Driven by moderate debt load, negative free cash flow, the company is currently loss-making.
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, 6:08 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.
The 60-second version of Vamshi Rubber Limited — what it does, how it earns, and who it competes with, before any of the numbers below.
What does this company do?
Vamshi Rubber Limited engages in the manufacture and sale of tire retreading materials in India. It provides precured tread rubber, vulcanizing solutions, bonding gums, extruded rope rubber, rubber compound sheets, cushion gum, curing envelopes, CBTR, and cushion gum ropes.
IndustryAuto Parts
SectorConsumer Cyclical
Employees136
Annual revenue₹84 Cr
How does it make money?
Turns over ₹84 Cr a year. Of every ₹100 of sales, about ₹1 reaches shareholders as profit, with ₹5 left at the operating level before interest, tax and depreciation. Each of its 136 employees supports ₹61.9 lakh of revenue a year, the signature of a people-led business.
EBITDA margin4.6%
Net margin0.8%
Revenue / employee₹61.9 lakh
Who are its competitors?
The closest listed comparisons in its industry are BOSCH LIMITED, MARUTI SUZUKI INDIA LTD., TVS MOTOR COMPANY LTD, EICHER MOTORS LTD. These are the companies its valuation and returns are measured against elsewhere in this report.
BOSCH LIMITEDP/E 56.9x · ROE 15.9%
MARUTI SUZUKI INDIA LTD.P/E 25.2x · ROE 13.4%
TVS MOTOR COMPANY LTDP/E 56.8x · ROE 35.8%
EICHER MOTORS LTDP/E 34.7x · ROE 23.0%
What is its competitive advantage?Little sign of one
Returns on capital of 14.9% 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.
ROCE14.9%
ROE4.4%
Peer median ROE23.0%
What has been driving growth?
Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +5% while net margin moved +586% 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+5%
Margin effect+586%
DalalBaazaar Score
43/ 100
Moderate
Weighted across six categories. Every point is explained below.
✗ Debt/Equity of 1.33x is on the heavy side
• Current ratio of 1.13 covers short-term liabilities, without much slack
✗ Free cash flow is negative — growth is being funded by borrowing or fresh equity
✗ Interest cover of only 1.5x — little room if profits dip
Quality vs. Valuation
Company Quality
42/ 100
Weak
How good the business is, ignoring the share price entirely.
vs
Valuation
44/ 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
P/E (Trailing)
Not meaningful
P/B
1.05x
EV/EBITDA
9.3x
PEG
—
Dividend Yield
None
What's Good / What's Bad
🟢 What's Going Well2
Return on equity is rising
ROE has improved from 0.7% to 4.4%.
Consistently profitable
Profitable in every one of the last 4 reported years.
🔴 What Needs Attention1
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Red Flags
2 items require attention · 1 high · 1 watch
🔴Thin interest coverageFinancial
Operating profit covers interest only 1.5x — little room if earnings dip.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹1 Cr in the latest year.
Investment Thesis
🟢 Bull CaseWhat could make this work?
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?
The debt load needs earnings to hold up
Debt is 5.2x 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 1.7% 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.
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
1EBITDA margin holds above 3%✓ 4.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 5.2x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Free cash flow remains positive✗ -₹1 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✗ 1.5x
How much operating profit can fall before interest stops being comfortably covered.
5Revenue growth stays above 4% a year✗ 1.7% CAGR
Latest reported year was -31.8%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
Investment Checklist
3 / 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
1 good · 4 neutral · 6 weak
Market Cap
₹16 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
1.05x
Reasonable
Reasonable against the company's book value
EPS (TTM)
₹-0.16
Loss-making
Negative earnings per share — the business is losing money
ROE
4.4%
Weak
Weak capital efficiency
ROCE
14.9%
Moderate
Moderate return on the capital in the business
Debt/Equity
1.33x
Moderate
Moderate leverage
Revenue Growth (YoY)
-31.8%
Shrinking
Sales are contracting
Profit Growth (YoY)
-1.0%
Falling
Profits are shrinking
Dividend Yield
None
None
No dividend yield reported — usually means no payout, but verify if one was recently initiated
Free Cash Flow
-₹1 Cr
Cash burning
Spending more cash than the operations bring in
More Metrics
CMP
₹37.7
Operating Margin
-2.2%
Weak
Thin margins leave little room for error
Net Margin
-0.5%
Weak
Very little revenue reaches the bottom line
Current Ratio
1.13
Adequate
Adequate, but no real cushion
Beta (vs Nifty)
-0.02
Defensive
Steadier than the market
52W Range Position
7%
Near low
Near its 52-week low
Technical Snapshot
SMA 20 / SMA 50
38.0 / 39.2
Bearish alignment (short < long)
Price vs SMA 200
Below
Long-term downtrend
RSI (14)
48.5
Neutral momentum
Financial Trend (4-Year)
Metric
FY23
FY24
FY25
FY26
3Y CAGR
Revenue
₹80 Cr
₹77 Cr
₹86 Cr
₹84 Cr
+1.7%
EBITDA
₹3 Cr
₹4 Cr
₹4 Cr
₹4 Cr
+8.6%
EBITDA Margin
3.8%
5.2%
5.2%
4.6%
—
PAT (Net Profit)
₹0 Cr
₹1 Cr
₹1 Cr
₹1 Cr
+93.3%
EPS
₹0.22
₹1.45
₹2.01
₹1.41
+85.8%
ROE
0.7%
4.5%
4.7%
4.4%
—
ROCE
13.1%
15.7%
14.0%
14.9%
—
Total Debt
₹20 Cr
₹18 Cr
₹21 Cr
₹20 Cr
-0.1%
Free Cash Flow
-₹0 Cr
₹2 Cr
-₹2 Cr
-₹1 Cr
—
🟡 Revenue has been broadly flat over 3 years (1.7% a year).
🟢 EBITDA has grown at 8.6% a year over 3 years.
🟡 EBITDA Margin has held roughly flat at 4.6% over 3 years.
🟢 PAT (Net Profit) has grown at 93.3% a year over 3 years.
🟢 EPS has grown at 85.8% a year over 3 years.
🟢 ROE has risen from 0.7% to 4.4% over 3 years (+3.7 pts).
🟢 ROCE has risen from 13.1% to 14.9% over 3 years (+1.8 pts).
🟡 Total Debt has been broadly flat over 3 years (-0.1% a year).
Revenue growth is negative (-31.8%) on the latest reported period — check if this is one-off or a trend.
Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
Cross-check against the company's latest quarterly filing / investor presentation before acting.
DalalBaazaar Thesis
🔴Business QualityWeak7.7/20
🔴Financial HealthStretched7/20
🟡GrowthModest11.3/20
🔴ProfitabilityWeak5.9/15
🟡ValuationFair7.1/15
🔴RiskHigh4/10
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.
