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Check Before You Invest : Airfloa Rail Technology Ltd

BSE: 544516 NSE: ISIN: INE0XBS01012
  |   Sector:  Capital Goods & Industrial Consumables   |   Industry:  Engineering - Industrial Equipments

Snapshot

Q.1 Which industry/sub-sector does Airfloa Rail Technology Ltd belong to?
Airfloa Rail Technology Ltd belongs to the Capital Goods & Industrial Consumables sector, operating specifically within the Engineering - Industrial Equipments segment.
Q.2 Is Airfloa Rail Technology Ltd a good quality company?
Airfloa Rail Technology Ltd is a weak quality company, based on a inconsistent multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Airfloa Rail Technology Ltd undervalued or overvalued?
Airfloa Rail Technology Ltd appears Fair, as its key valuation ratios are in line with their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 3-year
Historic Median
Price to Earnings 29.52 31.13
Price to Book 3.78 4.00
Price to Sales 3.92 4.14
EV to EBITDA 16.69 17.53
Q.4 Is Airfloa Rail Technology Ltd a good buy now?
Airfloa Rail Technology Ltd is not a good buy now, based on weak price trend analysis suggesting prices may fall. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Airfloa Rail Technology Ltd?
Airfloa Rail Technology Ltd revenue growth is 61.3% for FY-2025, which is above its 3-year CAGR of 11.85%, indicating faster growth.

Q.2 Gross Profit margin of Airfloa Rail Technology Ltd?
Airfloa Rail Technology Ltd Gross profit margin which is the profit after deduction of direct costs, is 19.5% for FY-2025, which is in line with its 3-year median of 19.5%, indicating stable margins.

Q.3 Operating Profit Margin of Airfloa Rail Technology Ltd?
Airfloa Rail Technology Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 25.13% for FY-2025, which is in line with its 3-year median of 25.13% indicating stable margins.

Q.4 Net Profit Margin of Airfloa Rail Technology Ltd?
Airfloa Rail Technology Ltd Net Profit Margin is 13.28% for FY-2025, is above its 3-year median of 11.93%, indicating increasing margins.
Current Level 3-year
Historic Median
Gross Profit Margin (%) 19.5 19.5
Operating Profit Margin (%) 25.13 25.13
Net Profit Margin (%) 13.28 11.93

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Airfloa Rail Technology Ltd?
Airfloa Rail Technology Ltd Return on Asset is 11.17%, which is above its 3-year historical median of 7.78%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Airfloa Rail Technology Ltd?
Airfloa Rail Technology Ltd Return on capital employed is 31.96% for FY-2025, which is above its 3-year historical median of 29.27%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 14%, indicating value creation.

Q.7 Return on Equity (ROE) of Airfloa Rail Technology Ltd?
Airfloa Rail Technology Ltd Return on equity is 31.09% for FY-2025, which is above its 3-year historical median of 29.13%, indicating the business is making better use of its shareholders capital.

Q.8 Cash conversion cycle of Airfloa Rail Technology Ltd?
Airfloa Rail Technology Ltd Cash conversion cycle is 170 days, above its 3-year historical median of 121 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.
Current Level 3-year
Historic Median
Asset Turnover (x) 0.84 0.65
ROE (%) 31.09 29.13
ROCE (%) 31.96 29.27
Cash Conversion Cycle 170 days 121 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of Airfloa Rail Technology Ltd?
Airfloa Rail Technology Ltd Debt-to-Equity ratio is 0.55, which is above the industry average of 0.18, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Airfloa Rail Technology Ltd?
Airfloa Rail Technology Ltd Debt to cash flow from operations is -13.53, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Airfloa Rail Technology Ltd?

Q.1 Promoter shareholding and pledge status of Airfloa Rail Technology Ltd?
Promoters hold 54.20% of the Airfloa Rail Technology Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Airfloa Rail Technology Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Airfloa Rail Technology Ltd vs industry peers?
Airfloa Rail Technology Ltd revenue CAGR is 11.85%, compared to the industry median CAGR of 12.49%, indicating slower growth and losing its market share.
Profit Metrics
Current Level 3-year
Industry Median
Revenue Growth (%) 61.3 12.5
Gross Profit Growth (%) 58.3 26
Operating Profit Growth (%) 50 26
Net Profit Growth (%) 85.7 26.6
Operating Efficiency
Current Level 3-year
Industry Median
Asset Turnover (x) 0.84 0.92
ROE (%) 31.09 16.45
ROCE (%) 31.96 19.55
Cash Conversion Cycle (days) 170.41 97

Valuation & price assessment

Q.1 Stock return of Airfloa Rail Technology Ltd over the last decade?
Over the last - year(s), the stock has delivered a CAGR of N/A% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
- - - -
Q.2 Valuation ratios of Airfloa Rail Technology Ltd vs historical?
The current P/E ratio of 29.52 is lower than its historical median of 31.13, indicating that the stock is trading below its historical average valuation.
Q.3 How do the current valuation ratios compare with 3-year historical median and industry numbers?
Valuation Ratios Current 3-year
Historic Median
3-year
Industry Median
Price to Earnings 29.52 31.13 32.30
Price to Book 3.78 4.00 3.57
Price to Sales 3.92 4.14 3.21
EV to EBITDA 16.69 17.53 16.34

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