1. At a Glance
If micro-irrigation had a Bollywood montage, R M Drip & Sprinklers Systems Ltd would be the guy who trained silently for years and suddenly walked into the ring jacked.
Market cap: ₹2,607 Cr.
Stock price: ₹104.
Return in 1 year: 161%.
Q3 FY26 sales: ₹74.6 Cr.
Q3 FY26 PAT: ₹14.1 Cr.
Operating margin: a juicy ~30%.
And yet… promoter holding is 21%, debtor days are 300, and the stock trades at 73.9× earnings.
So what is this? A structural agri-infra compounder? Or a drip-irrigation Lamborghini priced like a Ferrari but running on farm diesel?
Grab your chai. This one’s spicy.
2. Introduction – From Muddy Fields to Dalal Street Stardom
Founded in 1996, R M Drip & Sprinklers Systems Ltd spent decades doing what Indian SMEs do best — surviving quietly.
No fancy investor decks. No CNBC debates. Just pipes, drippers, sprinklers, and farmers.
Then something snapped post-FY23.
Sales exploded. Margins ballooned. Profits went vertical.
From ₹11 Cr revenue in FY23 to ₹184 Cr TTM.
From loss-making years to ₹35 Cr PAT.
Naturally, the market lost its mind.
But markets don’t give 70× P/E valuations for history. They pay for belief.
The question is: belief in what exactly?
3. Business Model – WTF Do They Even Do?
In simple words:
They help water reach crops without wasting it.
What RM Drip actually does:
- Designs and manufactures micro-irrigation systems
- Supplies drip lines, sprinklers, filters, fertigation equipment
- Acts as OEM
- supplier to other irrigation brands
- Assists in system design + installation for farmers
Dealer footprint spans:
- Maharashtra
- Gujarat
- MP
- Karnataka
- UP, Bihar, Jharkhand
- Strategic association with Greaves Cotton
This is classic “pipes + plastic + agri subsidy” business.
Low glamour. High demand. Brutally execution-driven.
The twist?
They’ve suddenly learned how to price power + scale margins.
4. Financials Overview – The Quarter That Made Everyone Blink
Quarterly Comparison Table (₹ Cr)
| Metric | Latest Qtr (Q3 FY26) | YoY Qtr | Prev Qtr | YoY % | QoQ % |
|---|---|---|---|---|---|
| Revenue | 74.6 | 48.0 | 31.0 | 55.6% | 140% |
| EBITDA | 23.0 | 15.0 | 8.0 | 53.3% | 187% |
| PAT | 14.1 | 10.3 | 6.0 | 37.3% | 135% |
| EPS (₹) | 0.56 | 0.41 | 0.23 | 36.6% | 143% |
Annualised EPS (Q1–Q3 avg × 4): ~₹1.33–1.40
CMP ₹104 → P/E ~74×
Commentary:
This is not linear growth. This is operational leverage on steroids.
But remember — one great year does not make a dynasty.
Would you trust this growth to repeat every monsoon?
5. Valuation Discussion – Numbers Don’t Lie, They Just Laugh
Method 1: P/E Band
- Normal plastic/irrigation peers: 20–30×
- RM Drip current: 74×
Implied fair band: ₹40–65
Method 2: EV/EBITDA
- EBITDA TTM ~₹55 Cr
- EV ₹2,642 Cr
- EV/EBITDA = 46.6×
Peers sit at 12–20×
