Check Before You Invest : Royal Arc Electrodes Ltd

Q: Which industry/sub-sector does Royal Arc Electrodes Ltd belong to?

Royal Arc Electrodes Ltd belongs to the Capital Goods & Industrial Consumables sector, operating specifically within the Electrodes & Welding Equipment segment.

Q: Is Royal Arc Electrodes Ltd a good quality company?

Royal Arc Electrodes 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: Is Royal Arc Electrodes Ltd undervalued or overvalued?

Royal Arc Electrodes 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. Price to Earnings, Current: 20.34, Historic Median: 19.11. Price to Book, Current: 2.55, Historic Median: 2.53. Price to Sales, Current: 1.8, Historic Median: 1.72. EV to EBITDA, Current: 10.49, Historic Median: 10.21

Q: Is Royal Arc Electrodes Ltd a good buy now?

Royal Arc Electrodes 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

Q: Revenue growth of Royal Arc Electrodes Ltd?

Royal Arc Electrodes Ltd revenue growth is 1.7% for FY-2025, which is below its 5-year CAGR of 9.54%, indicating slower growth.

Q: Gross Profit margin of Royal Arc Electrodes Ltd?

Royal Arc Electrodes Ltd Gross profit margin which is the profit after deduction of direct costs, is 15.2% for FY-2025, which is in line with its 5-year median of 15.2%, indicating stable margins.

Q: Operating Profit Margin of Royal Arc Electrodes Ltd?

Royal Arc Electrodes Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 14.83% for FY-2025, which is in line with its 5-year median of 14.83% indicating stable margins.

Q: Net Profit Margin of Royal Arc Electrodes Ltd?

Royal Arc Electrodes Ltd Net Profit Margin is 8.85% for FY-2025, is in line with its 5-year median of 8.85%, indicating stable margins. Profitability Metrics. Gross Profit Margin (%), Current: 15.2, Historic Median: 15.2. Operating Profit Margin (%), Current: 14.83, Historic Median: 14.83. Net Profit Margin (%), Current: 8.85, Historic Median: 8.85

Q: Return on Asset of Royal Arc Electrodes Ltd?

Royal Arc Electrodes Ltd Return on Asset is 13.53%, which is in line with its 5-year historical median of 13.53%, indicating stable asset utilization efficiency.

Q: Return on capital employed (ROCE) of Royal Arc Electrodes Ltd?

Royal Arc Electrodes Ltd Return on capital employed is 21.29% for FY-2025, which is below its 5-year historical median of 26.46%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 14%, indicating value creation.

Check Before You Invest : Royal Arc Electrodes Ltd

Snapshot

Q.1 Which industry/sub-sector does Royal Arc Electrodes Ltd belong to?

Royal Arc Electrodes Ltd belongs to the Capital Goods & Industrial Consumables sector, operating specifically within the Electrodes & Welding Equipment segment.

Q.2 Is Royal Arc Electrodes Ltd a good quality company?

Royal Arc Electrodes 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 Royal Arc Electrodes Ltd undervalued or overvalued?

Royal Arc Electrodes 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	20.34	19.11
Price to Book	2.55	2.53
Price to Sales	1.8	1.72
EV to EBITDA	10.49	10.21

Q.4 Is Royal Arc Electrodes Ltd a good buy now?

Royal Arc Electrodes 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 Royal Arc Electrodes Ltd?

Royal Arc Electrodes Ltd revenue growth is 1.7% for FY-2025, which is below its 5-year CAGR of 9.54%, indicating slower growth.

Q.2 Gross Profit margin of Royal Arc Electrodes Ltd?

Royal Arc Electrodes Ltd Gross profit margin which is the profit after deduction of direct costs, is 15.2% for FY-2025, which is in line with its 5-year median of 15.2%, indicating stable margins.

Q.3 Operating Profit Margin of Royal Arc Electrodes Ltd?

Royal Arc Electrodes Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 14.83% for FY-2025, which is in line with its 5-year median of 14.83% indicating stable margins.

Q.4 Net Profit Margin of Royal Arc Electrodes Ltd?

Royal Arc Electrodes Ltd Net Profit Margin is 8.85% for FY-2025, is in line with its 5-year median of 8.85%, indicating stable margins.

	Current Level	5-year Historic Median
Gross Profit Margin (%)	15.2	15.2
Operating Profit Margin (%)	14.83	14.83
Net Profit Margin (%)	8.85	8.85

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Royal Arc Electrodes Ltd?

Royal Arc Electrodes Ltd Return on Asset is 13.53%, which is in line with its 5-year historical median of 13.53%, indicating stable asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Royal Arc Electrodes Ltd?

Royal Arc Electrodes Ltd Return on capital employed is 21.29% for FY-2025, which is below its 5-year historical median of 26.46%. 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 Royal Arc Electrodes Ltd?

Royal Arc Electrodes Ltd Return on equity is 15.79% for FY-2025, which is below its 5-year historical median of 20.42%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of Royal Arc Electrodes Ltd?

Royal Arc Electrodes Ltd Cash conversion cycle is 96 days, above its 5-year historical median of 70 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)	1.53	2.08
ROE (%)	15.79	20.42
ROCE (%)	21.29	26.46
Cash Conversion Cycle	96 days	70 days

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

Q.9 Debt to Equity ratio of Royal Arc Electrodes Ltd?

Royal Arc Electrodes Ltd Debt-to-Equity ratio is 0.01, which is lower the industry average of 0.09, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Royal Arc Electrodes Ltd?

Royal Arc Electrodes Ltd Debt to cash flow from operations is 0.2, which is at a healthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Royal Arc Electrodes Ltd?

Q.1 Promoter shareholding and pledge status of Royal Arc Electrodes Ltd?

Promoters hold 72.96% of the Royal Arc Electrodes Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Royal Arc Electrodes Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Royal Arc Electrodes Ltd vs industry peers?

Royal Arc Electrodes Ltd revenue CAGR is 9.54%, compared to the industry median CAGR of 7.29%, indicating faster growth and gaining its market share.

Profit Metrics

	Current Level	5-year Industry Median
Revenue Growth (%)	1.7	7.3
Gross Profit Growth (%)	-16.7	24
Operating Profit Growth (%)	-11.8	21
Net Profit Growth (%)	-25	19.8

Operating Efficiency

	Current Level	5-year Industry Median
Asset Turnover (x)	1.53	1.1
ROE (%)	15.79	11.33
ROCE (%)	21.29	14.01
Cash Conversion Cycle (days)	95.85	90

Valuation & price assessment

Q.1 Stock return of Royal Arc Electrodes Ltd over the last decade?

Over the last 1 year(s), the stock has delivered a CAGR of 8.48% based on the current price.

	9Y	5Y	3Y	1Y
Share Price CAGR	-	-	-	8.5%

Q.2 Valuation ratios of Royal Arc Electrodes Ltd vs historical?

The current P/E ratio of 20.34 is higher than its historical median of 19.11, 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	20.34	19.11	19.09
Price to Book	2.55	2.53	1.95
Price to Sales	1.8	1.72	1.73
EV to EBITDA	10.49	10.21	10.27

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10. Royal Arc Electrodes

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Check Before You Invest : Royal Arc Electrodes Ltd

Snapshot

Performance Analysis

Ownership & governance

Peer comparison (industry-wise, mcap)

Profit Metrics

Operating Efficiency

Valuation & price assessment

Check more companies

Check trending companies

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