

222.6x

Expensive

Expensive — verify against sector peers

P/B Ratio

36.86x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹6.82

Profitable

Profitable on a per-share basis

ROE

14.1%

Moderate

Moderate capital efficiency

ROCE

32.7%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

2.64x

High

High leverage

Revenue Growth (YoY)

77.1%

Healthy

Healthy top-line growth

Profit Growth (YoY)

117.2%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.02%

Modest

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

Free Cash Flow

-₹105 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

11.9%

Average

Average margins

Net Margin

4.7%

Average

Average bottom-line conversion

Current Ratio

1.08

Adequate

Adequate, but no real cushion

52W Range Position

84%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

1508.1 / 1283.6

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

65.8

Neutral momentum

Financial Trend (3-Year)

Metric	FY24	FY25	FY26	2Y CAGR
Revenue	₹213 Cr	₹260 Cr	₹484 Cr	+50.6%
EBITDA	₹35 Cr	₹39 Cr	₹68 Cr	+39.0%
EBITDA Margin	16.4%	15.0%	14.0%	—
PAT (Net Profit)	₹11 Cr	₹8 Cr	₹22 Cr	+39.8%
EPS	₹2.97	₹2.1	₹5.81	+39.8%
ROE	8.9%	5.9%	14.1%	—
ROCE	19.3%	20.5%	32.7%	—
Total Debt	₹168 Cr	₹240 Cr	₹409 Cr	+56.3%
Free Cash Flow	-₹10 Cr	-₹55 Cr	-₹105 Cr	—

🟢 Revenue has grown at 50.6% a year over 2 years.

🟢 EBITDA has grown at 39.0% a year over 2 years.

🔴 EBITDA Margin has fallen from 16.4% to 14.0% over 2 years (-2.4 pts).

🟢 PAT (Net Profit) has grown at 39.8% a year over 2 years.

🟢 EPS has grown at 39.8% a year over 2 years.

🟢 ROE has risen from 8.9% to 14.1% over 2 years (+5.3 pts).

🟢 ROCE has risen from 19.3% to 32.7% over 2 years (+13.5 pts).

🔴 Total Debt has grown at 56.3% a year over 2 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹631 Cr

Total Liabilities

₹476 Cr

Cash & Equivalents

₹47 Cr

Operating Cash Flow

-₹83 Cr

Capex

-₹23 Cr

Shareholding (proxy)

Institutional Holding

6.1%

Insider Holding

78.2%

Corporate Actions

Dividend Rate

₹0.3

Ex-Dividend Date

17 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

2 mixed4 general

Rossell Techsys shareholders approve ₹300 crore preferential issue

scanx.trade, 17 Oct

Rossell Techsys Shareholders Approve Preferential Equity Issue with Near-Unanimous Vote

Whalesbook, 16 Oct

Rossell Techsys Share Price Falls 5.46%: Valuation View

Univest, 08 OctPrice 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.

Rossell Techsys shares zoom 101% in six months, hit new high; here's why

Business Standard, 16 Sept

Rossell Techsys Ltd | Stock Share Price Live

MarketSmith India, 24 Feb

Investors Shouldn't Be Too Comfortable With Rossell Techsys' (NSE:ROSSTECH) Earnings

Simply Wall Street, 19 MayResults

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

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongBusiness Quality · Growth

MiddlingProfitability

WeakFinancial Health · Valuation · 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. 4 high-severity red flags sit above this conclusion and should be read first.

3 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Free cash flow remains positive; Interest cover stays above 3x · see Key things to watch ↑