🔎 At a Glance
Rolex Rings is one of India’s top 5 forging players, supplying machined bearing rings and auto components to global giants. But behind the forged glory lies a stock that’s down 38% in one year, a promoter steadily walking out, and a business with slowing growth and “0% dividend since inception” swag.
1. 🪓 WTF Do They Even Do?
- Rolex Rings makes forged and machined components—basically the tough metal bits in vehicles, industrial machines, wind turbines, railways etc.
- Core products:
- Bearing rings
- Transmission components
- Automotive gear parts
- Big global + domestic customer base across 40+ countries, making it a rare “auto ancillary export” play.
- Capacity: ~144,750 MT/annum for forgings, 69 million bearing rings/annum, and 30 Mn parts in machining capacity.
2. 📊 Financials – Profit, Margins, ROE, Growth
| Metric | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Revenue (₹ Cr) | 616 | 1,017 | 1,179 | 1,222 | 1,155 |
| EBITDA Margin (%) | 18% | 23% | 22% | 21% | 21% |
| Net Profit (₹ Cr) | 87 | 132 | 198 | 156 | 174 |
| ROE (%) | 15% | 19% | 26% | 23% | 19% |
| ROCE (%) | 15% | 31% | 32% | 28% | 23% |
🧾 TL;DR:
- Margins are elite, but topline is stagnating
- FY25 PAT was decent (₹174 Cr), but not enough to justify the hype cycle of ₹2,700+ stock price in 2022.
3. 💸 Valuation – Cheap, Meh, or Crack?
- CMP: ₹1,568
- PE: 22.6x
- EV/EBITDA: ~13.5x (based on ₹241 Cr EBITDA)
- Book Value: ₹394 → P/BV = 4x
🎯 Fair Value Range (FY26E):
- Base Case: ₹180 Cr PAT × 22x PE = ₹3,960 Cr = ₹1,450/share
- Bull Case: ₹200 Cr PAT × 25x PE = ₹5,000 Cr = ₹1,835/share
- FV Range: ₹1,450–₹1,835
➡️ At ₹1,568, the stock is already near base-case FV, which means upside depends on growth revival or re-rating.
4. 🍿 What’s Cooking – News, Triggers, Drama
- ❌ No dividend yet, even after being consistently profitable.
- ✅ Debt almost wiped out: ₹615 Cr (2016) → ₹14 Cr (2025).
- 📉 Promoter holding falling: 57.6% (2022) → 53.35% (2025).
- ⚠️ Qualified audit opinion in FY25 due to ₹227 Cr demand by bank; ₹50 Cr provision already made.
🗞️ Q4 FY25 concall:
- 9% QoQ growth
- EBITDA margin: 23%
- Bearing segment sluggish; auto components growing
- Export-led orders continue
5. 🧾 Balance Sheet – How Much Debt, How Many Dreams?
| Year | Total Borrowings | Net Worth (Equity + Reserves) |
|---|---|---|
| FY20 | ₹259 Cr | ₹268 Cr |
| FY25 | ₹14 Cr | ₹1,072 Cr |
💪 Zero-debt territory. They cleaned it up post-IPO.
But hold up…
👀 They’ve added ₹261 Cr investments in FY25—what are they cooking?
6. 💰 Cash Flow – Sab Number Game Hai
| Metric | FY25 |
|---|---|
| Cash from Ops | ₹227 Cr |
| Capex (Investing) | ₹-191 Cr |
| Financing Cash Flow | ₹-6 Cr |
| Net Cash Flow | ₹+30 Cr |
🔁 Operating cash flow is solid, but capex is back—potential growth capex?
7. 📊 Ratios – Sexy or Stressy?
| Ratio | FY25 |
|---|---|
| ROE | 19.2% |
| ROCE | 22.8% |
| OPM | 21% |
| Cash Conv. Cycle | 157 days |
| Inventory Days | 152 |
🧠 Takeaway: Operationally robust. But inventory + debtor days still high—working capital remains a drag.
8. 📈 P&L Breakdown – Show Me the Money
- FY25 Revenue: ₹1,155 Cr
- EBITDA: ₹241 Cr
- PAT: ₹174 Cr
- EPS: ₹63.9
- Dividend: Still 0% 💀
Even with solid profits, they keep the cash. Saving for a rainy day? Or stingy as a steel bolt?
9. 🥊 Peer Comparison – Who Else in the Game?
| Company | PE | ROE | OPM | Sales (₹ Cr) | MCap (₹ Cr) |
|---|---|---|---|---|---|
| Rolex Rings | 22.6x | 19.2% | 21% | 1,155 | ₹4,277 Cr |
| Endurance | 47.3x | 15.5% | 13% | 11,560 | ₹39,114 Cr |
| Bharat Forge | 61.6x | 12.3% | 18% | 15,123 | ₹62,030 Cr |
| Schaeffler | 61.8x | 19.2% | 18% | 8,337 | ₹62,755 Cr |
🎯 Rolex Rings is cheaper on PE, but others have scale and global clout.
10. 🧠 Misc – Promoters, Investors, Drama
- 🧔 Promoters: Shah family (via Rivendell PE)
- 💔 Promoter stake has dropped from 57.6% to 53.3%
- 🏦 FII holding: Up from 1.7% → 7.3% (they like it)
- 🧑🤝🧑 Public holding steady at 7%
👀 Retail investor count increasing = retail absorption happening while promoters offload?
11. 🧠 EduInvesting Verdict™
“Steel is strong, but demand is weak. Margins are shiny, but growth is bleak.”
Rolex Rings has cleaned up its books, boasts elite margins, and operates in a critical B2B niche. But…
- Sales growth = mid-life crisis.
- Promoter exit = slow ghosting.
- No dividend = investor friendzoning.
At ₹1,568, you’re not getting it cheap, but you’re not paying IPO bubble price either.
⛳ Watchlist material? Sure.
🚀 Multibagger? Needs volume + growth trigger.
✍️ Written by Prashant | 📅 4 July 2025
Tags: Rolex Rings, Forging Industry, Auto Components, Midcap Stocks, Export Manufacturing, No Dividend Stocks, PE-backed IPOs, EduInvesting
