RTS Power Corporation Limited

Industrials — Electrical Equipment & Parts · NSE

₹114.00−₹3.50 (−2.98%)

DalalBaazaar Score

44 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Low

Driven by micro-cap size, which brings thin liquidity.

In simple words: The business is earning a fairly low return on the money invested in it, but sales are shrinking. Whether sales start growing again is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:59 pm

Understanding the Business

Company site ↗

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

What does this company do?

RTS Power Corporation Limited, together with its subsidiary, manufactures and sells power and distribution transformers for generation, transmission, and distribution of electricity in India.

IndustryElectrical Equipment & Parts

SectorIndustrials

Employees45

Annual revenue₹156 Cr

How does it make money?

Turns over ₹156 Cr a year. Of every ₹100 of sales, about ₹1 reaches shareholders as profit, with ₹6 left at the operating level before interest, tax and depreciation. Each of its 45 employees supports ₹3.46 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹3.46 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?Little sign of one

Returns on capital of 3.4% 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 ROE17.1%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +11% while net margin moved -78% 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+11%

Margin effect-78%

DalalBaazaar Score

44/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROCE of 3.4% is below 10% — capital is not working hard
✗ ROCE has fallen by 5.9 points — returns are eroding
✗ EBITDA margin of 6.3% is thin — little cushion if costs rise
✗ Net margin of 1.7% is slim
• Revenue has compounded at 3.6% a year, which is the base these returns are earned on

Quality vs. Valuation

Company Quality

41/ 100

Weak

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

Valuation

66/ 100

Fair

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

Weak on business quality and not cheap enough to compensate.

Historical Valuation

Current P/E

39.2x

Sector Median

88.8x

median of 3 sector peers

🟢Against its sector it trades 56% 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 · -56%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

13.6x

PEG

1.34

What's Good / What's Bad

🟢 What's Going Well3

Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
Very low debt
Debt/Equity of 0.21x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 6.5% to 1.5% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 9.3% to 3.4% — often a sign of competition or overexpansion.

Red Flags

3 items require attention · 1 high · 2 watch

🔴Significant margin compressionFinancial
EBITDA margin has fallen 7.5 points, from 13.8% to 6.3%.
🟡Profit is decliningFinancial
Net profit is down 75% over 3 years.
🟡Inventory building faster than salesFinancial
Inventory up 66% against revenue up 11% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Cheaper than its peers
It trades 56% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹3 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.
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 13.8% to 6.3%. 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 3.2x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Growth barely outpaces inflation
Revenue compounding at 3.6% 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 6.5% to 1.5%. 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.

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

1EBITDA margin holds above 4%✓ 6.3%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 3.2x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Interest cover stays above 3x✗ 2.3x
How much operating profit can fall before interest stops being comfortably covered.
4Revenue growth stays above 4% a year✗ 3.6% CAGR
Latest reported year was -12.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
5Free cash flow remains positive✓ ₹3 Cr
Profit that never becomes cash eventually stops being profit.

Investment Checklist

6 / 10 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

Price history

Quick Metrics

5 good · 3 neutral · 3 weak

Market Cap

₹105 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

39.2x

Fair

Fairly valued against the generic band

P/B Ratio

0.71x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹2.91

Profitable

Profitable on a per-share basis

ROE

1.5%

Weak

Weak capital efficiency

ROCE

3.4%

Weak

Low return on total capital employed

Debt/Equity

0.21x

Low

Conservative leverage

Revenue Growth (YoY)

-12.9%

Shrinking

Sales are contracting

Profit Growth (YoY)

29.3%

Healthy

Profits growing at a healthy clip

Dividend Yield

None

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

Free Cash Flow

₹3 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

1.1%

Weak

Thin margins leave little room for error

Net Margin

1.7%

Weak

Very little revenue reaches the bottom line

Current Ratio

2.53

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.86

Market-like

Moves roughly in line with the market

52W Range Position

65%

Mid-range

Technical Snapshot

RSI (14)

55.6

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹140 Cr	₹137 Cr	₹199 Cr	₹156 Cr	+3.6%
EBITDA	₹19 Cr	₹9 Cr	₹9 Cr	₹10 Cr	-20.1%
EBITDA Margin	13.8%	6.5%	4.8%	6.3%	—
PAT (Net Profit)	₹9 Cr	₹4 Cr	₹4 Cr	₹2 Cr	-37.2%
EPS	₹9.78	₹4.51	₹3.83	₹2.42	-37.2%
ROE	6.5%	2.9%	2.4%	1.5%	—
ROCE	9.3%	5.1%	4.0%	3.4%	—
Total Debt	₹28 Cr	₹34 Cr	₹23 Cr	₹31 Cr	+3.4%
Free Cash Flow	-₹3 Cr	-₹1 Cr	₹7 Cr	₹3 Cr	—

🟢 Revenue has grown at 3.6% a year over 3 years.

🔴 EBITDA has shrunk at 20.1% a year over 3 years.

🔴 EBITDA Margin has fallen from 13.8% to 6.3% over 3 years (-7.5 pts).

🔴 PAT (Net Profit) has shrunk at 37.2% a year over 3 years.

🔴 EPS has shrunk at 37.2% a year over 3 years.

🔴 ROE has fallen from 6.5% to 1.5% over 3 years (-5.0 pts).

🔴 ROCE has fallen from 9.3% to 3.4% over 3 years (-5.9 pts).

🔴 Total Debt has grown at 3.4% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹3 Cr to ₹3 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹213 Cr

Total Liabilities

₹66 Cr

Cash & Equivalents

₹2 Cr

Operating Cash Flow

₹4 Cr

Capex

-₹1 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

75.2%

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

6 general

RTS Power Corporation Lower Circuit Today: Price, Data and Peers

Univest, 13 Oct

RTS Power Corporation Ltd leads gainers in 'B' group

Business Standard, 28 Sept

Micro-Cap RTS Power Corporation Ltd Locks at Upper Circuit With 20% Gain

MarketsMojo, 25 Sept

RTS Power Corporation (NSE: RTSPOWR): Catalysts and Risks

Kalkine India, 10 Sept

RTS Power appoints Arun Pareek as independent director at AGM

scanx.trade, 21 Sept

RTS Power Corporation Ltd is Rated Sell

MarketsMojo, 29 Sept

Watch Items

Revenue growth is negative (-12.9%) on the latest reported period — check if this is one-off or a trend.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongFinancial Health

MiddlingValuation

WeakBusiness Quality · Growth · Profitability · Risk

Points for each in the Score ↑

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation. 1 high-severity red flag sits above this conclusion and should be read first.

3 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Interest cover stays above 3x; Revenue growth stays above 4% a year · see Key things to watch ↑