VMS Industries Limited

Industrials — Waste Management · BSE

₹17.51−₹0.36 (−2.01%)

DalalBaazaar Score

44 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

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, though profits are falling even as sales grow. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:52 pm

Understanding the Business

Company site ↗

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

What does this company do?

VMS Industries Limited engages in the ship recycling activities in India. It is involved in the breaking of old and used ships, as well as the trade in ferrous and non-ferrous metals. The company was incorporated in 1991 and is based in Ahmedabad, India.

IndustryWaste Management

SectorIndustrials

Employees22

Annual revenue₹157 Cr

How does it make money?

Turns over ₹157 Cr a year. Of every ₹100 of sales, about ₹1 reaches shareholders as profit, with ₹3 left at the operating level before interest, tax and depreciation. Each of its 22 employees supports ₹7.16 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹7.16 Cr

Who are its competitors?

The closest listed comparisons in its industry are LARSEN & TOUBRO LTD., SIEMENS LTD, ABB 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 4.7% 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 ROE15.2%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +12% while net margin moved -48% 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+12%

Margin effect-48%

DalalBaazaar Score

44/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue CAGR of only 3.9% — barely ahead of inflation
✗ Profit has declined at 16.3% a year
✗ Profit is compounding slower than revenue — margins are being squeezed as the business grows
✗ Profit fell 78.5% in the latest year

Quality vs. Valuation

Company Quality

38/ 100

Weak

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

Valuation

74/ 100

Cheap

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

Optically cheap, but the underlying business scores poorly. Cheap-and-weak is what a value trap looks like from the outside — the low price may be deserved.

Historical Valuation

Current P/E

9.9x

3Y Median

12.4x

40 monthly readings · mean 17.5x · range 6.3x–45.7x

Sector Median

88.8x

median of 3 sector peers

🟢Current valuation is approximately 20% below its 3y median of 12.4x. 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 89% below the peer median of 88.8x.

vs. its own history

Fair

12.4x median over 40 months · -20%

vs. sector peers

Cheap

88.8x median of 3 peers · -89%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

13.5x

PEG

—

What's Good / What's Bad

🟢 What's Going Well2

Margins are improving
EBITDA margin is up from 1.9% to 3.4% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Return on capital is falling
ROCE has declined from 7.1% to 4.7% — often a sign of competition or overexpansion.

Red Flags

7 items require attention · 3 high · 4 watch

🔴Thin interest coverageFinancial
Operating profit covers interest only 1.8x — little room if earnings dip.
🔴Receivables growing faster than salesFinancial
Receivables up 148% against revenue up 12% — sales are being booked faster than they are collected.
🔴Inventory building faster than salesFinancial
Inventory up 618% against revenue up 12% — stock may not be moving.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 6.7x to 1.8x.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹31 Cr in the latest year.
🟡Profit is decliningFinancial
Net profit is down 41% over 3 years.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 39% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 1.9% to 3.4%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Cheaper than its peers
It trades 89% 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?

The debt load needs earnings to hold up
Debt is 5.5x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Sales are being booked faster than collected
Receivables are up 148% against revenue up 12%. 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 3.9% 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 1%✓ 3.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 5.5x
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✗ -₹31 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✗ 1.8x
How much operating profit can fall before interest stops being comfortably covered.
5Revenue growth stays above 4% a year✗ 3.9% CAGR
Latest reported year was 13.1%. The bar is set below the established compounding rate, so ordinary variation does not trip it.

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

5 good · 2 neutral · 4 weak

Market Cap

₹43 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

9.9x

Cheap

Cheap against the generic band

P/B Ratio

0.44x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹1.76

Profitable

Profitable on a per-share basis

ROE

1.5%

Weak

Weak capital efficiency

ROCE

4.7%

Weak

Low return on total capital employed

Debt/Equity

0.30x

Low

Conservative leverage

Revenue Growth (YoY)

13.1%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-78.5%

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

-₹31 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

-0.5%

Weak

Thin margins leave little room for error

Net Margin

0.9%

Weak

Very little revenue reaches the bottom line

Current Ratio

2.46

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.61

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

17.9 / 18.8

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

47.3

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹140 Cr	₹266 Cr	₹289 Cr	₹157 Cr	+3.9%
EBITDA	₹3 Cr	₹11 Cr	₹11 Cr	₹5 Cr	+27.2%
EBITDA Margin	1.9%	4.0%	3.9%	3.4%	—
PAT (Net Profit)	₹2 Cr	₹6 Cr	₹7 Cr	₹1 Cr	-16.3%
EPS	₹1.42	₹3.56	₹2.91	₹0.6	-24.9%
ROE	4.3%	9.9%	7.1%	1.5%	—
ROCE	7.1%	15.0%	10.8%	4.7%	—
Total Debt	₹29 Cr	₹22 Cr	₹15 Cr	₹29 Cr	+0.5%
Free Cash Flow	-₹6 Cr	₹44 Cr	-₹48 Cr	-₹31 Cr	—

🟢 Revenue has grown at 3.9% a year over 3 years.

🟢 EBITDA has grown at 27.2% a year over 3 years.

🟢 EBITDA Margin has risen from 1.9% to 3.4% over 3 years (+1.5 pts).

🔴 PAT (Net Profit) has shrunk at 16.3% a year over 3 years.

🔴 EPS has shrunk at 24.9% a year over 3 years.

🔴 ROE has fallen from 4.3% to 1.5% over 3 years (-2.8 pts).

🔴 ROCE has fallen from 7.1% to 4.7% over 3 years (-2.4 pts).

🟡 Total Debt has been broadly flat over 3 years (0.5% a year).

Balance Sheet & Cash Flow — FY2026

Total Assets

₹162 Cr

Total Liabilities

₹64 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹31 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

43.7%

Corporate Actions

Ex-Dividend Date

12 Jul 2024

Peer Comparison

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

Recent News

1 negative5 general

VMS Industries Limited Receives ₹1988.18 Lakhs GST Demand and Penalty Order from Bhavnagar Authority

scanx.trade, 29 Apr

VMS Industries Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 03 Sept

VMS Industries Ltd. Key Financial Ratios – Valuation, Profitability & More

Value Research, 31 Aug

VMS Industries passes all 34th AGM resolutions with requisite majority

scanx.trade, 28 Sept

VMS Industries AGM on Sept 28; FY26 revenue falls 45% to ₹1,574 crore

scanx.trade, 03 SeptResults

🔴Potentially negativeReported deterioration, which feeds the growth and margin inputs on this page directly.

VMS Industries Limited (533427) Company Information

Simply Wall Street, 08 Aug

Watch Items

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

StrongValuation

MiddlingFinancial Health

WeakBusiness Quality · Growth · Profitability · Risk

Points for each in the Score ↑

Cheap, but for a reason

The low price is the whole case here, and the business underneath scores poorly. Cheap-and-weak is what a value trap looks like from the outside — it needs a specific reason the numbers are about to improve, not just the observation that they are low. 3 high-severity red flags sit above this conclusion and should be read first.

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