Rungta Irrigation Limited

Industrials — Farm & Heavy Construction Machinery · BSE

₹47.00−₹1.40 (−2.89%)

DalalBaazaar Score

53 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Moderate

Driven by negative free cash flow, micro-cap size, which brings thin liquidity, falling profits.

In simple words: The business is earning a fairly low return on the money invested in it, 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, 7:02 pm

Understanding the Business

Company site ↗

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

What does this company do?

Rungta Irrigation Limited engages in the design, manufacture, assemble, and market of pipe-based sprinkler irrigation systems in India.

IndustryFarm & Heavy Construction Machinery

SectorIndustrials

Employees195

Annual revenue₹181 Cr

How does it make money?

Turns over ₹181 Cr a year. Of every ₹100 of sales, about ₹3 reaches shareholders as profit, with ₹7 left at the operating level before interest, tax and depreciation. Each of its 195 employees supports ₹92.9 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹92.9 lakh

Who are its competitors?

The closest listed comparisons in its industry are MAHINDRA & MAHINDRA LTD, ASHOK LEYLAND LTD, TATA MOTORS LIMITED, LARSEN & TOUBRO LTD.. 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 8.8% 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 ROE24.4%

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +39% while net margin moved +32% 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+39%

Margin effect+32%

DalalBaazaar Score

53/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROE of 5.5% is weak

Quality vs. Valuation

Company Quality

51/ 100

Average

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

Valuation

73/ 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

20.7x

3Y Median

20.8x

40 monthly readings · mean 21.7x · range 14.1x–39.3x

Sector Median

27.6x

median of 4 sector peers

🟡Currently trading close to its 3y median of 20.8x — the market is paying about what it usually pays for this company.

🟢Against its sector it trades 25% below the peer median of 27.6x.

vs. its own history

Fair

20.8x median over 40 months · -1%

vs. sector peers

Cheap

27.6x median of 4 peers · -25%

vs. generic bands

Fair

15x–35x

EV/EBITDA

10.1x

PEG

0.92

What's Good / What's Bad

🟢 What's Going Well2

Very low debt
Debt/Equity of 0.27x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

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

Red Flags

3 items require attention · 3 high

🔴Debt has risen sharplyFinancial
Total debt is up 139% over 3 years, from ₹11 Cr to ₹26 Cr.
🔴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.
🔴Receivables growing faster than salesFinancial
Receivables up 160% against revenue up 39% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Cheaper than its peers
It trades 25% 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?

Sales are being booked faster than collected
Receivables are up 160% against revenue up 39%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
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

1Revenue growth stays above 9% a year✓ 11.7% CAGR
Latest reported year was -49.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 5%✓ 6.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA stays below 2x✗ 2.2x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4Free cash flow remains positive✗ -₹0 Cr
Profit that never becomes cash eventually stops being profit.
5ROCE stays above 8%✓ 8.8%
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

3 good · 4 neutral · 4 weak

Market Cap

₹94 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

20.7x

Fair

Fairly valued against the generic band

P/B Ratio

0.95x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹2.27

Profitable

Profitable on a per-share basis

ROE

5.5%

Weak

Weak capital efficiency

ROCE

8.8%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.27x

Low

Conservative leverage

Revenue Growth (YoY)

-49.9%

Shrinking

Sales are contracting

Profit Growth (YoY)

-91.0%

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

-₹0 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

2.9%

Weak

Thin margins leave little room for error

Net Margin

2.6%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.99

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

-0.12

Defensive

Steadier than the market

52W Range Position

15%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

49.4 / 49.4

Bullish alignment (short > long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

45.3

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹130 Cr	₹149 Cr	₹219 Cr	₹181 Cr	+11.7%
EBITDA	₹7 Cr	₹11 Cr	₹13 Cr	₹12 Cr	+18.3%
EBITDA Margin	5.5%	7.3%	5.8%	6.6%	—
PAT (Net Profit)	₹3 Cr	₹6 Cr	₹6 Cr	₹5 Cr	+22.6%
EPS	₹2.93	₹2.84	₹3.13	₹2.76	-2.0%
ROE	3.9%	6.5%	6.7%	5.5%	—
ROCE	7.3%	9.9%	10.7%	8.8%	—
Total Debt	₹11 Cr	₹11 Cr	₹28 Cr	₹26 Cr	+33.6%
Free Cash Flow	₹5 Cr	-₹7 Cr	-₹18 Cr	-₹0 Cr	—

🟢 Revenue has grown at 11.7% a year over 3 years.

🟢 EBITDA has grown at 18.3% a year over 3 years.

🟢 EBITDA Margin has risen from 5.5% to 6.6% over 3 years (+1.0 pts).

🟢 PAT (Net Profit) has grown at 22.6% a year over 3 years.

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

🟢 ROE has risen from 3.9% to 5.5% over 3 years (+1.7 pts).

🟢 ROCE has risen from 7.3% to 8.8% over 3 years (+1.5 pts).

🔴 Total Debt has grown at 33.6% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹5 Cr to -₹0 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹153 Cr

Total Liabilities

₹54 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

₹6 Cr

Capex

-₹6 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

91.2%

Peer Comparison

Company	P/E	ROE
MAHINDRA & MAHINDRA LTD	17.8x	19.7%
ASHOK LEYLAND LTD	25.2x	24.4%
TATA MOTORS LIMITED	37.1x	32.8%
LARSEN & TOUBRO LTD.	30.1x	15.2%

Recent News

2 mixed4 general

Compare with RUNGTA IRRIGATION

Equitymaster, 09 Oct

Rungta Irrigation Ltd. Key Financial Ratios – Valuation, Profitability & More

Value Research, 30 Aug

Rungta Irrigation submits AGM voting results; all resolutions passed

scanx.trade, 29 SeptResults

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

Rungta Irrigation Ltd is Rated Sell

MarketsMojo, 06 Oct

Rungta Irrigation Q1 FY27 Results: Revenue Rs 18 Cr, PAT Rs 0.13 Cr and Key Highlights

Univest, 12 AugResults

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

Rungta Irrigation Ltd. Peer Comparison – Compare with Others

Value Research, 30 Aug

Watch Items

Revenue growth is negative (-49.9%) 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 · Growth · Valuation

WeakBusiness Quality · Profitability · 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. 3 high-severity red flags sit above this conclusion and should be read first.

2 of 5 tripwires tripped — Debt / EBITDA stays below 2x; Free cash flow remains positive · see Key things to watch ↑