Rudra Ecovation Limited

Consumer Cyclical — Textile Manufacturing · BSE

₹19.75−₹0.60 (−2.95%)

DalalBaazaar Score

35 / 100

🔴 Weak

Verdict

CAUTION

Risk

Very High

Driven by negative free cash flow, the company is currently loss-making, micro-cap size, which brings thin liquidity.

In simple words: The company is currently losing money, but sales are shrinking. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:00 pm

Understanding the Business

Company site ↗

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

What does this company do?

Rudra Ecovation Limited engages in the manufacture and sale of cotton polyester yarns and knitted clothes in India. It offers rPet polyester flakes, rPet polyester staple fibre, and yarns. The company also provides home furnishing products and acoustic panel solutions.

IndustryTextile Manufacturing

SectorConsumer Cyclical

Employees200

Annual revenue₹31 Cr

How does it make money?

Turns over ₹31 Cr a year. Of every ₹100 of sales, about ₹-13 reaches shareholders as profit, with ₹-6 left at the operating level before interest, tax and depreciation. Each of its 200 employees supports ₹15.4 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹15.4 lakh

Who are its competitors?

The closest listed comparisons in its industry are MARUTI SUZUKI INDIA LTD., TITAN COMPANY LIMITED, TRENT LTD, AVENUE SUPERMARTS 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 -2.4% 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 ROE25.9%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +18% while net margin moved -218% 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+18%

Margin effect-218%

DalalBaazaar Score

35/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Return on equity is negative
✗ ROE has fallen by 16.6 points over the period

Quality vs. Valuation

Company Quality

35/ 100

Weak

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

Valuation

29/ 100

Expensive

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

Weak on business quality and not cheap enough to compensate.

vs. its own history

Not enough price and earnings history

vs. sector peers

Not enough peers with a usable P/E

vs. generic bands

N/A

No P/E — the company is lossmaking

EV/EBITDA

—

PEG

—

What's Good / What's Bad

🟢 What's Going Well1

Debt is being paid down
Total debt is down 87% over 3 years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 13.2% to -3.4% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 13.6% to -2.4% — often a sign of competition or overexpansion.

Red Flags

8 items require attention · 4 high · 4 watch

🔴Thin interest coverageFinancial
Operating profit covers interest only -2.3x — little room if earnings dip.
🔴The company is lossmakingFinancial
Net profit of -₹4 Cr in the latest reported year.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 16.1 points, from 10.2% to -5.9%.
🔴Receivables growing faster than salesFinancial
Receivables up 140% against revenue up 18% — sales are being booked faster than they are collected.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from -1.4x to -2.3x.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹17 Cr in the latest year.
🟡Inventory building faster than salesFinancial
Inventory up 43% against revenue up 18% — stock may not be moving.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 38% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Deleveraging frees up earnings
Debt is down 87% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 10.2% to -5.9%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Sales are being booked faster than collected
Receivables are up 140% against revenue up 18%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Growth barely outpaces inflation
Revenue compounding at 5.6% 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 13.2% to -3.4%. 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.
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.

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

1EBITDA margin holds above -8%✓ -5.9%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹17 Cr
Profit that never becomes cash eventually stops being profit.
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✓ 5.6% CAGR
Latest reported year was -94.3%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
5ROCE stays above 8%✗ -2.4%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

5 / 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

0 good · 4 neutral · 7 weak

Market Cap

₹236 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

Not meaningful

Loss-making

Earnings are negative, so a P/E multiple can't be read here

P/B Ratio

1.95x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹-0.37

Loss-making

Negative earnings per share — the business is losing money

ROE

-4.1%

Weak

Weak capital efficiency

ROCE

-2.4%

Weak

Low return on total capital employed

Debt/Equity

0.77x

Moderate

Moderate leverage

Revenue Growth (YoY)

-94.3%

Shrinking

Sales are contracting

Profit Growth (YoY)

-23.7%

Falling

Profits are shrinking

Dividend Yield

None

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

Free Cash Flow

-₹14 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

ROA

-1.9%

Weak

Assets generate little profit

Operating Margin

-184.9%

Weak

Thin margins leave little room for error

Net Margin

-20.3%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.54

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.81

Market-like

Moves roughly in line with the market

52W Range Position

25%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

22.1 / 21.1

Bullish alignment (short > long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

15.6

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹26 Cr	₹19 Cr	₹24 Cr	₹31 Cr	+5.6%
EBITDA	₹3 Cr	₹2 Cr	-₹1 Cr	-₹2 Cr	—
EBITDA Margin	10.2%	9.6%	-3.7%	-5.9%	—
PAT (Net Profit)	₹3 Cr	-₹1 Cr	-₹3 Cr	-₹4 Cr	—
EPS	₹0.34	₹-0.07	₹-0.3	₹-0.34	—
ROE	13.2%	-2.3%	-3.1%	-3.4%	—
ROCE	13.6%	1.5%	-1.8%	-2.4%	—
Total Debt	₹7 Cr	₹1 Cr	₹1 Cr	₹1 Cr	-49.6%
Free Cash Flow	₹11 Cr	₹3 Cr	₹14 Cr	-₹17 Cr	—

🟢 Revenue has grown at 5.6% a year over 3 years.

🔴 EBITDA has turned negative, from ₹3 Cr to -₹2 Cr.

🔴 EBITDA Margin has fallen from 10.2% to -5.9% over 3 years (-16.1 pts).

🔴 PAT (Net Profit) has turned negative, from ₹3 Cr to -₹4 Cr.

🔴 EPS has turned negative, from ₹0.34 to ₹-0.34.

🔴 ROE has fallen from 13.2% to -3.4% over 3 years (-16.6 pts).

🔴 ROCE has fallen from 13.6% to -2.4% over 3 years (-16.0 pts).

🟢 Total Debt has shrunk at 49.6% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹11 Cr to -₹17 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹139 Cr

Total Liabilities

₹19 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹17 Cr

Capex

—

Shareholding (proxy)

Institutional Holding

1.6%

Insider Holding

42.0%

Corporate Actions

Ex-Dividend Date

06 Jan 1997

Peer Comparison

Company	P/E	ROE
MARUTI SUZUKI INDIA LTD.	25.2x	13.4%
TITAN COMPANY LIMITED	68.5x	36.7%
TRENT LTD	87.2x	25.9%
AVENUE SUPERMARTS LIMITED	69.9x	12.7%

Recent News

2 mixed4 general

Rudra Ecovation Share Price rises 9.97%; valuation view

Univest, 25 AugPrice 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.

NCLT reserves order on Rudra Ecovation Shiva Texfabs merger

scanx.trade, 21 AugM&A

🟡Mixed / dependsAcquisitions change the balance sheet before they change the earnings. Look at what was paid, how it was funded, and whether debt rose.

Rudra Ecovation Share Price: Price Action, Valuation, Peers

Univest, 24 Aug

Compare with HIM.FIBRES

Equitymaster, 08 Oct

Rudra Ecovation 45th AGM passes all 5 resolutions with 99.99% approval

scanx.trade, 30 Sept

RUDRAECO Stock Price and Chart — BSE:RUDRAECO

TradingView, 22 Mar

Watch Items

Revenue growth is negative (-94.3%) 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.
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

MiddlingFinancial Health

WeakBusiness Quality · Growth · Profitability · Valuation · 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. 4 high-severity red flags sit above this conclusion and should be read first.

3 of 5 tripwires tripped — Free cash flow remains positive; Interest cover stays above 3x; ROCE stays above 8% · see Key things to watch ↑