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Check Before You Invest : Lakshmi Electrical Control Systems Ltd

BSE: 504258 NSE: LAKSELECON ISIN: INE284C01018
  |   Sector:  Capital Goods & Industrial Consumables   |   Industry:  Electric Equipment

Snapshot

Q.1 Which industry/sub-sector does Lakshmi Electrical Control Systems Ltd belong to?
Lakshmi Electrical Control Systems Ltd belongs to the Capital Goods & Industrial Consumables sector, operating specifically within the Electric Equipment segment.
Q.2 Is Lakshmi Electrical Control Systems Ltd a good quality company?
Lakshmi Electrical Control Systems Ltd is a weak quality company, based on a inconsistent 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 Lakshmi Electrical Control Systems Ltd undervalued or overvalued?
Lakshmi Electrical Control Systems 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 73.33 20.49
Price to Book 0.73 0.86
Price to Sales 0.87 0.87
EV to EBITDA 25.37 12.65
Q.4 Is Lakshmi Electrical Control Systems Ltd a good buy now?
Lakshmi Electrical Control Systems 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 Lakshmi Electrical Control Systems Ltd?
Lakshmi Electrical Control Systems Ltd revenue growth is -37.2% for FY-2025, which is below its 5-year CAGR of 13.4%, indicating slower growth.

Q.2 Gross Profit margin of Lakshmi Electrical Control Systems Ltd?
Lakshmi Electrical Control Systems Ltd Gross profit margin which is the profit after deduction of direct costs, is 4.6% for FY-2025, which is below its 5-year median of 6.6%, indicating decreasing margins.

Q.3 Operating Profit Margin of Lakshmi Electrical Control Systems Ltd?
Lakshmi Electrical Control Systems Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 2.28% for FY-2025, which is below its 5-year median of 4.7% indicating decreasing margins.

Q.4 Net Profit Margin of Lakshmi Electrical Control Systems Ltd?
Lakshmi Electrical Control Systems Ltd Net Profit Margin is 1.64% for FY-2025, is below its 5-year median of 4.13%, indicating decreasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 4.6 6.6
Operating Profit Margin (%) 2.28 4.7
Net Profit Margin (%) 1.64 4.13

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Lakshmi Electrical Control Systems Ltd?
Lakshmi Electrical Control Systems Ltd Return on Asset is 1.01%, which is below its 5-year historical median of 4.31%, indicating deteriorated asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Lakshmi Electrical Control Systems Ltd?
Lakshmi Electrical Control Systems Ltd Return on capital employed is 2.15% for FY-2025, which is below its 5-year historical median of 7.37%. 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 Lakshmi Electrical Control Systems Ltd?
Lakshmi Electrical Control Systems Ltd Return on equity is 1.23% for FY-2025, which is below its 5-year historical median of 5.44%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of Lakshmi Electrical Control Systems Ltd?
Lakshmi Electrical Control Systems Ltd Cash conversion cycle is 104 days, above its 5-year historical median of 68 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) 0.62 1.02
ROE (%) 1.23 5.44
ROCE (%) 2.15 7.37
Cash Conversion Cycle 104 days 68 days

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

Q.9 Debt to Equity ratio of Lakshmi Electrical Control Systems Ltd?
Lakshmi Electrical Control Systems Ltd Debt-to-Equity ratio is 0.04, which is lower the industry average of 0.29, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Lakshmi Electrical Control Systems Ltd?
Lakshmi Electrical Control Systems 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 Lakshmi Electrical Control Systems Ltd?

Q.1 Promoter shareholding and pledge status of Lakshmi Electrical Control Systems Ltd?
Promoters hold 36.13% of the Lakshmi Electrical Control Systems Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Lakshmi Electrical Control Systems Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Lakshmi Electrical Control Systems Ltd vs industry peers?
Lakshmi Electrical Control Systems Ltd revenue CAGR is 13.40%, compared to the industry median CAGR of 13.19%, indicating stable growth and maintaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) -37.2 13.2
Gross Profit Growth (%) -54.6 27.9
Operating Profit Growth (%) -68.8 28.4
Net Profit Growth (%) -78.6 28.5
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.62 1.05
ROE (%) 1.23 9.8
ROCE (%) 2.15 13.56
Cash Conversion Cycle (days) 103.9 99

Valuation & price assessment

Q.1 Stock return of Lakshmi Electrical Control Systems Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 7.9% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
7.9% 21.3% -10.9% -17.8%
Q.2 Valuation ratios of Lakshmi Electrical Control Systems Ltd vs historical?
The current P/E ratio of 73.33 is higher than its historical median of 20.49, 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 73.33 20.49 38.08
Price to Book 0.73 0.86 3.97
Price to Sales 0.87 0.87 2.75
EV to EBITDA 25.37 12.65 18.75

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