RHIM - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 3.3

📊 Core Financials Analysis

Profitability

ROE: 5.62% and ROCE: 7.71% — below industry benchmarks, indicating modest capital efficiency.

EPS: ₹9.10 — relatively low, especially given the high valuation.

PAT Qtr: ₹46.5 Cr vs ₹36.4 Cr — sequential improvement, but YoY profit variation of −43.0% signals volatility.

Balance Sheet & Cash Flow

Debt-to-equity: 0.01 — virtually debt-free, a major strength.

Dividend Yield: 0.52% — modest, not a major income generator.

Cash flows are stable, but earnings inconsistency limits visibility.

📉 Valuation Indicators

Metric Value Interpretation

P/E Ratio 53.0 Overvalued vs industry PE of 43.0

P/B Ratio ~2.45 Reasonable given asset-light model

PEG Ratio −9.10 Negative PEG suggests unreliable growth expectations

Intrinsic Value ₹378–₹395 (est.) Current price ~20–25% above fair value

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🧠 Business Model & Competitive Edge

Company Profile: RHI Magnesita India Ltd (RHIM) is a leading supplier of refractory products and solutions used in high-temperature industrial processes, especially in steel, cement, and glass manufacturing.

Strengths

Global parentage with access to advanced technology and global markets.

Strong manufacturing footprint and product customization capabilities.

Challenges

Weak profitability and high valuation multiples.

Analysts classify RHIM as an “economical performer” with limited margin strength

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EPS and ROE remain subdued despite sectoral demand.

📈 Technical & Sentiment Overview

RSI: 50.3 — neutral zone, no strong momentum.

MACD: -2.75 — bearish crossover, short-term weakness.

DMA 50 & 200: Price hovering near both — trend indecisive.

Volume: Slightly above average — steady interest.

FII/DII Holding: Mixed — FII flat, DII reduced.

💡 Entry Zone & Long-Term Guidance

Suggested Entry Range: ₹375–₹400 — closer to intrinsic value and technical support.

Holding Strategy

Suitable for long-term investors seeking niche industrial exposure.

Price targets for FY27 range from ₹540 to ₹685 based on projected earnings

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Monitor margin expansion, export growth, and sector demand cycles.

RHIM is a specialized industrial play with global backing and low debt, but current valuations and profitability metrics suggest caution. If you're building a portfolio with exposure to manufacturing inputs and can tolerate cyclical swings, this one may be worth accumulating gradually. You can explore deeper valuation insights on AlphaSpread’s RHIM dashboard or review long-term forecasts on Stocks-Buy’s RHIM analysis.

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