🧠 At a Glance
RMC Switchgears is a smallcap switchgear + EPC solutions player that went from being a sleepy ₹42 Cr revenue company in FY22 to a ₹316 Cr powerhouse in FY25. With 149% profit CAGR, 38% ROE, and growing traction in energy infra projects, the stock quietly ran up 4x in 3 years. But is the growth sustainable—or just “current” hype?
1️⃣ Introduction with Hook
Imagine a ₹826 Cr company that makes smart energy meter boxes, distribution panels, and EPC solutions for the power sector.
Sounds boring?
Sure. Until you realize:
- 🔌 It’s grown sales 7.5x in 3 years
- 📈 Profits have compounded at 149% CAGR over 5 years
- 💸 ROE is at 38%, making many largecaps blush
- 🧃 And yet, it trades under-the-radar on BSE SME
Welcome to RMC Switchgears Ltd—the engineering midcap that’s acting like a PSU but growing like a startup.
2️⃣ WTF Do They Even Do? (Business Model)
RMC Switchgears isn’t making your regular fan switches. This is heavy-duty, industrial-grade switchgear stuff, mostly used in:
- 🏗️ Power distribution infra (smart meter boxes, panels, FRP enclosures)
- 🔧 EPC contracts for power utilities
- 🧪 Design + Manufacturing of energy safety products
- 🌱 And now: a green energy subsidiary for solar EPC & smart metering
Clients include state discoms and power utilities—so yes, your bijli bill’s last-mile box might just be RMC’s handiwork.
3️⃣ Financials – Growth, Profit & Margin Juice
📊 Sales & Profit (₹ Cr)
| Year | Revenue | Net Profit | ROE | OPM |
|---|---|---|---|---|
| FY22 | ₹42 Cr | ₹1 Cr | 5% | 13% |
| FY23 | ₹125 Cr | ₹12 Cr | 30% | 21% |
| FY24 | ₹172 Cr | ₹15 Cr | 32% | 20% |
| FY25 | ₹316 Cr | ₹31 Cr | 38% | 17% |
- 3-Year Revenue CAGR: 97%
- 5-Year Net Profit CAGR: 149%
- Margins holding above 15%, even with infra scale-up
So yes, sab number game hai—and the scoreboard looks 🔥.
4️⃣ Valuation – Cheap, Meh or Crack?
- CMP: ₹785
- P/E: 26x
- P/B: 7.73x
- EV/EBITDA: Not disclosed but likely 17-20x
✅ Peer P/E Check:
| Company | P/E | ROE | Sales (₹ Cr) |
|---|---|---|---|
| Genus Power | 39x | 17% | 2,442 |
| Shilchar Tech | 42x | 53% | 623 |
| Waaree Renewab. | 44x | 65% | 1,597 |
| RMC Switch | 26x | 38% | 316 |
📉 Valuation Verdict: Not cheap, but relative to peers and growth, still reasonable. Definitely not “crack”—yet.
5️⃣ What’s Cooking – News, Triggers, Drama
Here’s the masala in the circuit:
- ✅ FY25 results blew past expectations (sales +84%, PAT +92%)
- 🔋 Appointed new Business Head for RMC Green Energy
- 💼 Announced ESOP Scheme 2024 — 3,000 options granted recently
- 🧾 Switched credit rating agencies (dumped BWR, onboarded Infomerics)
- 🛠️ Now expanding solar EPC via subsidiary — Green push incoming?
No viral press releases, just steady execution.
6️⃣ Balance Sheet – How Much Debt, How Many Dreams?
- 🏦 Borrowings: ₹59 Cr (as of FY25)
- 🧮 Net Worth: ₹107 Cr
- 💀 Debt-to-Equity: ~0.55 (manageable)
Not debt-free, but under control. And definitely not funding growth with junk loans.
7️⃣ Cash Flow – Sab Number Game Hai
| Year | CFO (₹ Cr) | Capex (₹ Cr) | FCF (Est) |
|---|---|---|---|
| FY23 | ₹8 Cr | ₹1 Cr | ₹7 Cr |
| FY24 | ₹15 Cr | ₹1 Cr | ₹14 Cr |
| FY25 | ₹15 Cr | ₹23 Cr | -₹8 Cr |
🧯 Capex spike in FY25 likely for EPC expansion or infra. But historically, FCF-positive.
8️⃣ Ratios – Sexy or Stressy?
| Metric | Value |
|---|---|
| ROE (FY25) | 38% |
| ROCE (FY25) | 37% |
| Debtor Days | 170 days ❌ |
| Inventory Days | 33 days ✅ |
| CCC | 79 days ⚠️ |
| Dividend Yield | 0.03% 🥲 |
🧾 Debtors still a red flag. But ROE/ROCE are top-class.
9️⃣ P&L Breakdown – Show Me the Money
FY25 P&L Highlights:
- 🔼 Revenue: ₹316 Cr
- 💰 EBITDA: ₹53 Cr (17% margin)
- 🧾 Interest: ₹9 Cr
- 🧾 Depreciation: ₹3 Cr
- 🧮 PBT: ₹43 Cr
- 💸 PAT: ₹31 Cr
If this keeps up in FY26, even 30x P/E might look justified.
🔟 Peer Comparison – Who Else in the Game?
| Company | P/E | ROE | OPM | Sales (Cr) |
|---|---|---|---|---|
| Genus Power | 39x | 17% | 19% | ₹2,442 |
| Shilchar Tech | 42x | 53% | 30% | ₹623 |
| Premier Energies | 50x | 54% | 27% | ₹6,518 |
| Apar Industries | 41x | 20% | 8% | ₹18,581 |
| RMC Switchgears | 26x | 38% | 17% | ₹316 |
📉 Smallest player in the room, but ROE + growth combo makes it a dark horse.
🔢 Miscellaneous – Shareholding, Promoters
- 👨💼 Promoter holding: 52.07% (down from 56% in FY21)
- 🔄 FII Holding: 5.05% (steadily rising)
- 🧢 Total shareholders: ~2,954 (tripled in 2 years)
- 👩💼 New CS & Compliance Officer appointed (June 2025)
Promoter stake dip isn’t ideal—but rising FIIs and board hires signal institutional cleanup.
🧠 EduInvesting Verdict™
RMC Switchgears Ltd is the classic smallcap hustle story—gritty, fast-growing, but still ignored.
- ✅ Strong profit compounding
- ✅ Great return ratios
- ✅ Emerging in a power-focused India
- ⚠️ But: debtor days, valuation stretch, SME illiquidity
🎯 FV Range Calculation:
- FY25 EPS = ₹29.84
- Assuming FY26 EPS = ₹38 (20% growth)
- Reasonable P/E range = 25x to 30x
- 🎯 Fair Value Range = ₹950 to ₹1,140
At CMP ₹785, it’s not a steal, but not overpriced either if growth sustains.
🧘♂️ Smallcap investors love “valuation + vision”. RMC has both—for now.
✍️ Written by Prashant | 📅 June 30, 2025
Tags: RMC Switchgears, SME stock, multibagger, EPC, electrical equipment, smart meters, solar EPC, ROE 38%, BSE SME, power infra, EduInvesting
