⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
RHIM - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 2.9
| Stock Code | RHIM | Market Cap | 8,934 Cr. | Current Price | 433 ₹ | High / Low | 548 ₹ |
| Stock P/E | 49.5 | Book Value | 199 ₹ | Dividend Yield | 0.58 % | ROCE | 7.71 % |
| ROE | 5.62 % | Face Value | 1.00 ₹ | DMA 50 | 448 ₹ | DMA 200 | 470 ₹ |
| Chg in FII Hold | -0.37 % | Chg in DII Hold | 0.39 % | PAT Qtr | 41.3 Cr. | PAT Prev Qtr | 46.5 Cr. |
| RSI | 47.2 | MACD | -7.81 | Volume | 93,753 | Avg Vol 1Wk | 5,37,620 |
| Low price | 376 ₹ | High price | 548 ₹ | PEG Ratio | -8.51 | Debt to equity | 0.02 |
| 52w Index | 33.0 % | Qtr Profit Var | -15.4 % | EPS | 8.74 ₹ | Industry PE | 38.4 |
📊 Core Financials
- Revenue & Profitability: Quarterly PAT at ₹41.3 Cr, down from ₹46.5 Cr, showing declining profitability. EPS at ₹8.74 is modest relative to market cap.
- Margins: ROE at 5.62% and ROCE at 7.71% reflect weak efficiency and profitability.
- Debt Ratios: Debt-to-equity at 0.02 shows negligible leverage, which is positive for financial stability.
- Cash Flows: Debt-free structure supports cash flow stability, but declining profits raise concerns.
💹 Valuation Indicators
- P/E Ratio: 49.5, significantly higher than industry average of 38.4, suggesting overvaluation.
- P/B Ratio: Current price ₹433 vs. book value ₹199 → ~2.17x, moderately expensive relative to assets.
- PEG Ratio: -8.51, negative, reflecting poor growth-adjusted valuation.
- Intrinsic Value: Current valuation exceeds intrinsic worth, offering little margin of safety.
🏢 Business Model & Competitive Advantage
- RHI Magnesita (RHIM) operates in refractory products, serving steel, cement, and industrial sectors.
- Competitive advantage lies in global presence, product quality, and industry expertise.
- However, weak profitability and stretched valuation undermine overall health.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Safer accumulation range between ₹380 – ₹400, closer to 52-week low and below DMA200.
- Long-Term Holding: Risky at current valuations; suitable only for high-risk investors betting on industrial demand recovery. Conservative investors should wait for earnings improvement.
✅ Positive
- Debt-to-equity ratio of 0.02 ensures financial resilience.
- DII holding increased (+0.39%), showing domestic institutional support.
- Stock has delivered 33% gain over 52 weeks.
⚠️ Limitation
- High P/E ratio compared to industry average.
- Weak ROE (5.62%) and ROCE (7.71%).
- Dividend yield of 0.58% is modest.
📉 Company Negative News
- Quarterly PAT declined from ₹46.5 Cr to ₹41.3 Cr.
- FII holding decreased (-0.37%), showing reduced foreign investor confidence.
- Profit variation of -15.4% highlights earnings instability.
📈 Company Positive News
- DII holding increased (+0.39%).
- Stock has maintained resilience above 52-week low of ₹376.
- Debt-free structure continues to attract investors.
🏭 Industry
- Refractory and industrial materials sector trades at industry PE of 38.4, lower than RHIM’s 49.5, showing premium valuation.
- Sector growth supported by steel and cement demand, though cyclical risks remain.
🔎 Conclusion
- RHIM is financially stable with negligible debt but faces weak profitability and stretched valuation.
- Current levels are unattractive for fresh entry; better suited for speculative investors.
- Conservative investors should wait for correction near ₹380 – ₹400 before considering entry.
Would you like me to also prepare a comparative HTML snapshot of RHIM versus Orient Refractories to highlight valuation and profitability differences in the refractory sector?