Rajesh Power Services provides end-to-end engineering and construction services for electrical infrastructure, specializing in underground power cabling and high-voltage substations for government utilities and private industrial clients.
The company possesses a narrow moat rooted in specialized technical qualifications for high-voltage (up to 400kV) underground cabling and GIS substations, which have higher barriers to entry than standard overhead lines. This is corroborated by a robust average ROCE of 26.5% and the ability to maintain double-digit EBITDA margins despite volatile raw material costs.
Management has successfully scaled the business using an asset-light model, reinvesting profits into higher-voltage capabilities and strategic digital energy associates. The recent IPO proceeds are being deployed toward capital expenditure and working capital to support a massive 100%+ revenue growth trajectory.
The company's aggressive expansion into high-voltage projects led to a working capital trap where growth outpaced cash generation. By FY2030, the massive surge in trade receivables observed in the filings proved uncollectible as state utilities delayed payments, turning the negative cash conversion into a liquidity crisis. The heavy geographic concentration in Gujarat left the firm vulnerable to a localized shift in procurement policy, while related party transactions and increased managerial pay signaled a shift from shareholder alignment to promoter enrichment, causing the stock to de-rate permanently as the asset-light model collapsed under the weight of unpaid bills.
RichFakir rates Rajesh Power Services Ltd's business quality as decent — 67/100 on our quality score (profitability, growth, balance-sheet strength and capital allocation). We assess its competitive moat as narrow.
On our model, Rajesh Power Services Ltd is trading far above our estimate of fair value (expensive on our lens); we rate its price expensive. This is an educational estimate from public filings, not a recommendation.
RichFakir's educational verdict on Rajesh Power Services Ltd is: Avoid. We are steering clear of this one — the red flags below outweigh anything the price or numbers offer.
RichFakir's educational estimate of Rajesh Power Services Ltd's fair value is about ₹329 per share, derived from public filings. It's our estimate for research — not a price target or a recommendation to buy or sell.
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