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INVESTMENT INSIGHTS

Check Before You Invest : Eco Recycling Ltd

BSE: 530643 NSE: ISIN: INE316A01038
  |   Sector:  Miscellaneous   |   Industry:  Environmental Services

Snapshot

Q.1 Which industry/sub-sector does Eco Recycling Ltd belong to?
Eco Recycling Ltd belongs to the Miscellaneous sector, operating specifically within the Environmental Services segment.
Q.2 Is Eco Recycling Ltd a good quality company?
Eco Recycling 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 Eco Recycling Ltd undervalued or overvalued?
Eco Recycling 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 37.13 41.87
Price to Book 8.37 7.97
Price to Sales 18.32 19.53
EV to EBITDA 25.86 28.70
Q.4 Is Eco Recycling Ltd a good buy now?
Eco Recycling 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 Eco Recycling Ltd?
Eco Recycling Ltd revenue growth is 56.9% for FY-2025, which is above its 5-year CAGR of 29.24%, indicating faster growth.

Q.2 Gross Profit margin of Eco Recycling Ltd?
Eco Recycling Ltd Gross profit margin which is the profit after deduction of direct costs, is 74.9% for FY-2025, which is in line with its 5-year median of 72.8%, indicating stable margins.

Q.3 Operating Profit Margin of Eco Recycling Ltd?
Eco Recycling Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 70.48% for FY-2025, which is above its 5-year median of 22.97% indicating increasing margins.

Q.4 Net Profit Margin of Eco Recycling Ltd?
Eco Recycling Ltd Net Profit Margin is 53.09% for FY-2025, is in line with its 5-year median of 53.09%, indicating stable margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 74.9 72.8
Operating Profit Margin (%) 70.48 22.97
Net Profit Margin (%) 53.09 53.09

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Eco Recycling Ltd?
Eco Recycling Ltd Return on Asset is 25.17%, which is above its 5-year historical median of 22.34%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Eco Recycling Ltd?
Eco Recycling Ltd Return on capital employed is 46.1% for FY-2025, which is above its 5-year historical median of 30.91%. 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 Eco Recycling Ltd?
Eco Recycling Ltd Return on equity is 33.03% for FY-2025, which is in line with its 5-year historical median of 32.09%, indicating the business is making similar use of its shareholders capital.

Q.8 Cash conversion cycle of Eco Recycling Ltd?
Eco Recycling Ltd Cash conversion cycle is 111 days, above its 5-year historical median of 75 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) 0.47 0.28
ROE (%) 33.03 32.09
ROCE (%) 46.1 30.91
Cash Conversion Cycle 111 days 75 days

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

Q.9 Debt to Equity ratio of Eco Recycling Ltd?
Eco Recycling Ltd Debt-to-Equity ratio is 0.00, which is lower the industry average of 0.26, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Eco Recycling Ltd?
Eco Recycling Ltd Debt to cash flow from operations is 0, which is at a healthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Eco Recycling Ltd?

Q.1 Promoter shareholding and pledge status of Eco Recycling Ltd?
Promoters hold 73.35% of the Eco Recycling Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Eco Recycling Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Eco Recycling Ltd vs industry peers?
Eco Recycling Ltd revenue CAGR is 29.24%, compared to the industry median CAGR of 4.01%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 56.9 4
Gross Profit Growth (%) 65 27
Operating Profit Growth (%) 93.8 13.1
Net Profit Growth (%) 43.8 28.6
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.47 0.84
ROE (%) 33.03 13.91
ROCE (%) 46.1 13.74
Cash Conversion Cycle (days) 111.19 71

Valuation & price assessment

Q.1 Stock return of Eco Recycling Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 27.2% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR		 27.2% 50.5% 52.5% -32.8%
Q.2 Valuation ratios of Eco Recycling Ltd vs historical?
The current P/E ratio of 37.13 is lower than its historical median of 41.87, 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 37.13 41.87 31.72
Price to Book 8.37 7.97 4.85
Price to Sales 18.32 19.53 2.84
EV to EBITDA 25.86 28.70 17.87

Check more companies

1. VA Tech Wabag
2. ION Exchage
3. Antony WasteHandling
4. Eco Recycling
5. Concord Enviro Sys.
6. Namo Ewaste Mgmt.
7. Felix Industries
8. Apex Ecotech
9. Race Eco Chain
10. Urban Env Waste Mgt.

Check trending companies

1. Petronet LNG Ltd.
2. Syngene International Ltd.
3. Welspun Corp Ltd.
4. Nestle India Ltd.
5. Hitachi Energy India Ltd.
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