Chavda Infra Limited

Sector n/a · NSE

₹155.90−₹1.40 (−0.89%)

DalalBaazaar Score

48 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

Driven by negative free cash flow, micro-cap size, which brings thin liquidity, falling profits.

In simple words: The business is earning a fairly low return on the money invested in it, though profits are falling even as sales grow. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:07 pm

Caution warranted. Multiple fundamental metrics — flagged in red below — point to either valuation stretch, leverage risk, or weakening profitability. This doesn't mean avoid the stock outright, but it does mean the burden of proof is on the growth story to justify the current price.

Understanding the Business

The 60-second version of Chavda Infra Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

How does it make money?

Turns over ₹320 Cr a year. Of every ₹100 of sales, about ₹5 reaches shareholders as profit, with ₹18 left at the operating level before interest, tax and depreciation.

EBITDA margin17.8%

Net margin5.3%

What is its competitive advantage?Some evidence

ROCE of 15.1% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

ROCE15.1%

ROE7.7%

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +98% while net margin moved -29% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+98%

Margin effect-29%

DalalBaazaar Score

48/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

51/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

35/ 100

Expensive

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

vs. its own history

Not enough price and earnings history

vs. sector peers

Not enough peers with a usable P/E

vs. generic bands

No P/E available

P/E (Trailing)

—

P/B

—

EV/EBITDA

20.2x

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well1

Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention5

Debt is rising
Total debt is up 161% over 3 years — worth checking what it funded.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Return on equity is falling
ROE has dropped from 39.6% to 7.7% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 35.7% to 15.1% — often a sign of competition or overexpansion.
Receivables growing faster than sales
Receivables are up 236% against revenue growth of 98% — customers are taking longer to pay.

Red Flags

4 items require attention · 3 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 161% over 3 years, from ₹53 Cr to ₹139 Cr.
🔴Free cash flow negative for 4 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴Receivables growing faster than salesFinancial
Receivables up 236% against revenue up 98% — sales are being booked faster than they are collected.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 32% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Sales are being booked faster than collected
Receivables are up 236% against revenue up 98%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Returns on shareholder capital are falling
ROE has dropped from 39.6% to 7.7%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.
Several serious flags at once
3 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 19% a year✓ 25.5% CAGR
Latest reported year was 22.7%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 16%✓ 17.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA stays below 2x✗ 2.4x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4Free cash flow remains positive✗ -₹32 Cr
Profit that never becomes cash eventually stops being profit.
5Interest cover stays above 3x✗ 2.5x
How much operating profit can fall before interest stops being comfortably covered.

Investment Checklist

4 / 9 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✗ Profit growing year-over-year
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

2 good · 6 neutral · 3 weak

Market Cap

₹1,018 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

Not available

No data

Source didn't return this field

P/B Ratio

Not available

No data

Source didn't return this field

EPS (TTM)

Not available

No data

Source didn't return this field

ROE

7.7%

Weak

Weak capital efficiency

ROCE

15.1%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.63x

Moderate

Moderate leverage

Revenue Growth (YoY)

22.7%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-19.4%

Falling

Profits are shrinking

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹32 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹155.9

Gross Margin

29.3%

Proxy

Operating margin unavailable — showing gross margin instead

Net Margin

5.3%

Average

Average bottom-line conversion

Current Ratio

1.66

Comfortable

Healthy short-term liquidity

Technical Snapshot

SMA 20 / SMA 50

60.4 / 99.3

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

8.7

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹162 Cr	₹240 Cr	₹261 Cr	₹320 Cr	+25.5%
EBITDA	₹27 Cr	₹42 Cr	₹57 Cr	₹57 Cr	+27.5%
EBITDA Margin	17.0%	17.4%	21.9%	17.8%	—
PAT (Net Profit)	₹12 Cr	₹19 Cr	₹21 Cr	₹17 Cr	+12.2%
EPS	₹4.89	₹8.72	₹8.56	—	—
ROE	39.6%	20.3%	18.8%	7.7%	—
ROCE	35.7%	28.9%	26.0%	15.1%	—
Total Debt	₹53 Cr	₹87 Cr	₹162 Cr	₹139 Cr	+37.7%
Free Cash Flow	-₹1 Cr	-₹69 Cr	-₹59 Cr	-₹32 Cr	—

🟢 Revenue has grown at 25.5% a year over 3 years.

🟢 EBITDA has grown at 27.5% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 17.8% over 3 years.

🟢 PAT (Net Profit) has grown at 12.2% a year over 3 years.

🔴 ROE has fallen from 39.6% to 7.7% over 3 years (-31.9 pts).

🔴 ROCE has fallen from 35.7% to 15.1% over 3 years (-20.6 pts).

🔴 Total Debt has grown at 37.7% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹500 Cr

Total Liabilities

₹280 Cr

Total Debt

₹139 Cr

Cash & Equivalents

₹5 Cr

Operating Cash Flow

-₹8 Cr

Capex

-₹24 Cr

Recent News

2 positive1 mixed3 general

Chavda Infra Lower Circuit Streak: Day 2 Price and Data

Univest, 15 Oct

Here's Why We Think Chavda Infra (NSE:CHAVDA) Is Well Worth Watching

Simply Wall Street, 03 Sept

Infra stock declares 1:1 bonus shares, raising of share capital. Details here

Livemint, 06 Aug

Infra Stock in Focus After Board Approves 1:1 Bonus Issue and Share Capital Hike By Trade Brains

Investing.com India, 06 AugCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

This smallcap infra stock announces 1:1 bonus issue, stock sees profit booking

Moneycontrol.com, 06 AugCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Chavda Infra Ltd. Share Price rises 20%: valuation, sector

Univest, 24 SeptPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
Sector/industry classification unavailable — verify manually for peer comparison.
3 metrics couldn't be retrieved for this stock — this is more common for smaller or thinly-covered listings.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

🟡Business QualityAdequate10.3/20

🟡Financial HealthAdequate9.2/20

🟡GrowthModest12.9/20

🔴ProfitabilityWeak5.8/15

🟡ValuationFair7.5/15

🔴RiskHigh2.4/10

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 3 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓Revenue growth stays above 19% a year25.5% CAGR
✓EBITDA margin holds above 16%17.8%
✗Debt / EBITDA stays below 2x2.4x
✗Free cash flow remains positive-₹32 Cr
✗Interest cover stays above 3x2.5x