1. At a Glance
Rajoo Engineers is India’s extrusion machinery maven. With OPM zooming to 22%, near-zero debt, and a ₹225 Cr QIP plan, this once-underdog from Gujarat is now trying to punch with the big boys. But is this rally sustainable… or just overheated plastic?
2. Introduction with Hook
If Willy Wonka made plastic machines instead of candy, he’d probably look like Rajoo Engineers. Based in Rajkot and exporting to 70+ countries, this company is quietly becoming the Tesla of Thermoforming.
- 91% profit CAGR over 5 years
- ₹2,035 Cr market cap, 33% ROCE, 22% OPM.
- And yes, they just planned a ₹225 Cr QIP — for a company with zero net debt!
With margins sexier than a Greek vacation and PE frothier than your cappuccino, the only question is: what are they smoking in Rajkot, and can we get some?
3. Business Model (WTF Do They Even Do?)
Rajoo Engineers builds high-performance plastic extrusion machinery — stuff that makes blown films, sheets, thermoformed products, and multilayer packaging. Not toys. Not bags. The machines that make the machines that make your shampoo bottles.
- Core Products: Blown film lines, sheet lines, thermoforming, pipe extrusion
- Segments Served: Food packaging, agriculture, medical, and even defense (hello, multilayer barrier films)
- USP: Custom-built, energy-efficient, automated systems
- Export DNA: 60+ countries. Big in Africa, Latin America, Europe
4. Financials Overview
| FY | Sales (Cr) | EBITDA (Cr) | OPM % | PAT (Cr) | EPS | ROCE % | ROE % |
|---|---|---|---|---|---|---|---|
| 2021 | 170 | 21 | 12% | 12 | 0.73 | 22% | 17% |
| 2022 | 190 | 23 | 12% | 15 | 0.92 | 22% | 18% |
| 2023 | 160 | 14 | 9% | 11 | 0.70 | 12% | 12% |
| 2024 | 197 | 27 | 14% | 21 | 1.28 | 22% | 20% |
| 2025 | 254 | 47 | 18% | 38 | 2.32 | 33% | 26% |
| TTM | 288 | 58 | 20% | 48 | 2.90 | 33%+ | 26%+ |
Mic drop: OPM has gone from 7% in FY20 to 22% in June 2025. No this isn’t a typing error. Yes, it’s borderline witchcraft.
5. Valuation
PE Ratio: 42.7
Book Value: ₹9.95 → Price/Book = 12.5x. Gulp.
Fair Value Range Estimate:
- Base case (EPS ₹2.9 × PE 30) = ₹87
- Bull case (EPS ₹3.5 × PE 45) = ₹157
- Bear case (EPS ₹2.5 × PE 20) = ₹50
Fair Value Range: ₹50 – ₹157
So the current price of ₹124 is… already stretching its thermal limits unless that QIP money turbocharges growth.
6. What’s Cooking – News, Triggers, Drama
- ₹225 Cr QIP Approved: Yes, almost 10x FY25 net profit.
- SIES SOP Star Award 2025: Oscar equivalent for plastic nerds.
- 15M USD overseas orders: International demand is booming.
- India’s first manufacturing park initiated: High Capex, long-term vision.
- Bonus shares issued in Dec 2024 (4 Cr+ shares): Liquidity boost.
- CFO quit in March 2025: Red flag or just a reshuffle?
So is this QIP for growth? Or just dilution disguised in optimism?
7. Balance Sheet
| Year | Equity Cap | Reserves | Debt | Cash | Total Assets |
|---|---|---|---|---|---|
| FY21 | ₹6 Cr | ₹77 Cr | ₹3 Cr | ₹10 Cr | ₹158 Cr |
| FY23 | ₹6 Cr | ₹103 Cr | ₹2 Cr | ₹8 Cr | ₹180 Cr |
| FY25 | ₹16 Cr | ₹147 Cr | ₹0 Cr | ₹13 Cr | ₹324 Cr |
Key Takeaways:
- Equity raised post bonus
- Zero debt = clean slate
- Reserves growing fast → internally funded growth
- QIP could alter this zen balance
8. Cash Flow – Sab Number Game Hai
| Year | Operating CF | Investing CF | Financing CF | Net CF |
|---|---|---|---|---|
| FY21 | ₹18 Cr | ₹-12 Cr | ₹-6 Cr | ₹-1 Cr |
| FY23 | ₹20 Cr | ₹-13 Cr | ₹-2 Cr | ₹5 Cr |
| FY25 | ₹71 Cr | ₹-63 Cr | ₹-2 Cr | ₹5 Cr |
Insight:
Operating cash = strong
Capex = rising
QIP = next funder of growth + capacity
9. Ratios – Sexy or Stressy?
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROCE | 12% | 22% | 33% |
| ROE | 12% | 20% | 26% |
| OPM | 9% | 14% | 18% |
| Inventory Days | 209 | 320 | 339 |
| Cash Conversion Cycle | 173 | 258 | 282 |
Red Flag: Inventory days and CCC ballooning like a plastic bag in a cyclone. QIP better fix this fast.
10. P&L Breakdown – Show Me the Money
| Year | Sales | EBITDA | PAT | EPS | Dividend % |
|---|---|---|---|---|---|
| FY21 | ₹170 Cr | ₹21 Cr | ₹12 Cr | ₹0.73 | 0% |
| FY23 | ₹160 Cr | ₹14 Cr | ₹11 Cr | ₹0.70 | 19% |
| FY25 | ₹254 Cr | ₹47 Cr | ₹38 Cr | ₹2.32 | 6% |
Commentary: PAT almost 3x in two years. Margins expanding. But dividend payout? Meh.
11. Peer Comparison
| Company | P/E | ROCE | OPM | Sales (Cr) | PAT (Cr) | Mcap (Cr) |
|---|---|---|---|---|---|---|
| Kaynes Tech | 136.8 | 14.4% | 15% | 2721 | 293 | ₹40,161 Cr |
| Tega Inds. | 56.3 | 17.7% | 20.7% | 1638 | 200 | ₹11,270 Cr |
| Jyoti CNC | 71.5 | 24.3% | 27% | 1817 | 322 | ₹23,088 Cr |
| Rajoo Eng. | 42.7 | 32.8% | 22% | 288 | 48 | ₹2,035 Cr |
Conclusion: Rajoo has best ROCE–Mcap combo. A small-cap punching above its weight.
12. Miscellaneous – Shareholding, Promoters
- Promoter Holding: ~66% (steady)
- FII Interest: Negligible but inching in (0.02% as of May 2025)
- Retail Participation: Up from 23K to 50K shareholders in 2 years.
- No ESOP drama or pledging: Clean sheet
- Bonus Share in Dec 2024: Sent the stock flying, but now range-bound
13. EduInvesting Verdict™
Rajoo Engineers is not your average plastic machinery company — it’s lean, clean, and margin mean. With record profits, stellar return ratios, and a near debt-free balance sheet, it could easily be a small-cap superstar.
But there’s a twist in the tale: QIP of ₹225 Cr could signal ambition — or overreach. Add ballooning inventory days and a PE ratio nearing nosebleed altitude, and the stock starts smelling a bit… synthetic.
Still, if execution stays solid, Rajoo could extrude its way into the ₹5,000 Cr club.
Metadata
– Written by EduInvesting Research | 12 July 2025
– Tags: Rajoo Engineers, Plastic Machinery, Extrusion, QIP, Gujarat Manufacturing, Smallcap Growth, ROCE Stars, 13 Point Article, Edu Style
