MoneyWorks4Me

Check Before You Invest : RM Drip and Sprinklers System Ltd

BSE: 544456 NSE: RMDRIP ISIN: INE219Y01026
  |   Sector:  Capital Goods & Industrial Consumables   |   Industry:  Engineering - Industrial Equipments

Snapshot

Q.1 Which industry/sub-sector does RM Drip and Sprinklers System Ltd belong to?
RM Drip and Sprinklers System Ltd belongs to the Capital Goods & Industrial Consumables sector, operating specifically within the Engineering - Industrial Equipments segment.
Q.2 Is RM Drip and Sprinklers System Ltd a good quality company?
RM Drip and Sprinklers System 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 RM Drip and Sprinklers System Ltd undervalued or overvalued?
RM Drip and Sprinklers System 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 0-year
Historic Median
Price to Earnings 28.84 11.91
Price to Book 7.55 1.25
Price to Sales 4.89 0.99
EV to EBITDA 19.5 5.91
Q.4 Is RM Drip and Sprinklers System Ltd a good buy now?
RM Drip and Sprinklers System 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.

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

Q.1 Debt to Equity ratio of RM Drip and Sprinklers System Ltd?
RM Drip and Sprinklers System Ltd Debt-to-Equity ratio is 0.33, which is above the industry average of , indicating higher debt levels in the industry.

Q.2 Debt to cash flow from operations of RM Drip and Sprinklers System Ltd?
RM Drip and Sprinklers System Ltd Debt to cash flow from operations is -0.97, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of RM Drip and Sprinklers System Ltd?

Q.1 Promoter shareholding and pledge status of RM Drip and Sprinklers System Ltd?
Promoters hold 21.06% of the RM Drip and Sprinklers System Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does RM Drip and Sprinklers System Ltd performance compare with that of its Peers?

Q.1 Revenue growth of RM Drip and Sprinklers System Ltd vs industry peers?
RM Drip and Sprinklers System Ltd revenue CAGR is %, compared to the industry median CAGR of 0%, indicating stable growth and maintaining its market share.
Profit Metrics
Current Level 0-year
Industry Median
Revenue Growth (%) - -
Gross Profit Growth (%) 337.5 9
Operating Profit Growth (%) 620 8.5
Net Profit Growth (%) 380 3
Operating Efficiency
Current Level 0-year
Industry Median
Asset Turnover (x) 1.16 0.93
ROE (%) - 5.96
ROCE (%) - 6.56
Cash Conversion Cycle (days) 201.08 47

Valuation & price assessment

Q.1 Stock return of RM Drip and Sprinklers System Ltd over the last decade?
Over the last 5 year(s), the stock has delivered a CAGR of 5.46% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
- 5.5% -21% -46.1%
Q.2 Valuation ratios of RM Drip and Sprinklers System Ltd vs historical?
The current P/E ratio of 28.84 is higher than its historical median of 11.91, indicating that the stock is trading above its historical average valuation.
Q.3 How do the current valuation ratios compare with 0-year historical median and industry numbers?
Valuation Ratios Current 0-year
Historic Median
0-year
Industry Median
Price to Earnings 28.84 11.91 -
Price to Book 7.55 1.25 -
Price to Sales 4.89 0.99 -
EV to EBITDA 19.5 5.91 -

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