1. At a Glance
Rajesh Power Services Ltd. is lighting up the SME space—literally and figuratively. From fixing cables to EPC solar gigs, this power consultant turned EPC warrior clocked ₹1,072 Cr revenue in FY25, with ROE so high it should wear a helmet (51%). But is the current valuation electrifying or shocking?
2. Introduction with Hook
Imagine your electrician uncle suddenly getting hired to design power grids for GIFT City—and winning ₹220 Cr contracts. That’s basically Rajesh Power’s 50-year glow-up story.
- FY25 Net Profit: ₹87 Cr (up from ₹26 Cr in FY24)
- ROCE: 55.2% (this isn’t a typo, we double-checked)
- Stock up 2x from ₹636 to ₹1,344 (within 1 year)
But… they’re trading at 9.45x Book Value, paying 0% dividend, and running negative operating cash flows. Uh-oh.
3. Business Model (WTF Do They Even Do?)
Rajesh Power runs a multi-socket business model:
- EPC Services: End-to-end project execution in both renewable (solar) and non-renewable (traditional T&D infra).
- Consultancy: From DPR prep to liaisoning—think “brains of the operation.”
- O&M: Keeps solar plants alive post-installation, like a power plant nanny.
- Utility Fixers: Underground cable fault restoration, transformer replacements, etc.
They’re also operating their own 1 MW solar plant and eyeing green hydrogen tech. Because every 2025 PowerPoint deck must mention hydrogen.
4. Financials Overview
Profit & Loss (FY25):
| Metric | FY25 | FY24 | FY23 |
|---|---|---|---|
| Revenue (Cr) | ₹1,072 | ₹285 | ₹207 |
| EBITDA (Cr) | ₹125 | ₹34 | ₹14 |
| Net Profit (Cr) | ₹87 | ₹26 | ₹7 |
| EPS (₹) | 48.48 | 17.10 | 4.44 |
| OPM (%) | 12% | 12% | 7% |
| ROE (%) | 51.3% | 38% est. | 17% est. |
Verdict: This isn’t growth. This is a voltage surge. Revenue 4x in 12 months? CFO probably got a raise… and a fire extinguisher.
5. Valuation
Methods Used:
- DCF (but cash flows = negative… awkward)
- PE-based multiple (more reliable)
- Book Value comparison (ouch)
Fair Value Range:
₹850 – ₹1,150
At CMP ₹1,344, it’s priced like a unicorn, but the cash flow is giving buffalo.
6. What’s Cooking – News, Triggers, Drama
- ₹220 Cr Order from MGVCL – 11KV MVCC project (9 months)
- ₹59.79 Cr GIFT City order – They’re building Gujarat’s bling city infra
- Declared L1 bidder for more T&D contracts under MGVCL
- Virtual investor call (June 2025) saw 3,000+ attend—a record for SME?
Drama Potential: Green hydrogen announcement? IPO to mainboard? Or… cash flow crunch?
7. Balance Sheet
| Year | Equity | Reserves | Borrowings | Total Liabilities | Fixed Assets | Other Assets |
|---|---|---|---|---|---|---|
| FY25 | ₹18 Cr | ₹238 Cr | ₹55 Cr | ₹526 Cr | ₹18 Cr | ₹498 Cr |
Key Points:
- Borrowings reduced.
- Asset-light model mostly—except that pesky ₹55 Cr debt.
- Ballooning reserves = retained profit hoarding?
8. Cash Flow – Sab Number Game Hai
| Year | CFO (₹ Cr) | CFI (₹ Cr) | CFF (₹ Cr) | Net CF (₹ Cr) |
|---|---|---|---|---|
| FY25 | -21 | -26 | +47 | ~0 |
| FY24 | -15 | +6 | +8 | ~0 |
Key Points:
- Consistently negative operating cash flows.
- Relies on financing to keep lights on.
- Aka: “Profitable on paper, broke in cash.”
9. Ratios – Sexy or Stressy?
| Ratio | FY25 | FY24 | FY23 |
|---|---|---|---|
| ROE (%) | 51.3 | 38 (est.) | 17 (est.) |
| ROCE (%) | 55.2 | 31 | 15 |
| Debtor Days | 62 | 94 | 103 |
| CCC (Days) | 38 | 103 | 108 |
| Interest Coverage | 8.3x | 4.2x | 2.1x |
| Current Ratio | Healthy-ish | Mid | Meh |
Verdict: Ratios looking like they’ve been on a strict gym + protein plan.
10. P&L Breakdown – Show Me the Money
| FY | Revenue | Op Profit | Net Profit | EPS | OPM % | PAT Margin % |
|---|---|---|---|---|---|---|
| 2025 | ₹1,072 | ₹125 Cr | ₹87 Cr | 48.48 | 12% | 8.1% |
| 2024 | ₹285 | ₹34 Cr | ₹26 Cr | 17.1 | 12% | 9.1% |
| 2023 | ₹207 | ₹14 Cr | ₹7 Cr | 4.44 | 7% | 3.4% |
11. Peer Comparison
| Company | CMP ₹ | P/E | ROE % | Mcap ₹ Cr | OPM % | CFO ₹ Cr |
|---|---|---|---|---|---|---|
| Rajesh Power | 1,344 | 27.7 | 51.3 | 2,421 | 12% | -21 |
| Power Mech | 5,600 | 30.1 | 20.2 | 9,200 | 11% | +400 |
| Kalpataru Power | 1,300 | 18.2 | 15.0 | 19,000 | 13% | +800 |
Verdict: Rajesh Power’s margins and returns are top-tier. But the cash flow and size are still SME league.
12. Miscellaneous – Shareholding, Promoters
| Category | Mar 2025 |
|---|---|
| Promoters | 73.4% |
| Public | 20.88% |
| FIIs | 0.84% |
| DIIs | 4.88% |
- Promoter holding solid.
- FII exit trend post IPO?
- 3,000+ shareholders already—clearly no secret in SME circles.
13. EduInvesting Verdict™
No Buy/Sell View (because we’re classy like that)
Rajesh Power has transformed from a quiet consultant into a fire-breathing EPC juggernaut. The numbers scream growth, margins are toasty, and order wins keep stacking.
But the stock is valued like Adani, and cash flow reads like Paytm 2018.
Great business model, solid execution, low debt, juicy ROE—yes.
But watch your fingers—because touching a hot stock too early can burn.
Metadata
– Written by EduInvesting | July 13, 2025
– Tags: PowerInfra, EPC, SMEStocks, RenewableEnergy, RajeshPower, HighVoltageValuation, IndiaInfraBoom
