MoneyWorks4Me

Check Before You Invest : Raj Consumer Care Ltd

BSE: 533093 NSE: ROML ISIN: INE294G01026
  |   Sector:  FMCG   |   Industry:  Edible Oil

Snapshot

Q.1 Which industry/sub-sector does Raj Consumer Care Ltd belong to?
Raj Consumer Care Ltd belongs to the FMCG sector, operating specifically within the Edible Oil segment.
Q.2 Is Raj Consumer Care Ltd a good quality company?
Raj Consumer Care 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 Raj Consumer Care Ltd undervalued or overvalued?
Raj Consumer Care Ltd appears Somewhat Undervalued, as its key valuation ratios are lower 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 15.42 35.23
Price to Book 10.37 -9.28
Price to Sales 0.44 0.63
EV to EBITDA 13.7 22.91
Q.4 Is Raj Consumer Care Ltd a good buy now?
Raj Consumer Care 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 Raj Consumer Care Ltd?
Raj Consumer Care Ltd revenue growth is -8.2% for FY-2025, which is below its 5-year CAGR of 6.68%, indicating slower growth.

Q.2 Gross Profit margin of Raj Consumer Care Ltd?
Raj Consumer Care Ltd Gross profit margin which is the profit after deduction of direct costs, is 4.1% for FY-2025, which is above its 5-year median of 3.5%, indicating increasing margins.

Q.3 Operating Profit Margin of Raj Consumer Care Ltd?
Raj Consumer Care Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 4.92% for FY-2025, which is above its 5-year median of 3.5% indicating increasing margins.

Q.4 Net Profit Margin of Raj Consumer Care Ltd?
Raj Consumer Care Ltd Net Profit Margin is 2.36% for FY-2025, is above its 5-year median of 2.19%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 4.1 3.5
Operating Profit Margin (%) 4.92 3.5
Net Profit Margin (%) 2.36 2.19

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Raj Consumer Care Ltd?
Raj Consumer Care Ltd Return on Asset is 6.28%, which is in line with its 5-year historical median of 6.28%, indicating stable asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Raj Consumer Care Ltd?
Raj Consumer Care Ltd Return on capital employed is 15.26% for FY-2025, which is in line with its 5-year historical median of 15.26%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 14%, indicating value creation.

Q.7 Cash conversion cycle of Raj Consumer Care Ltd?
Raj Consumer Care Ltd Cash conversion cycle is 33 days, above its 5-year historical median of 2 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.

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

Q.8 Debt to Equity ratio of Raj Consumer Care Ltd?
Raj Consumer Care Ltd Debt-to-Equity ratio is -7.84, which is lower the industry average of 0.15, indicating lower debt levels in the industry.

Q.9 Debt to cash flow from operations of Raj Consumer Care Ltd?
Raj Consumer Care Ltd Debt to cash flow from operations is 108.25, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Raj Consumer Care Ltd?

Q.1 Promoter shareholding and pledge status of Raj Consumer Care Ltd?
Promoters hold 75.00% of the Raj Consumer Care Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Raj Consumer Care Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Raj Consumer Care Ltd vs industry peers?
Raj Consumer Care Ltd revenue CAGR is 6.68%, compared to the industry median CAGR of 4.81%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) -8.2 4.8
Gross Profit Growth (%) 29.8 16.4
Operating Profit Growth (%) 233.1 15.3
Net Profit Growth (%) 57.9 15.3
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 2.66 2.51
ROE (%) - 7.9
ROCE (%) 15.26 11.17
Cash Conversion Cycle (days) 33.29 45

Valuation & price assessment

Q.1 Stock return of Raj Consumer Care Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 43.9% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
43.9% -9.6% -1.8% -13.5%
Q.2 Valuation ratios of Raj Consumer Care Ltd vs historical?
The current P/E ratio of 15.42 is lower than its historical median of 35.23, indicating that the stock is trading below 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 15.42 35.23 29.43
Price to Book 10.37 -9.28 2.26
Price to Sales 0.44 0.63 0.65
EV to EBITDA 13.7 22.91 16.89

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