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Check Before You Invest : Organic Recycling Systems Ltd

BSE: 543997 NSE: ISIN: INE0MIO01019
  |   Sector:  Capital Goods & Industrial Consumables   |   Industry:  Engineering

Snapshot

Q.1 Which industry/sub-sector does Organic Recycling Systems Ltd belong to?
Organic Recycling Systems Ltd belongs to the Capital Goods & Industrial Consumables sector, operating specifically within the Engineering segment.
Q.2 Is Organic Recycling Systems Ltd a good quality company?
Organic Recycling Systems 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 Organic Recycling Systems Ltd undervalued or overvalued?
Organic Recycling Systems 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 5-year
Historic Median
Price to Earnings 57.98 58.08
Price to Book 1.21 1.14
Price to Sales 5.33 9.79
EV to EBITDA 33.97 37.07
Q.4 Is Organic Recycling Systems Ltd a good buy now?
Organic Recycling Systems 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 Organic Recycling Systems Ltd?
Organic Recycling Systems Ltd revenue growth is 39.2% for FY-2025, which is above its 5-year CAGR of 23.48%, indicating faster growth.

Q.2 Gross Profit margin of Organic Recycling Systems Ltd?
Organic Recycling Systems Ltd Gross profit margin which is the profit after deduction of direct costs, is 21.5% for FY-2025, which is below its 5-year median of 24.5%, indicating decreasing margins.

Q.3 Operating Profit Margin of Organic Recycling Systems Ltd?
Organic Recycling Systems Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 12.32% for FY-2025, which is in line with its 5-year median of 12.76% indicating stable margins.

Q.4 Net Profit Margin of Organic Recycling Systems Ltd?
Organic Recycling Systems Ltd Net Profit Margin is 13.55% for FY-2025, is below its 5-year median of 17.35%, indicating decreasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 21.5 24.5
Operating Profit Margin (%) 12.32 12.76
Net Profit Margin (%) 13.55 17.35

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Organic Recycling Systems Ltd?
Organic Recycling Systems Ltd Return on Asset is 1.49%, which is in line with its 5-year historical median of 1.49%, indicating stable asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Organic Recycling Systems Ltd?
Organic Recycling Systems Ltd Return on capital employed is 2.21% for FY-2025, which is below its 5-year historical median of 2.49%. The current ROCE is below its estimated weighted average cost of capital (WACC) of 14%, indicating value preservation.

Q.7 Return on Equity (ROE) of Organic Recycling Systems Ltd?
Organic Recycling Systems Ltd Return on equity is 1.94% for FY-2025, which is below its 5-year historical median of 2.31%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of Organic Recycling Systems Ltd?
Organic Recycling Systems Ltd Cash conversion cycle is 242 days, above its 5-year historical median of 26 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 0.11 0.07
ROE (%) 1.94 2.31
ROCE (%) 2.21 2.49
Cash Conversion Cycle 242 days 26 days

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

Q.9 Debt to Equity ratio of Organic Recycling Systems Ltd?
Organic Recycling Systems Ltd Debt-to-Equity ratio is 0.16, which is lower the industry average of 0.27, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Organic Recycling Systems Ltd?
Organic Recycling Systems Ltd Debt to cash flow from operations is -1.94, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Organic Recycling Systems Ltd?

Q.1 Promoter shareholding and pledge status of Organic Recycling Systems Ltd?
Promoters hold 18.10% of the Organic Recycling Systems Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Organic Recycling Systems Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Organic Recycling Systems Ltd vs industry peers?
Organic Recycling Systems Ltd revenue CAGR is 23.48%, compared to the industry median CAGR of 0%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 39.2 -
Gross Profit Growth (%) 25 16.7
Operating Profit Growth (%) -40 16.1
Net Profit Growth (%) - 26.8
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.11 0.6
ROE (%) 1.94 6.11
ROCE (%) 2.21 10.15
Cash Conversion Cycle (days) 241.7 79

Valuation & price assessment

Q.1 Stock return of Organic Recycling Systems Ltd over the last decade?
Over the last 1 year(s), the stock has delivered a CAGR of -20.2% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
- - - -20.2%
Q.2 Valuation ratios of Organic Recycling Systems Ltd vs historical?
The current P/E ratio of 57.98 is in line with than its historical median of 58.08, indicating that the stock is trading near its historical average valuation.
Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median
5-year
Industry Median
Price to Earnings 57.98 58.08 29.42
Price to Book 1.21 1.14 2.38
Price to Sales 5.33 9.79 2.22
EV to EBITDA 33.97 37.07 15.76

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