1. At a Glance – The Elevator Pitch (With a Roast Button)
Revathi Equipment India Ltd (REIL) sits at a ₹201 Cr market cap, trading around ₹655, down a brutal ~62% YoY, which already tells you the market mood: “Nice machines, but bhai cash flow ka kya?”
Sales for FY25 stood at ₹179 Cr (down from ₹212 Cr in FY24), PAT ₹8.93 Cr, OPM 9.53%, ROCE a spicy 25.7%, ROE 17.4%, and Debt ₹53 Cr with D/E 0.42. On valuation, the stock sits at P/E ~22.5, EV/EBITDA ~8.7, P/B ~1.59—not expensive on paper, but the paper is slightly wet.
Latest Q3 FY26 (Dec 2025) delivered ₹32.23 Cr revenue and -₹1.40 Cr PAT. OPM collapsed to 0.12%. Translation: the rigs drilled holes, but profits fell into one.
Curious why a company with 1,000+ rigs sold worldwide and Coal India as a client still trips quarterly? Read on—this one’s a detective story with spare parts.
2. Introduction – The Plot Thickens (And Then Needs Grease)
Born out of a 2023 NCLT demerger, REIL is the drilling-focused offspring of the old Revathi Equipment Ltd (now Semac Consultants Ltd). The idea was simple: pure-play drilling equals better valuation. The market replied: “Show me stable margins first.”
REIL designs blast hole, water well, exploratory and specialty rigs—serious capital goods for mining and infrastructure. But here’s the twist: REIL assembles more than it manufactures. Motors, jacks, critical components—outsourced or imported. This turns margins into a hostage of vendors, freight rates, geopolitics, and the occasional global conflict.
Add to that 62.5% domestic revenue dependence on Coal India Ltd (CIL), falling exports (₹76.7 Cr → ₹68 Cr in FY25), and capacity utilisation of just 28% in FY25
, and you start seeing why quarterly numbers wobble like a rig on soft soil.
So is this a cyclical hiccup, a working-capital chess match, or a structural issue dressed in mining overalls? Let’s drill deeper.
3. Business Model – WTF Do They Even Do? (Explained to a Lazy Investor)
REIL designs heavy-duty drilling rigs used to punch the earth for mining, water, and exploration. Think of them as the “first punch” in mining operations.
What they sell:
- Blast Hole Drills – Big boys for coal, limestone, iron ore.
- Jackless Drills – Mobile rigs for roads, dams, uneven terrain.
- Water Well Drills – Borewells for agriculture and communities.
- Hydro-Fracturing Units – Niche, high-tech, exploration-focused.
- Exploratory Drills – Sampling and geological surveys.
- Spares & Services – The underrated cash cow.
The sneaky shift:
FY25 revenue mix changed dramatically:
- Drills/Machines: 48.5% (FY24: 69%)
- Spares: 47% (FY24: 26.7%)
- Services: 4%
This is not random. When new rig demand slows, spares keep the lights on. Good strategy—but spares alone can’t scale like machines.
Assembly capacity is 60 machines/year, but FY25 utilisation was just 28%. That’s like owning a gym and using only the treadmill.
4. Financials Overview – Numbers
