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Check Before You Invest : Rishi Laser Ltd

BSE: 526861 NSE: ISIN: INE988D01012
  |   Sector:  Capital Goods & Industrial Consumables   |   Industry:  Engineering - Industrial Equipments

Snapshot

Q.1 Which industry/sub-sector does Rishi Laser Ltd belong to?
Rishi Laser Ltd belongs to the Capital Goods & Industrial Consumables sector, operating specifically within the Engineering - Industrial Equipments segment.
Q.2 Is Rishi Laser Ltd a good quality company?
Rishi Laser 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 Rishi Laser Ltd undervalued or overvalued?
Rishi Laser 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 17.38 12.51
Price to Book 2.42 2.68
Price to Sales 0.78 0.41
EV to EBITDA 9.07 6.86
Q.4 Is Rishi Laser Ltd a good buy now?
Rishi Laser 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 Rishi Laser Ltd?
Rishi Laser Ltd revenue growth is 7.6% for FY-2025, which is below its 5-year CAGR of 10.58%, indicating slower growth.

Q.2 Gross Profit margin of Rishi Laser Ltd?
Rishi Laser Ltd Gross profit margin which is the profit after deduction of direct costs, is 7.4% for FY-2025, which is above its 5-year median of 5.5%, indicating increasing margins.

Q.3 Operating Profit Margin of Rishi Laser Ltd?
Rishi Laser Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 9.12% for FY-2025, which is above its 5-year median of 6.3% indicating increasing margins.

Q.4 Net Profit Margin of Rishi Laser Ltd?
Rishi Laser Ltd Net Profit Margin is 5.48% for FY-2025, is above its 5-year median of 3.66%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 7.4 5.5
Operating Profit Margin (%) 9.12 6.3
Net Profit Margin (%) 5.48 3.66

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Rishi Laser Ltd?
Rishi Laser Ltd Return on Asset is 7.62%, which is above its 5-year historical median of 5.53%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Rishi Laser Ltd?
Rishi Laser Ltd Return on capital employed is 25.12% for FY-2025, which is in line with its 5-year historical median of 25.12%. 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 Rishi Laser Ltd?
Rishi Laser Ltd Return on equity is 29.2% for FY-2025, which is in line with its 5-year historical median of 29.2%, indicating the business is making similar use of its shareholders capital.

Q.8 Cash conversion cycle of Rishi Laser Ltd?
Rishi Laser Ltd Cash conversion cycle is 6 days, above its 5-year historical median of -6 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) 1.39 1.39
ROE (%) 29.2 29.2
ROCE (%) 25.12 25.12
Cash Conversion Cycle 6 days -6 days

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

Q.9 Debt to Equity ratio of Rishi Laser Ltd?
Rishi Laser Ltd Debt-to-Equity ratio is 0.52, 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 Rishi Laser Ltd?
Rishi Laser Ltd Debt to cash flow from operations is 1.88, which is at a moderate level.

Ownership & governance

D: Promoter shareholding and pledge status of Rishi Laser Ltd?

Q.1 Promoter shareholding and pledge status of Rishi Laser Ltd?
Promoters hold 16.16% of the Rishi Laser Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Rishi Laser Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Rishi Laser Ltd vs industry peers?
Rishi Laser Ltd revenue CAGR is 10.58%, compared to the industry median CAGR of 3.04%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 7.6 3
Gross Profit Growth (%) 10 23.6
Operating Profit Growth (%) 8.3 21.7
Net Profit Growth (%) -11.1 27.1
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 1.39 0.89
ROE (%) 29.2 12.09
ROCE (%) 25.12 14.64
Cash Conversion Cycle (days) 5.86 98

Valuation & price assessment

Q.1 Stock return of Rishi Laser Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 16.1% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
16.1% 53.3% 66.8% -8.7%
Q.2 Valuation ratios of Rishi Laser Ltd vs historical?
The current P/E ratio of 17.38 is higher than its historical median of 12.51, 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 17.38 12.51 29.36
Price to Book 2.42 2.68 2.91
Price to Sales 0.78 0.41 2.93
EV to EBITDA 9.07 6.86 15.77

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