About Roots Multiclean Unlisted Shares
Roots Multiclean Limited (RML), established in 1992, is India’s pioneering manufacturer of mechanized cleaning equipment. With its initial product, the basic “Flipper” push sweeper, the company has since evolved into a key player in the cleaning equipment industry, offering a diverse range of advanced cleaning machines. Over the years, Roots Multiclean has built a strong reputation for producing high-quality, efficient, and reliable cleaning solutions for a variety of industries. RML’s products are widely used in public spaces, streets, industrial facilities, airports, and more.
The company operates with a strong commitment to innovation and has continuously advanced its product offerings to meet the demands of an ever-changing market. Roots Multiclean’s presence spans across 34 countries, with a customer base of over 30,000 active clients. The company is headquartered in India and offers comprehensive sales and service support across the globe, positioning it as a leader in mechanized cleaning solutions.
Business Divisions and Product Range
Roots Multiclean’s product portfolio is diverse, catering to a wide range of industries and cleaning applications. Here are the key business divisions and products that RML manufactures:
- Floor Scrubbers
Roots Multiclean’s floor scrubbers are designed for efficient cleaning of large floor areas, ensuring spotless surfaces. These machines are used in commercial, industrial, and healthcare environments, offering ease of use and excellent cleaning results.
- High-Pressure Washers
The high-pressure washers manufactured by RML are ideal for removing dirt, grime, and stubborn stains from surfaces. These washers are used in industries like automotive, manufacturing, and hospitality, where cleanliness is a priority.
- Industrial Vacuum Cleaners
RML’s industrial vacuum cleaners are specifically designed to handle large-scale cleaning tasks in industrial and commercial environments. These machines can effectively clean heavy dust, debris, and other contaminants.
- Carpet Cleaning Machines
These specialized machines cater to the cleaning needs of carpets in both residential and commercial spaces. They offer powerful suction and brushing action for deep cleaning of carpets and upholstery.
- Steam Cleaners
Roots Multiclean’s steam cleaners are versatile tools for cleaning a variety of surfaces, from tiles and glass to carpets and kitchens. These cleaners utilize high-temperature steam to remove dirt and germs without the need for harsh chemicals.
- City Sweepers and Runway Sweepers
RML offers city sweepers and runway sweepers, which are used for street cleaning and runway maintenance, respectively. These machines are crucial for maintaining cleanliness in public spaces and airports.
Weaknesses and Challenges
Despite its growth and success, Roots Multiclean faces certain challenges that investors should be mindful of:
- Dependence on Industrial Sectors
RML’s business is heavily reliant on the industrial, pharmaceutical, and automotive sectors. Economic slowdowns or disruptions in these sectors could impact the demand for its cleaning machines.
- High Operating Costs
Although Roots Multiclean has a strong market position, its operating costs, particularly in areas such as employee benefit expenses and raw material costs, are substantial. In 2023, employee benefit expenses amounted to ₹70 crores, which was an increase from ₹55 crores in 2022. These rising costs could put pressure on profit margins in the future.
- Inventory Management
In 2023, inventory levels rose to ₹124 crores, up from ₹103 crores in 2022. This increase in inventory could point to potential inefficiencies in stock management or slower product turnover, which may lead to higher holding costs.
- Borrowing Levels
Although the company’s borrowings are relatively manageable, they have increased slightly in recent years. Borrowings stood at ₹63 crores in 2023 compared to ₹53 crores in 2022. As borrowings rise, interest expenses can weigh on profitability.
- Market Competition
The cleaning equipment industry is competitive, with several global players offering similar products. Roots Multiclean must continue to innovate and maintain high-quality standards to stay ahead of competitors in the market.
Financial Highlights of Roots Multiclean Unlisted Shares
Roots Multiclean’s financial performance has shown consistent growth in recent years. The following are some key financial highlights:
- Revenue Growth
Roots Multiclean has demonstrated impressive revenue growth, with revenue increasing from ₹269.36 crores in 2021 to ₹320 crores in 2022, and further rising to ₹392 crores in 2023. This growth is indicative of the company’s expanding market reach and demand for its cleaning solutions.
- Improvement in Profit Margins
The company’s gross margins improved significantly in 2023, reaching 50.26%, up from 45% in 2022 and 63.59% in 2021. This positive margin trend suggests that Roots Multiclean is effectively managing its cost of materials and operational efficiency, despite increasing raw material costs.
- EBITDA Growth
Roots Multiclean reported an EBITDA of ₹64 crores in 2023, an increase from ₹48 crores in 2022 and ₹39.97 crores in 2021. The EBITDA margin of 16.33% in 2023 shows that the company is generating strong operational earnings relative to its revenue.
- Profit After Tax (PAT)
The company’s PAT saw a healthy increase in 2023, reaching ₹36 crores, up from ₹26 crores in 2022. This consistent rise in profit highlights Roots Multiclean’s ability to manage costs and improve efficiency across its operations.
- Earnings Per Share (EPS)
The EPS of Roots Multiclean also showed significant growth, increasing from ₹105.45 in 2021 to ₹130 in 2022 and further to ₹180 in 2023. This increase in EPS demonstrates the company’s strong ability to generate shareholder value, making Roots Multiclean Unlisted Shares an attractive investment for long-term investors.
