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INVESTMENT INSIGHTS

Check Before You Invest : Remsons Industries Ltd

BSE: 530919 NSE: REMSONSIND ISIN: INE474C01023
  |   Sector:  Automobiles   |   Industry:  Auto Ancillary

Snapshot

Q.1 Which industry/sub-sector does Remsons Industries Ltd belong to?
Remsons Industries Ltd belongs to the Automobiles sector, operating specifically within the Auto Ancillary segment.
Q.2 Is Remsons Industries Ltd a good quality company?
Remsons Industries Ltd is a good quality company, based on a consistently good 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 Remsons Industries Ltd undervalued or overvalued?
Remsons Industries Ltd appears Somewhat 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 41.37 33.87
Price to Book 3.36 4.00
Price to Sales 1.3 0.99
EV to EBITDA 16.06 13.75
Q.4 Is Remsons Industries Ltd a good buy now?
Remsons Industries 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 Remsons Industries Ltd?
Remsons Industries Ltd revenue growth is 8.3% for FY-2025, which is below its 5-year CAGR of 11.82%, indicating slower growth.

Q.2 Gross Profit margin of Remsons Industries Ltd?
Remsons Industries Ltd Gross profit margin which is the profit after deduction of direct costs, is 8.3% for FY-2025, which is above its 5-year median of 6.4%, indicating increasing margins.

Q.3 Operating Profit Margin of Remsons Industries Ltd?
Remsons Industries Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 8.76% for FY-2025, which is above its 5-year median of 7.78% indicating increasing margins.

Q.4 Net Profit Margin of Remsons Industries Ltd?
Remsons Industries Ltd Net Profit Margin is 3.98% for FY-2025, is above its 5-year median of 3.4%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 8.3 6.4
Operating Profit Margin (%) 8.76 7.78
Net Profit Margin (%) 3.98 3.4

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Remsons Industries Ltd?
Remsons Industries Ltd Return on Asset is 5.2%, which is in line with its 5-year historical median of 5.17%, indicating stable asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Remsons Industries Ltd?
Remsons Industries Ltd Return on capital employed is 12.2% for FY-2025, which is below its 5-year historical median of 14.02%. 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 Remsons Industries Ltd?
Remsons Industries Ltd Return on equity is 10.15% for FY-2025, which is below its 5-year historical median of 12.01%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of Remsons Industries Ltd?
Remsons Industries Ltd Cash conversion cycle is 56 days, above its 5-year historical median of 50 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) 1.31 1.58
ROE (%) 10.15 12.01
ROCE (%) 12.2 14.02
Cash Conversion Cycle 56 days 50 days

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

Q.9 Debt to Equity ratio of Remsons Industries Ltd?
Remsons Industries Ltd Debt-to-Equity ratio is 0.58, 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 Remsons Industries Ltd?
Remsons Industries Ltd Debt to cash flow from operations is 8.7, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Remsons Industries Ltd?

Q.1 Promoter shareholding and pledge status of Remsons Industries Ltd?
Promoters hold 65.52% of the Remsons Industries Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Remsons Industries Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Remsons Industries Ltd vs industry peers?
Remsons Industries Ltd revenue CAGR is 11.82%, compared to the industry median CAGR of 11.89%, indicating stable growth and maintaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 8.3 11.9
Gross Profit Growth (%) 15 16.2
Operating Profit Growth (%) 4.4 14.7
Net Profit Growth (%) 22.2 20.1
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 1.31 1.24
ROE (%) 10.15 11.65
ROCE (%) 12.2 13.5
Cash Conversion Cycle (days) 55.55 46

Valuation & price assessment

Q.1 Stock return of Remsons Industries Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 28.9% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR		 28.9% 29.4% 38.4% 1.5%
Q.2 Valuation ratios of Remsons Industries Ltd vs historical?
The current P/E ratio of 41.37 is higher than its historical median of 33.87, indicating that the stock is trading above 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 41.37 33.87 28.71
Price to Book 3.36 4.00 2.99
Price to Sales 1.3 0.99 1.35
EV to EBITDA 16.06 13.75 11.85

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