Raj Rayon Industries Limited (RAJRILTD) AI Stock Analysis

• Market Cap: ₹11.61B
• Dividend Yield: N/A
• Average Volume (3M): 3.06K
• Price to Earnings (P/E): 52.6
• Beta (1Y): 0.18
• Revenue Growth: 22.75%
• EPS Growth: N/A
• Country: IN
• Employees: 317
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Apparel - Manufacturers
• EPS (TTM): 0.11
• Shares Outstanding: 556,082,500
• 10 Day Avg. Volume: 5,101
• 30 Day Avg. Volume: 3,063
• PEG Ratio: 0.34
• Price to Book (P/B): 9.31
• Price to Sales (P/S): 1.34
• P/FCF Ratio: -16.64
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 40 Underperform
• Price Target: ₹20.00 ▼(-10.87% Downside)
• Action: Downgraded Date: 11/26/25
• Date: Action: Downgraded 11/26/25

The overall stock score is primarily influenced by financial performance challenges, including high leverage and negative free cash flow. Technical analysis indicates bearish momentum, and valuation suggests potential overvaluation. The absence of earnings call data and corporate events limits further insights.

Positive Factors

Revenue Growth

Sustained revenue growth across 2023–2025 suggests expanding end-market demand or increased share in the man-made fibre and yarn value chain. Over a 2–6 month horizon this scale growth supports operating leverage, potential margin improvement if costs are managed, and a firmer base for future cash generation.

Operating Cash Flow Improvement

Improving operating cash flow indicates the core business is converting sales into cash more effectively. Structurally this reduces short-term liquidity pressure, supports working capital needs, and lowers immediate reliance on external short-term funding, bolstering resilience over the coming months if the trend holds.

Equity Base Recovery

An improving shareholders' equity position provides a stronger solvency buffer and enhances long-term financial stability. If sustained, rising equity helps improve covenant headroom, borrowing terms and reduces insolvency risk, enabling the company to pursue strategic investments with less incremental leverage over time.

Negative Factors

High Leverage

A high debt-to-equity ratio signals material leverage that increases interest expense and refinancing risk. Over a 2–6 month horizon this constrains strategic flexibility, amplifies vulnerability to rate moves or revenue shocks, and may force prioritization of debt service over growth or efficiency investments.

Negative Free Cash Flow

Persistent negative free cash flow driven by elevated capex limits the company’s ability to deleverage organically or accumulate reserves. Structurally this increases dependence on external financing, heightens liquidity and execution risk, and can delay meaningful improvements to the balance sheet absent cash generation gains.

Low & Inconsistent Margins

Low and volatile gross and net margins point to limited pricing power or cost control issues in the business model. Over months this reduces retained earnings available for reinvestment, makes results sensitive to input cost swings, and hampers the company’s ability to build sustainable profitability without structural efficiency gains.

Raj Rayon Industries Limited Business Overview & Revenue Model

Company Description

Raj Rayon Industries Limited engages in the manufacturing and trading of polyester chips, and polyester and processed yarns in India. It offers round, trilobal, and octalobal yarns, as well as full dull, semi dull, bright, cationic, doped dyed, fire retardant, and anti-microbial yarns. The company also exports its products to Brazil, Chile, Colombia, Mexico, Poland, Spain, Thailand, Iran, Egypt, Syria, Vietnam, Morocco, Peru, Gautemala, and internationally. The company was formerly known as Raj Rayon Limited and changed its name to Raj Rayon Industries Limited in August 2010. Raj Rayon Industries Limited was incorporated in 1993 and is based in Mumbai, India.

Raj Rayon Industries Limited Financial Statement Overview

Summary

Raj Rayon Industries Limited has shown revenue growth but struggles with high leverage and negative free cash flow. Profit margins are inconsistent, and financial stability is impacted by significant debt levels.

Income Statement

The company has shown a significant revenue growth from 2023 to 2025, with a notable increase in gross profit. However, the gross profit margin remains low, and net profit margins have been inconsistent. The EBIT and EBITDA margins indicate limited profitability. The company needs to improve efficiency and cost management to enhance profitability.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio, indicating significant leverage. Although stockholders' equity has improved, the company remains heavily reliant on debt financing. The equity ratio suggests a moderate level of asset financing through equity, but the overall financial stability is impacted by the high leverage.

Cash Flow

The cash flow statement shows improvement in operating cash flow, but free cash flow remains negative due to high capital expenditures. The company needs to manage its capital investments better to improve free cash flow generation. The operating cash flow to net income ratio is positive, indicating some level of operational efficiency.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Jun 2021
Income Statement
Total Revenue	10.15B	8.49B	7.45B	1.37B	550.00K	0.00
Gross Profit	2.07B	1.57B	645.21M	-63.84M	-279.89M	-355.04M
EBITDA	613.28M	342.84M	300.92M	18.16M	-24.21M	7.25M
Net Income	356.90M	138.06M	40.43M	-123.77M	6.41B	-347.78M
Balance Sheet
Total Assets	5.89B	5.00B	4.21B	3.11B	1.02B	1.55B
Cash, Cash Equivalents and Short-Term Investments	229.98M	80.40M	70.30M	12.70M	900.00K	586.00K
Total Debt	2.08B	2.37B	1.76B	1.26B	0.00	7.09B
Total Liabilities	4.52B	3.78B	3.13B	2.07B	21.14M	7.61B
Stockholders Equity	1.37B	1.22B	1.08B	1.04B	1.00B	-6.06B
Cash Flow
Free Cash Flow	535.03M	-685.34M	-135.56M	-1.40B	-107.48M	191.00K
Operating Cash Flow	825.64M	368.23M	787.13M	-751.84M	-49.34M	191.00K
Investing Cash Flow	-291.35M	-831.82M	-1.11B	-650.39M	-58.13M	0.00
Financing Cash Flow	-384.71M	473.58M	387.35M	1.40B	107.79M	317.00K

Raj Rayon Industries Limited Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 22.44
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IN:RAJRILTD, the sentiment is Negative. The current price of 22.44 is above the 20-day moving average (MA) of 22.32, above the 50-day MA of 21.81, and below the 200-day MA of 24.88, indicating a bearish trend. The MACD of -0.22 indicates Positive momentum. The RSI at 34.09 is Neutral, neither overbought nor oversold. The STOCH value of 13.61 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IN:RAJRILTD.

Raj Rayon Industries Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RSWM	66 Neutral	₹6.32B	73.65	―	―	5.54%	―
SANGAMIND	63 Neutral	₹22.02B	25.56	―	0.45%	13.88%	-0.56%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
AYMSYNTEX	60 Neutral	₹10.85B	178.44	―	―	-2.89%	-94.82%
BASML	44 Neutral	₹1.58B	22.90	―	―	-8.50%	―
HIMATSEIDE	43 Neutral	₹9.88B	46.69	―	0.21%	-7.55%	-30.11%
RAJRILTD	40 Underperform	₹11.61B	52.64	―	―	22.75%	―