Shree Refrigerations Limited

Industrials — Specialty Industrial Machinery · BSE

₹336.75−₹5.70 (−1.66%)

DalalBaazaar Score

65 / 100

🟢 Good

Verdict

NEUTRAL

Risk

High

Driven by negative free cash flow, micro-cap size, which brings thin liquidity, a very high earnings multiple, which leaves little margin for disappointment.

In simple words: Reasonable but unspectacular business quality, with both sales and profits growing well. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:07 pm

Caution warranted. Multiple fundamental metrics — flagged in red below — point to either valuation stretch, leverage risk, or weakening profitability. This doesn't mean avoid the stock outright, but it does mean the burden of proof is on the growth story to justify the current price.

Understanding the Business

Company site ↗

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

What does this company do?

Shree Refrigerations Limited manufactures and sells chillers, refrigeration and air conditioning appliances, and other parts of heating, ventilation, air conditioning (HVAC) industry in India.

IndustrySpecialty Industrial Machinery

SectorIndustrials

Employees328

Annual revenue₹154 Cr

How does it make money?

Turns over ₹154 Cr a year. Of every ₹100 of sales, about ₹14 reaches shareholders as profit, with ₹22 left at the operating level before interest, tax and depreciation. Each of its 328 employees supports ₹46.8 lakh of revenue a year, the signature of a people-led business.

EBITDA margin21.8%

Net margin14.0%

Revenue / employee₹46.8 lakh

Who are its competitors?

The closest listed comparisons in its industry are SIEMENS LTD, ABB INDIA LIMITED, LARSEN & TOUBRO LTD., HAVELLS INDIA LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

SIEMENS LTDP/E 88.8x · ROE 10.5%

ABB INDIA LIMITEDP/E 92.6x · ROE 19.1%

LARSEN & TOUBRO LTD.P/E 30.1x · ROE 15.2%

HAVELLS INDIA LIMITEDP/E 43.5x · ROE 17.1%

What is its competitive advantage?Little sign of one

Returns on capital of 12.6% 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.

ROCE12.6%

ROE13.0%

Peer median ROE17.1%

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +204% while net margin moved +176% 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+204%

Margin effect+176%

DalalBaazaar Score

65/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ 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

74/ 100

Good

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

Valuation

64/ 100

Fair

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

52.7x

1.3Y Median

70.8x

16 monthly readings · mean 75.6x · range 48.6x–116.2x

Sector Median

66.2x

median of 4 sector peers

🟢Current valuation is approximately 26% below its 1.3y median of 70.8x. 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 20% below the peer median of 66.2x.

vs. its own history

Cheap

70.8x median over 16 months · -26%

vs. sector peers

Cheap

66.2x median of 4 peers · -20%

vs. generic bands

Expensive

Above 35x

P/E (Trailing)

52.7x

P/B

5.56x

EV/EBITDA

35.5x

PEG

0.51

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 18.5% to 21.8% over 3 years.
Return on equity is rising
ROE has improved from 5.7% to 10.0%.
Valuation below its historical average
At 52.7x the stock trades 26% below its own median of 70.8x.
Very low debt
Debt/Equity of 0.17x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention3

Free cash flow is negative
The business is not currently covering its capital spending from operations.
Return on capital is falling
ROCE has declined from 16.3% to 12.6% — often a sign of competition or overexpansion.
Receivables growing faster than sales
Receivables are up 234% against revenue growth of 204% — customers are taking longer to pay.

Red Flags

2 items require attention · 1 high · 1 watch

🔴Free cash flow negative for 4 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 234% against revenue up 204% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 18.5% to 21.8%. 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 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.
Cheaper than its peers
It trades 20% 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 234% against revenue up 204%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
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.

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

1Revenue growth stays above 34% a year✓ 44.8% CAGR
Latest reported year was 116.0%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 20%✓ 21.8%
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✓ 1.1x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 10%✓ 12.6%
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

4 good · 4 neutral · 3 weak

Market Cap

₹1,205 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

52.7x

Expensive

Expensive — verify against sector peers

P/B Ratio

5.56x

Rich

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

EPS (TTM)

₹6.39

Profitable

Profitable on a per-share basis

ROE

13.0%

Moderate

Moderate capital efficiency

ROCE

12.6%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.17x

Low

Conservative leverage

Revenue Growth (YoY)

116.0%

Healthy

Healthy top-line growth

Profit Growth (YoY)

233.7%

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

-₹14 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹336.75

ROA

7.2%

Average

Average asset productivity

Operating Margin

23.6%

Good

Healthy core-business profitability

Net Margin

14.0%

Good

Strong bottom-line conversion

Current Ratio

3.29

Comfortable

Healthy short-term liquidity

52W Range Position

63%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

379.9 / 378.7

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

2.3

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹51 Cr	₹80 Cr	₹99 Cr	₹154 Cr	+44.8%
EBITDA	₹9 Cr	₹22 Cr	₹27 Cr	₹33 Cr	+52.9%
EBITDA Margin	18.5%	27.7%	27.3%	21.8%	—
PAT (Net Profit)	₹3 Cr	₹12 Cr	₹13 Cr	₹22 Cr	+103.0%
EPS	₹0.72	₹3.24	₹3.54	—	—
ROE	5.7%	19.0%	11.0%	10.0%	—
ROCE	16.3%	30.8%	18.2%	12.6%	—
Total Debt	₹33 Cr	₹40 Cr	₹45 Cr	₹37 Cr	+4.0%
Free Cash Flow	-₹5 Cr	-₹7 Cr	-₹33 Cr	-₹11 Cr	—

🟢 Revenue has grown at 44.8% a year over 3 years.

🟢 EBITDA has grown at 52.9% a year over 3 years.

🟢 EBITDA Margin has risen from 18.5% to 21.8% over 3 years (+3.3 pts).

🟢 PAT (Net Profit) has grown at 103.0% a year over 3 years.

🟢 ROE has risen from 5.7% to 10.0% over 3 years (+4.3 pts).

🔴 ROCE has fallen from 16.3% to 12.6% over 3 years (-3.7 pts).

🔴 Total Debt has grown at 4.0% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹294 Cr

Total Liabilities

₹78 Cr

Total Debt

₹37 Cr

Cash & Equivalents

₹58 Cr

Operating Cash Flow

₹14 Cr

Capex

-₹24 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

61.8%

Peer Comparison

Company	P/E	ROE
SIEMENS LTD	88.8x	10.5%
ABB INDIA LIMITED	92.6x	19.1%
LARSEN & TOUBRO LTD.	30.1x	15.2%
HAVELLS INDIA LIMITED	43.5x	17.1%

Recent News

4 mixed2 general

Shree Refrigerations files FY26 earnings call transcript

scanx.trade, 21 MayResults

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

SHREE REFRIGERATIONS LTD. Fact Sheet, SHREE REFRIGERATIONS LTD. Financial Results

Equitymaster, 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.

Defence Stock In Focus: Shree Refrigerations Inaugurates Manufacturing Facility in Maharashtra

Goodreturns, 20 Jun

Ashish Kacholia Gains Rs 2,31,09,714 In A Single Day As Defence HVAC Company Supplies Systems For Newly Commissioned Indian Navy Warships

Dalal Street Investment Journal, 22 JunCapacity

🟡Mixed / dependsCapacity additions can raise revenue over two to three years, but the capital spend usually pressures free cash flow first. Worth checking whether the capex is funded from operations or from borrowing.

Ashish Kacholia's picks: 12 stocks rally up to 130% in CY26, 3 turned multibaggers; 2 new Q4 bets

The Economic Times, 13 JunResults

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

SHREE REFRIGERATIONS LIMITED Share Price

Upstox, 05 May

Watch Items

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

🟡Business QualityAdequate11.8/20

🟢Financial HealthStrong14.5/20

🟢GrowthStrong18.5/20

🟢ProfitabilityStrong10.7/15

🔴ValuationDemanding6.7/15

🔴RiskHigh2.5/10

Good business at a fair price

A sound business at a reasonable valuation. Suitable for a long-term holding, with the valuation and the direction of margins worth watching rather than the business itself. 1 high-severity red flag sits above this conclusion and should be read first.

This thesis breaks if

✓Revenue growth stays above 34% a year44.8% CAGR
✓EBITDA margin holds above 20%21.8%
✗Free cash flow remains positive-₹11 Cr
✓Debt / EBITDA stays below 2x1.1x
✓ROCE stays above 10%12.6%