Rectitude Holdings Ltd (RECT) AI Stock Analysis

• Market Cap: N/A
• Dividend Yield: N/A
• Average Volume (3M): 20.60K
• Price to Earnings (P/E): 40.5
• Beta (1Y): 0.19
• Revenue Growth: 6.70%
• EPS Growth: -30.54%
• Country: US
• Employees: 107
• Sector: General
• Sector Strength: N/A
• Industry: Industrial - Distribution
• EPS (TTM): 0.10
• Shares Outstanding: 14,500,000
• 10 Day Avg. Volume: 9,444
• 30 Day Avg. Volume: 20,599
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: 1.56
• Enterprise Value/Gross Profit: 4.75
• Enterprise Value/Ebitda: 16.86
• 1Y Price Target: $3.50
• Price Target Upside: -2.51% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 52 Neutral
• Price Target: $3.50 ▼(-2.51% Downside)

Rectitude Holdings Ltd faces significant challenges, primarily due to its weak technical indicators and high valuation. Despite strong revenue growth and an improved balance sheet, the company's declining profitability and cash flow issues are concerning. The stock's oversold condition and bearish trend further weigh on its attractiveness.

Rectitude Holdings Ltd Business Overview & Revenue Model

Company Description

Rectitude Holdings Ltd. offers a comprehensive range of safety equipment, including personal protective clothing, safety gloves, step platform ladders, safety footwear, travel restraint and personal fall arrest equipment, portable fire extinguishers, firefighting equipment, fire-related safety products, traffic products, and industrial hardware tools. The company markets its products under various brands such as D&D, SkyHawk, Super Sun, STRIKERS, Osprey, HORNET, and DADE. ​

How the Company Makes Money

Rectitude Holdings generates revenue through multiple streams, primarily from equity investments in its portfolio companies, which provide dividends and capital gains as these businesses grow and succeed. Additionally, RECT earns income through strategic partnerships and joint ventures that leverage synergies in technology and real estate development. The company may also engage in consultancy services for businesses seeking to navigate investment opportunities in their respective sectors. Factors contributing to its earnings include market demand for technology solutions, growth in the real estate sector, and increasing investments in renewable energy initiatives.

Rectitude Holdings Ltd Financial Statement Overview

Summary

Rectitude Holdings Ltd shows strong revenue growth and a healthier balance sheet with reduced leverage. However, declining profitability margins and significant cash flow challenges pose risks to financial stability. The company needs to address operational inefficiencies and improve cash flow management to sustain growth and profitability.

Income Statement

Rectitude Holdings Ltd has demonstrated strong revenue growth with a 41.07% increase in the latest year, indicating robust demand and market expansion. However, the net profit margin has decreased to 5.11% from 8.11% the previous year, suggesting increased costs or pricing pressures. The gross profit margin remains healthy at 33.65%, but the decline in EBIT and EBITDA margins indicates potential operational inefficiencies.

Balance Sheet

The company's debt-to-equity ratio has improved significantly to 0.35 from 1.12, reflecting a stronger equity position and reduced leverage risk. However, the return on equity has dropped to 9.04% from 41.84%, indicating reduced profitability relative to shareholder equity. The equity ratio of 56.67% suggests a stable financial structure with a good proportion of assets financed by equity.

Cash Flow

Rectitude Holdings Ltd faces challenges in cash flow management, with a significant decline in free cash flow growth rate to -208.96%, indicating negative cash generation. The operating cash flow to net income ratio is low at 0.016, highlighting potential issues in converting income into cash. The negative free cash flow to net income ratio further underscores cash flow constraints.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	37.87M	43.80M	41.35M	20.61M	29.81M
Gross Profit	12.44M	14.74M	14.71M	6.12M	8.74M
EBITDA	3.51M	4.56M	5.88M	5.32M	3.04M
Net Income	1.75M	2.24M	3.36M	2.15M	2.08M
Balance Sheet
Total Assets	42.28M	43.69M	34.21M	16.24M	25.25M
Cash, Cash Equivalents and Short-Term Investments	3.97M	6.65M	3.47M	1.38M	1.14M
Total Debt	10.04M	8.69M	8.94M	4.03M	7.53M
Total Liabilities	18.96M	18.92M	19.62M	9.88M	15.80M
Stockholders Equity	23.32M	24.77M	8.02M	6.35M	9.45M
Cash Flow
Free Cash Flow	-1.41M	-415.68K	3.96M	1.99M	1.13M
Operating Cash Flow	-1.07M	200.13K	4.20M	2.00M	1.32M
Investing Cash Flow	-7.35M	-5.80M	-230.35K	―	-188.66K
Financing Cash Flow	9.21M	8.77M	-2.93M	-1.28M	-1.00M

Rectitude Holdings Ltd Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 3.59
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RECT, the sentiment is Negative. The current price of 3.59 is below the 20-day moving average (MA) of 3.93, below the 50-day MA of 4.39, and below the 200-day MA of 4.82, indicating a bearish trend. The MACD of -0.25 indicates Positive momentum. The RSI at 38.19 is Neutral, neither overbought nor oversold. The STOCH value of 31.46 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RECT.

Rectitude Holdings Ltd Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DXPE	80 Outperform	1.91B	23.30	18.50%	―	13.93%	48.25%
GIC	79 Outperform	1.41B	21.40	21.69%	2.81%	-1.58%	-5.62%
EVI	66 Neutral	404.30M	64.71	5.23%	―	10.26%	29.40%
DSGR	62 Neutral	1.34B	345.70	0.66%	―	13.48%	―
RECT	52 Neutral	―	40.47	11.45%	―	6.70%	-30.54%
TITN	48 Neutral	398.98M	-6.32	-10.04%	―	-8.12%	-204.81%
Sector *	55 Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%