At a Glance
Rose Merc Ltd went from doing ₹1 Cr revenue in FY23 to ₹79 Cr in FY25. It reported ₹16 Cr PAT, trades at 2x P/E, has a book value of ₹152… but promoter holding is 0.15%. Also, it now owns 30% of a hotel company and runs a T20 league. Is this a turnaround or a dressed-up vanity project?
1. 🎬 Introduction with Hook
“Yeh company kya karti hai?”
Great question. So is: How did it go from ₹1 Cr revenue to ₹79 Cr in two years, without anyone noticing?
Because Rose Merc, founded in 1985, was just a sleepy BSE-listed shell trading “general merchandise” for decades. Suddenly in FY25:
- ₹79 Cr revenue
- ₹16 Cr profit
- 33% ROE
- Cricket league rights
- Stake in hospitality firm
You can’t make this up. So we dug into the (scant) data.
2. 🧩 WTF Do They Even Do? (Business Model)
🔹 Trading – Retail & Wholesale
- General Merchandise (not defined)
- Possibly finance-linked items or bulk inventory
🔹 Wealth Building Services
- Whatever that means. Possibly prop investments?
🔹 Event Subsidiaries
- Owns rights to Navi Mumbai Premier League (NMPL)
- Supports fashion shows in Dubai (???)
🔹 Hospitality Stake
- Acquired 30% stake in Vastavya Rose Merc Hotels for ₹30,000 (lol)
So we’re talking about a multi-vertical trader + event sponsor + startup incubator + hotel dabbler. Got it.
3. 📈 Financials – Profit, Margins, Growth
| Year | Revenue (₹ Cr) | PAT (₹ Cr) | OPM % | ROE % | ROCE % |
|---|---|---|---|---|---|
| FY23 | 1 | -0.01 | -25% | NA | NA |
| FY24 | 5 | 0.04 | -2% | ~3% | 3% |
| FY25 | 79 | 16.1 | 21% | 32.9% | 33.3% |
🧨 TTM Sales growth: +1389%
💥 TTM PAT growth: +4145%
Either someone turned on the growth faucet… or someone turned on the fog machine. 🚨
4. 💸 Valuation – Is It Cheap, Meh, or Crack?
| Metric | Value |
|---|---|
| CMP | ₹60.8 |
| Market Cap | ₹31.6 Cr |
| EPS (FY25) | ₹26.83 |
| P/E | 1.96x |
| Book Value | ₹152 |
| P/B | 0.40x |
📉 Trades at 0.4x book, 2x earnings
🧠 That’s classic “either a screaming bargain or a fraud” zone
📌 Fair Value Range = ₹54 – ₹80
Assuming 4–6x PE on ₹16 Cr profit
5. 🧾 What’s Cooking – News, Events, Acquisitions
✅ FY25 Bombshell:
- ₹79 Cr revenue
- ₹16 Cr PAT
- Massive margin jump to 21%
- No debt
🏏 NMPL League Rights:
- Subsidiary granted exclusive rights for NMPL Season 4
- Sponsorship + event management – revenue model unclear
🏨 Stake in Hospitality Startup:
- Acquired 30% in Vastavya Rose Merc for ₹30,000
- Looks like a related party startup
💃 Dubai Fashion Show:
- Promoted the Emirates Luxury Show for sustainability & inclusivity
- Why? Nobody knows. But good photo-op.
6. 🧾 Balance Sheet – How Much Debt, How Many Dreams?
| Year | Equity Capital | Reserves | Borrowings | Total Assets |
|---|---|---|---|---|
| FY23 | ₹2 Cr | ₹3 Cr | ₹0 | ₹6 Cr |
| FY25 | ₹6 Cr | ₹74 Cr | ₹2 Cr | ₹87 Cr |
✅ Massive reserves boost from FY25 profit
❗ Very low capital base = high ROE by design
📉 Still no major fixed assets – likely a pure trading/investment play
7. 💵 Cash Flow – Sab Number Game Hai
| Year | CFO (₹ Cr) | Net Cash Flow |
|---|---|---|
| FY24 | -₹8 Cr | ₹-0 Cr |
| FY25 | -₹3 Cr | ₹8 Cr (from funding) |
⚠️ Despite big PAT, cash from ops is negative
📌 FY25 mainly propped up by ₹14 Cr financing inflow
8. 📊 Ratios – Sexy or Stressy?
| Metric | FY25 Value |
|---|---|
| ROE | 32.9% |
| ROCE | 33.3% |
| OPM | 21% |
| P/E | 1.96 |
| P/B | 0.40 |
| CCC (Days) | 110 |
| Working Capital Days | 138 |
📈 On paper – this is a dream company
📉 In reality – data fog + unclear ops
9. 🧑🤝🧑 Shareholding Pattern
| Category | Mar ’23 | Mar ’25 |
|---|---|---|
| Promoters | 0.34% | 0.15% |
| Public | 99.66% | 99.84% |
| Shareholders | 685 | 969 |
🚩 Promoter holding near-zero
🚨 Could be a shell / legacy company with retail bag-holding risk
10. 📢 Red Flags & Speculation
🚩 Where did ₹79 Cr revenue come from in FY25?
→ No breakdown in announcements, no audit note in public
🚩 Event & hospitality side activities
→ Low capex, high-margin optics?
🚩 Stock hit ₹177 once, now at ₹60
→ -58% in 1 year, while PAT jumped 4,000% 😵
🚩 Company Secretary resigned in July 2025
→ CS turnover during sudden profitability spike = not ideal
11. 🧑⚖️ EduInvesting Verdict™
“When a company triples its reserves, buys a hotel stake, runs a cricket league, and sponsors Dubai fashion weeks – all in one year – you better double-check the books.”
✅ Super cheap
✅ Debt free
✅ Incredible ROE
But…
❌ No promoter skin
❌ No clarity on revenue jump
❌ Negative operating cash flow
❌ Smells like a valuation-dressing operation
🎯 Fair Value = ₹54 – ₹80 (Assuming ₹10–₹16 Cr real PAT, 4–6x P/E)
Verdict? Until the cricket team wins the IPL or the books are explained… this looks more like a scripted drama than a sustainable biz.
✍️ Written by Prashant | 📅 08 July 2025
Tags: Rose Merc, Low Promoter Holding Stocks, Penny Stock Turnarounds, BSE Shell Company, NAVI Mumbai Premier League, SME Hospitality, EduInvesting Analysis, Suspicious Profits, Event Management Stocks
