Rockingdeals Circular Economy: A Smallcap Stock to Watch
A leading refurbished and excess inventory management company, Rockingdeals Circular Economy Limited, is aiming for substantial growth with revenue targets of INR 400-500 crore by fiscal year 2027. The company anticipates profit after tax margins of 10-15%, solidifying its position within India's circular economy sector.
Share Price Movement
On Monday, the share price of Rockingdeals Circular Economy Limited experienced a dip of 2.37 percent, closing at Rs. 589.95 per share. This was a slight decrease from its previous close of Rs. 591.85 per share. As of January 14, 2025, the company’s market capitalization stands at approximately Rs. 333 crore.
What's Driving Growth?
The company has projected an impressive 80-100% growth in Profit After Tax (PAT) for FY25. This optimism is supported by the expansion of its operations through new store openings, a partnership with Livpure, and the successful integration of franchise and retail operations. Rockingdeals has ambitious plans for 4QFY25, including the opening of 3+ franchise stores, expanding its reach in the East Zone, and launching operations in Dubai.
Furthermore, the company is working towards obtaining an e-waste recycling license by the end of FY25. A recent preferential issue received positive investor interest, providing a boost to future growth initiatives. With an eye on the future, RDCEL aims to reach INR 400-500 crore in revenue by FY27, targeting a PAT margin of 10-15%.
Financial Highlights
Remarkable Growth in 2024
Rockingdeals Circular Economy demonstrated exceptional financial performance in 2024. Revenue surged to Rs. 49.56 Cr, a 230% increase from Rs. 15.01 Cr in 2023. Simultaneously, profit experienced a 238% jump, increasing from Rs. 1.54 Cr in 2023 to Rs. 5.21 Cr in 2024.
Consistent Performance Over Time
The company has shown consistent and strong performance over various timeframes. Trailing twelve months (TTM) sales growth stands at 230%, with profit growth at 238%. Looking at a 3-year horizon, they’ve achieved 67% sales growth and a remarkable 374% profit growth.
Strong Return on Equity (ROE)
Return on Equity (ROE) metrics are highly encouraging with 75% in the last year and 37% over a 3-year period. These figures indicate that the company is growing rapidly and is also generating strong returns for its shareholders.
Price-to-Earnings (P/E) Ratio
The average price-to-earnings (P/E) ratio within the trading industry is 33.68. Rockingdeals Circular Economy’s current P/E ratio is higher, standing at 48.82.
Market Outlook
India’s retail industry is displaying strong growth, propelled by rising consumer purchasing power and increasing demand. The expansion of the retail sector is evident, with around 60 new shopping malls opening between 2023–25. The sector contributes more than 10% to India’s GDP. Innovation in financing solutions, like easy credit options, are helping consumers gain access to durable goods.
Although e-commerce funding saw a reduction in 2023, global investors continue to show interest in India’s retail sector, indicating a promising future. India remains the fourth largest retail market in the world, offering abundant growth opportunities.
Shareholding Pattern
As per the shareholding pattern recorded in September 2024, the promoters hold a significant 65 percent of Rockingdeals Circular Economy Limited. Foreign institutional investors own a minimal 0.03 percent, while the public holds 34.79 percent.
About the Company
Founded in 2002, Rockingdeals Circular Economy Limited specializes in the bulk trading of excess inventory and re-commerce items, emphasizing sustainable practices through the reuse and recycling of products. The company offers a broad selection of discounted products, spanning electronics, fashion, and lifestyle goods, from well-known brands like Zara, Nike, and Reebok. Rockingdeals is a prominent participant in India’s re-commerce market.
Disclaimer
The views and investment tips expressed on this website are for informational purposes only. Investing in equities carries the risk of financial losses. Investors must exercise caution when making investment decisions. The author and publisher are not liable for any losses incurred as a result of decisions based on this article. It is advisable to consult with a qualified investment advisor before making any investment.
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