RSWM Ltd (RSWM)
CyclicalFairStock Score: 26/100 — RISKY
Score breakdown: P/E: 1/3 · ROCE: 0/2 · Growth: 2/2 · Dividend: 0/1
Key Financials
| Current Price | ₹199.1 |
| Market Cap | ₹937.79 Cr |
| P/E Ratio | 14.84 |
| ROCE | 2.59% |
| ROE | 3.91% |
| Dividend Yield | 0% |
| Profit Growth | 140.52% |
| Debt/Equity | 1.24 |
| Sales Growth | -0.9% |
| Promoter Holding | 55.69% |
| 52-Week Range | ₹120 — ₹238 |
| Sector | Textiles & Apparels |
| Book Value | ₹288.96 |
Strengths
- Price-to-book of 0.56 offers valuation support against book value of ₹279.73.
- Promoter holding of 55.69% aligns management with minority shareholders.
- Piotroski F-Score of 6/9 suggests some recent financial improvement.
- Quarterly sales of ₹1,091 crore indicate a sizeable operating base.
Concerns
- ROE of 1.46% and ROCE of 2.59% show weak return on capital.
- Latest quarter net profit of just ₹2 crore on ₹1,091 crore sales is razor-thin.
- Sales declined 8.77%, indicating demand and pricing pressures.
- Debt/equity of 1.16 with no dividend limits financial flexibility.
AI Analysis
When I look at RSWM Limited, I see a business selling for ₹157.07, or only 0.56 times its book value of ₹279.73. That discount grabs a Graham reader's attention. But I learned long ago that price is no substitute for business quality. This textile company earned just ₹2 crore net profit on ₹1,091 crore of quarterly sales. That is a razor-thin margin. Sales are down 8.77%, and ROE is a pitiful 1.46%, with ROCE at 2.59%. The 214.84% profit growth is a mirage because it starts from a very small base; the P/E of 25.37 is high for a reason. Debt to equity of 1.16 worries me—when returns are this low, leverage only hurts. Promoter holding at 55.69% is good, and the Piotroski F-Score of 6/9 shows some recent financial improvement, but no dividend means shareholders receive nothing while the business struggles. The PEG ratio of 0.12 is mathematically appealing but economically meaningless in a cyclical downcycle. Textiles are a capital-intensive, cyclical business, and this looks like a low-return asset with a book-value cushion. A company earning 1.46% on equity is not a compounding machine. I would watch whether sales stop falling and whether ROCE moves sustainably above its cost of capital. Until then, this is a cyclical value trap, not a wonderful company at a fair price. I will keep it on my watchlist, not in my portfolio.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer