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Check Before You Invest : Websol Energy System Ltd

BSE: 517498 NSE: WEBELSOLAR ISIN: INE855C01023
  |   Sector:  Capital Goods & Industrial Consumables   |   Industry:  Electronics - Components

Snapshot

Q.1 Which industry/sub-sector does Websol Energy System Ltd belong to?
Websol Energy System Ltd belongs to the Capital Goods & Industrial Consumables sector, operating specifically within the Electronics - Components segment.
Q.2 Is Websol Energy System Ltd a good quality company?
Websol Energy System 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 Websol Energy System Ltd undervalued or overvalued?
Websol Energy System Ltd appears Somewhat 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 16.44 -
Price to Book 7.9 3.44
Price to Sales 4.75 5.67
EV to EBITDA 11.4 9.94
Q.4 Is Websol Energy System Ltd a good buy now?
Websol Energy 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.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Websol Energy System Ltd?
Websol Energy System Ltd revenue growth is 2,125.3% for FY-2025, which is below its 5-year CAGR of 24.1%, indicating slower growth.

Q.2 Gross Profit margin of Websol Energy System Ltd?
Websol Energy System Ltd Gross profit margin which is the profit after deduction of direct costs, is 40.9% for FY-2025, which is above its 5-year median of 13.1%, indicating increasing margins.

Q.3 Operating Profit Margin of Websol Energy System Ltd?
Websol Energy System Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 44.05% for FY-2025, which is above its 5-year median of 12.4% indicating increasing margins.

Q.4 Net Profit Margin of Websol Energy System Ltd?
Websol Energy System Ltd Net Profit Margin is 26.89% for FY-2025, is above its 5-year median of 4.54%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 40.9 13.1
Operating Profit Margin (%) 44.05 12.4
Net Profit Margin (%) 26.89 4.54

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Websol Energy System Ltd?
Websol Energy System Ltd Return on Asset is 36.33%, which is above its 5-year historical median of 3.39%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Websol Energy System Ltd?
Websol Energy System Ltd Return on capital employed is 59.38% for FY-2025, which is above its 5-year historical median of 7.75%. 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 Websol Energy System Ltd?
Websol Energy System Ltd Return on equity is 83.7% for FY-2025, which is above its 5-year historical median of 5.29%, indicating the business is making better use of its shareholders capital.

Q.8 Cash conversion cycle of Websol Energy System Ltd?
Websol Energy System Ltd Cash conversion cycle is -24 days, below its 5-year historical median of 17 days, indicating improved working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 1.35 0.52
ROE (%) 83.7 5.29
ROCE (%) 59.38 7.75
Cash Conversion Cycle -24 days 17 days

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

Q.9 Debt to Equity ratio of Websol Energy System Ltd?
Websol Energy System Ltd Debt-to-Equity ratio is 0.58, which is above the industry average of 0.25, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Websol Energy System Ltd?
Websol Energy System Ltd Debt to cash flow from operations is 0.91, which is at a healthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Websol Energy System Ltd?

Q.1 Promoter shareholding and pledge status of Websol Energy System Ltd?
Promoters hold 29.72% of the Websol Energy System Ltd, with 89.39% of their stake pledged, indicating high pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Websol Energy System Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Websol Energy System Ltd vs industry peers?
Websol Energy System Ltd revenue CAGR is 24.10%, compared to the industry median CAGR of 3.03%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 2 3
Gross Profit Growth (%) 0 16
Operating Profit Growth (%) 0 19.2
Net Profit Growth (%) 0 16.2
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 1.35 0.79
ROE (%) 83.7 7.33
ROCE (%) 59.38 9.29
Cash Conversion Cycle (days) -24.03 121

Valuation & price assessment

Q.1 Stock return of Websol Energy System Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 37.1% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
37.1% 94.1% 131.7% -6.5%
Q.2 Valuation ratios of Websol Energy System Ltd vs historical?
The current P/E ratio of 16.44 is higher than its historical median of , 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 16.44 - 37.32
Price to Book 7.9 3.44 3.80
Price to Sales 4.75 5.67 4.16
EV to EBITDA 11.4 9.94 22.30

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