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Check Before You Invest : Rajratan Global Wire Ltd

BSE: 517522 NSE: RAJRATAN ISIN: INE451D01029
  |   Sector:  Automobiles   |   Industry:  Auto Ancillary

Snapshot

Q.1 Which industry/sub-sector does Rajratan Global Wire Ltd belong to?
Rajratan Global Wire Ltd belongs to the Automobiles sector, operating specifically within the Auto Ancillary segment.
Q.2 Is Rajratan Global Wire Ltd a good quality company?
Rajratan Global Wire Ltd is a average quality company, based on a somewhat consistent 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 Rajratan Global Wire Ltd undervalued or overvalued?
Rajratan Global Wire 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 50.62 51.53
Price to Book 5.4 10.16
Price to Sales 3.14 5.30
EV to EBITDA 25.21 30.06
Q.4 Is Rajratan Global Wire Ltd a good buy now?
Rajratan Global Wire Ltd is a good buy now, based on strong price trend analysis suggesting prices may rise. 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 Rajratan Global Wire Ltd?
Rajratan Global Wire Ltd revenue growth is 6.3% for FY-2025, which is below its 5-year CAGR of 15.63%, indicating slower growth.

Q.2 Gross Profit margin of Rajratan Global Wire Ltd?
Rajratan Global Wire Ltd Gross profit margin which is the profit after deduction of direct costs, is 12.5% for FY-2025, which is below its 5-year median of 16%, indicating decreasing margins.

Q.3 Operating Profit Margin of Rajratan Global Wire Ltd?
Rajratan Global Wire Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 16.02% for FY-2025, which is below its 5-year median of 18.59% indicating decreasing margins.

Q.4 Net Profit Margin of Rajratan Global Wire Ltd?
Rajratan Global Wire Ltd Net Profit Margin is 7.83% for FY-2025, is below its 5-year median of 10.96%, indicating decreasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 12.5 16
Operating Profit Margin (%) 16.02 18.59
Net Profit Margin (%) 7.83 10.96

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Rajratan Global Wire Ltd?
Rajratan Global Wire Ltd Return on Asset is 7.09%, which is below its 5-year historical median of 12.05%, indicating deteriorated asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Rajratan Global Wire Ltd?
Rajratan Global Wire Ltd Return on capital employed is 15.96% for FY-2025, which is below its 5-year historical median of 23%. 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 Rajratan Global Wire Ltd?
Rajratan Global Wire Ltd Return on equity is 12.65% for FY-2025, which is below its 5-year historical median of 22.8%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of Rajratan Global Wire Ltd?
Rajratan Global Wire Ltd Cash conversion cycle is 44 days, in line with its 5-year historical median of 44 days, indicating stable working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 0.92 1.1
ROE (%) 12.65 22.8
ROCE (%) 15.96 23
Cash Conversion Cycle 44 days 44 days

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

Q.9 Debt to Equity ratio of Rajratan Global Wire Ltd?
Rajratan Global Wire Ltd Debt-to-Equity ratio is 0.48, which is above the industry average of 0.40, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Rajratan Global Wire Ltd?
Rajratan Global Wire Ltd Debt to cash flow from operations is 7.4, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Rajratan Global Wire Ltd?

Q.1 Promoter shareholding and pledge status of Rajratan Global Wire Ltd?
Promoters hold 65.20% of the Rajratan Global Wire Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Rajratan Global Wire Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Rajratan Global Wire Ltd vs industry peers?
Rajratan Global Wire Ltd revenue CAGR is 15.63%, compared to the industry median CAGR of 11.82%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 6.3 11.8
Gross Profit Growth (%) -10.7 16.3
Operating Profit Growth (%) -3.1 14.9
Net Profit Growth (%) -17.9 20.2
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.92 1.23
ROE (%) 12.65 11.57
ROCE (%) 15.96 13.36
Cash Conversion Cycle (days) 44.12 47

Valuation & price assessment

Q.1 Stock return of Rajratan Global Wire Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 37.9% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
37.9% 16.5% -17.4% 16%
Q.2 Valuation ratios of Rajratan Global Wire Ltd vs historical?
The current P/E ratio of 50.62 is in line with than its historical median of 51.53, 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 50.62 51.53 28.71
Price to Book 5.4 10.16 2.99
Price to Sales 3.14 5.30 1.35
EV to EBITDA 25.21 30.06 11.85

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