1. At a Glance
Rajoo Engineers is the kind of company that makes machines which make the plastic films and sheets that make the packaging that make you wonder why there’s so much plastic in your life. Founded in 1986, headquartered in Gujarat, they’re market leaders in blown film lines, sheet lines, thermoforming, and extrusion coating & laminating lines. FY25 TTM profit growth is a staggering 99%, ROCE is a juicy 32.8%, and they’ve practically wiped out debt. But before you pop champagne – the stock trades at 10.3x book value, promoters trimmed 5.7% stake last quarter, and the share price is still recovering from a 52% fall in the last year.
2. Introduction
Some companies chase hot trends. Rajoo Engineers is the hot trend – at least in the world of industrial plastic extrusion machinery. From humble beginnings in Rajkot, they’ve grown into a recognized Asian leader in their niche. The numbers are the kind that make spreadsheet nerds salivate: 91% PAT CAGR over 5 years, working capital cycle slashed from 37.8 days to 12.7 days, and debtor days down to 21.7 – faster collections than some e-commerce startups.
Still, it’s not all smooth extrusion – inventory days are stubbornly high (339 in FY25), signalling either order-book build-up or a “just-in-case” stocking mentality. And while the QIP war chest of ₹160 crore is locked and loaded for acquisitions, investors are watching whether management’s recent shareholding cut means “making space for institutions” or “time to take some chips off the table.”
3. Business Model (WTF Do They Even Do?)
Rajoo Engineers builds plastic extrusion machinery – the industrial beasts that churn out the sheets, films, and thermoformed products used
in packaging, agriculture, construction, and consumer goods.
Core segments:
- Blown Film Lines – for making multi-layer plastic films.
- Sheet Lines – for packaging, thermoforming.
- Thermoforming Machines – for disposable food containers, trays.
- Extrusion Coating & Laminating Lines – for flexible packaging and industrial applications.
Their business thrives on capex cycles of packaging manufacturers, demand for high-barrier food-grade films, and the unstoppable rise of flexible packaging in emerging markets.
4. Financials Overview
Fresh P/E calculation (annualised):
Latest quarterly EPS ₹0.92 → Annualised = ₹3.68
CMP ₹102 ÷ ₹3.68 ≈ P/E ~ 27.7 (lower than the displayed 38.4 because of profit surge).
FY25 (Consolidated):
- Revenue: ₹288 cr (↑13% YoY)
- EBITDA: ₹58 cr (EBITDA margin 20%)
- PAT: ₹48 cr (PAT margin 16.7%)
- ROCE: 32.8%, ROE: 26.3%
Growth track:
- Sales CAGR 5Y = 21%
- PAT CAGR 5Y = 91%
- TTM profit growth = 99%
Commentary: This is the rare manufacturing story where profits are growing faster than sales – a sign of margin expansion and cost efficiency.
5. Valuation – Fair Value Range
- P/E Method:
EPS FY25A = ₹2.90
Sector fair range: 25x–30x
→ FV range = ₹72.5 – ₹87 (suggests CMP is rich
