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Check Before You Invest : Rose Merc. Ltd

BSE: 512115 NSE: ISIN: INE649C01012
  |   Sector:  Miscellaneous   |   Industry:  Trading

Snapshot

Q.1 Which industry/sub-sector does Rose Merc. Ltd belong to?
Rose Merc. Ltd belongs to the Miscellaneous sector, operating specifically within the Trading segment.
Q.2 Is Rose Merc. Ltd a good quality company?
Rose Merc. 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 Rose Merc. Ltd undervalued or overvalued?
Rose Merc. 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 3-year
Historic Median
Price to Earnings 95.3 58.35
Price to Book 1.21 1.91
Price to Sales 11.56 13.21
EV to EBITDA 68.06 55.09
Q.4 Is Rose Merc. Ltd a good buy now?
Rose Merc. 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 Rose Merc. Ltd?
Rose Merc. Ltd revenue growth is -3.4% for FY-2025, which is below its 3-year CAGR of NA%, indicating slower growth.

Q.2 Gross Profit margin of Rose Merc. Ltd?
Rose Merc. Ltd Gross profit margin which is the profit after deduction of direct costs, is 7.2% for FY-2025, which is above its 3-year median of 5.5%, indicating increasing margins.

Q.3 Operating Profit Margin of Rose Merc. Ltd?
Rose Merc. Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is -3.97% for FY-2025, which is in line with its 3-year median of -3.97% indicating stable margins.

Q.4 Net Profit Margin of Rose Merc. Ltd?
Rose Merc. Ltd Net Profit Margin is 6.82% for FY-2025, is above its 3-year median of 6.4%, indicating increasing margins.
Current Level 3-year
Historic Median
Gross Profit Margin (%) 7.2 5.5
Operating Profit Margin (%) -3.97 -3.97
Net Profit Margin (%) 6.82 6.4

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Rose Merc. Ltd?
Rose Merc. Ltd Return on Asset is 0.5%, which is in line with its 3-year historical median of 0.5%, indicating stable asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Rose Merc. Ltd?
Rose Merc. Ltd Return on capital employed is 0.8% for FY-2025, which is in line with its 3-year historical median of 0.8%. 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 Rose Merc. Ltd?
Rose Merc. Ltd Return on equity is 0.91% for FY-2025, which is in line with its 3-year historical median of 0.91%, indicating the business is making similar use of its shareholders capital.

Q.8 Cash conversion cycle of Rose Merc. Ltd?
Rose Merc. Ltd Cash conversion cycle is 349 days, above its 3-year historical median of 255 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.
Current Level 3-year
Historic Median
Asset Turnover (x) 0.07 0.24
ROE (%) 0.91 0.91
ROCE (%) 0.8 0.8
Cash Conversion Cycle 349 days 255 days

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

Q.9 Debt to Equity ratio of Rose Merc. Ltd?
Rose Merc. Ltd Debt-to-Equity ratio is 0.04, which is above the industry average of 0.03, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Rose Merc. Ltd?
Rose Merc. Ltd Debt to cash flow from operations is 0.05, which is at a healthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Rose Merc. Ltd?

Q.1 Promoter shareholding and pledge status of Rose Merc. Ltd?
Promoters hold 0.12% of the Rose Merc. Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Rose Merc. Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Rose Merc. Ltd vs industry peers?
Rose Merc. Ltd revenue CAGR is 0.00%, compared to the industry median CAGR of 4.99%, indicating slower growth and losing its market share.
Profit Metrics
Current Level 3-year
Industry Median
Revenue Growth (%) -3.4 5
Gross Profit Growth (%) 31.3 17.6
Operating Profit Growth (%) 0 20.8
Net Profit Growth (%) 5.3 18.9
Operating Efficiency
Current Level 3-year
Industry Median
Asset Turnover (x) 0.07 0.66
ROE (%) 0.91 2.9
ROCE (%) 0.8 4.31
Cash Conversion Cycle (days) 348.9 49

Valuation & price assessment

Q.1 Stock return of Rose Merc. Ltd over the last decade?
Over the last 3 year(s), the stock has delivered a CAGR of 10.8% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
- - 10.8% 25.1%
Q.2 Valuation ratios of Rose Merc. Ltd vs historical?
The current P/E ratio of 95.3 is higher than its historical median of 58.35, indicating that the stock is trading above its historical average valuation.
Q.3 How do the current valuation ratios compare with 3-year historical median and industry numbers?
Valuation Ratios Current 3-year
Historic Median
3-year
Industry Median
Price to Earnings 95.3 58.35 35.02
Price to Book 1.21 1.91 1.68
Price to Sales 11.56 13.21 2.16
EV to EBITDA 68.06 55.09 15.51

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