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Check Before You Invest : Rajkamal Synthetics Ltd

BSE: 514028 NSE: ISIN: INE376L01013
  |   Sector:  Miscellaneous   |   Industry:  Trading

Snapshot

Q.1 Which industry/sub-sector does Rajkamal Synthetics Ltd belong to?
Rajkamal Synthetics Ltd belongs to the Miscellaneous sector, operating specifically within the Trading segment.
Q.2 Is Rajkamal Synthetics Ltd a good quality company?
Rajkamal Synthetics Ltd is a quality company, based on a 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 Rajkamal Synthetics Ltd undervalued or overvalued?
Rajkamal Synthetics Ltd appears Overvalued, as its key valuation ratios are higher than 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 83.87 74.40
Price to Book 26.57 30.93
Price to Sales 4.47 25.92
EV to EBITDA 39.17 61.60
Q.4 Is Rajkamal Synthetics Ltd a good buy now?
Rajkamal Synthetics 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 Rajkamal Synthetics Ltd?
Rajkamal Synthetics Ltd revenue growth is 1,781.8% for FY-2025, which is below its 5-year CAGR of 103.03%, indicating slower growth.

Q.2 Gross Profit margin of Rajkamal Synthetics Ltd?
Rajkamal Synthetics Ltd Gross profit margin which is the profit after deduction of direct costs, is 13.4% for FY-2025, which is in line with its 5-year median of 13.4%, indicating stable margins.

Q.3 Operating Profit Margin of Rajkamal Synthetics Ltd?
Rajkamal Synthetics Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 14.73% for FY-2025, which is above its 5-year median of -128.56% indicating increasing margins.

Q.4 Net Profit Margin of Rajkamal Synthetics Ltd?
Rajkamal Synthetics Ltd Net Profit Margin is 10.67% for FY-2025, is in line with its 5-year median of 10.67%, indicating stable margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 13.4 13.4
Operating Profit Margin (%) 14.73 -128.56
Net Profit Margin (%) 10.67 10.67

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Rajkamal Synthetics Ltd?
Rajkamal Synthetics Ltd Return on Asset is 4.65%, which is in line with its 5-year historical median of 4.65%, indicating stable asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Rajkamal Synthetics Ltd?
Rajkamal Synthetics Ltd Return on capital employed is 6.93% for FY-2025, which is in line with its 5-year historical median of 6.93%. 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 Rajkamal Synthetics Ltd?
Rajkamal Synthetics Ltd Return on equity is 49.13% for FY-2025, which is above its 5-year historical median of -32.28%, indicating the business is making better use of its shareholders capital.

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

Q.8 Debt to Equity ratio of Rajkamal Synthetics Ltd?
Rajkamal Synthetics Ltd Debt-to-Equity ratio is 0.07, which is above the industry average of 0.03, indicating higher debt levels in the industry.

Q.9 Debt to cash flow from operations of Rajkamal Synthetics Ltd?
Rajkamal Synthetics Ltd Debt to cash flow from operations is -0.26, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Rajkamal Synthetics Ltd?

Q.1 Promoter shareholding and pledge status of Rajkamal Synthetics Ltd?
Promoters hold 25.47% of the Rajkamal Synthetics Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Rajkamal Synthetics Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Rajkamal Synthetics Ltd vs industry peers?
Rajkamal Synthetics Ltd revenue CAGR is 103.03%, 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 (%) 1 -
Gross Profit Growth (%) 75 17.9
Operating Profit Growth (%) 0 16.4
Net Profit Growth (%) 46.7 17.3
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.44 0.52
ROE (%) 49.13 2.05
ROCE (%) 6.93 3.6
Cash Conversion Cycle (days) 64.89 46

Valuation & price assessment

Q.1 Valuation ratios of Rajkamal Synthetics Ltd vs historical?
The current P/E ratio of 83.87 is higher than its historical median of 74.40, indicating that the stock is trading above its historical average valuation.
Q.2 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 83.87 74.40 33.62
Price to Book 26.57 30.93 1.57
Price to Sales 4.47 25.92 2.21
EV to EBITDA 39.17 61.60 14.09
Q.3 Stock return of Rajkamal Synthetics Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 14.1% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
14.1% 45.7% 13.7% -10.6%

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