Conart Engineers Limited

Industrials — Engineering & Construction · BSE

₹87.90+₹5.71 (+6.95%)

DalalBaazaar Score

65 / 100

🟢 Good

Verdict

REASONABLE

Risk

Moderate

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

In simple words: Reasonable but unspectacular business quality, 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, 6:02 pm

Mixed / neutral. No major red flags jump out, but nothing here screams "obviously cheap" either. This is a name that needs a peer comparison and a view on near-term earnings triggers before sizing a position.

Understanding the Business

Company site ↗

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

What does this company do?

Conart Engineers Limited provides construction services in India.

IndustryEngineering & Construction

SectorIndustrials

Employees66

Annual revenue₹62 Cr

How does it make money?

Turns over ₹62 Cr a year. Of every ₹100 of sales, about ₹6 reaches shareholders as profit, with ₹8 left at the operating level before interest, tax and depreciation. Each of its 66 employees supports ₹94.3 lakh of revenue a year, the signature of a people-led business.

EBITDA margin7.6%

Net margin6.0%

Revenue / employee₹94.3 lakh

Who are its competitors?

The closest listed comparisons in its industry are LARSEN & TOUBRO LTD., ADANI PORT & SEZ LTD, SIEMENS LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

LARSEN & TOUBRO LTD.P/E 30.1x · ROE 15.2%

ADANI PORT & SEZ LTDP/E 29.9x · ROE 14.1%

SIEMENS LTDP/E 88.8x · ROE 10.5%

What is its competitive advantage?Little sign of one

Returns on capital of 14.3% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

ROCE14.3%

ROE10.6%

Peer median ROE14.1%

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 +75% while net margin moved +8% 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+75%

Margin effect+8%

DalalBaazaar Score

65/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.42 — historically steadier than the index
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

69/ 100

Good

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

Valuation

66/ 100

Fair

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.

Historical Valuation

Current P/E

14.9x

3Y Median

11.4x

40 monthly readings · mean 12.4x · range 7.2x–25.2x

Sector Median

30.1x

median of 3 sector peers

⚠️Current valuation is approximately 30% above its 3y median of 11.4x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

🟢Against its sector it trades 51% below the peer median of 30.1x.

vs. its own history

Expensive

11.4x median over 40 months · +30%

vs. sector peers

Cheap

30.1x median of 3 peers · -51%

vs. generic bands

Cheap

Below 15x

P/E (Trailing)

14.9x

P/B

1.58x

EV/EBITDA

11.0x

PEG

0.63

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well4

Debt is being paid down
Total debt is down 88% over 3 years.
Return on capital is rising
ROCE has improved from 9.9% to 14.3%.
Very low debt
Debt/Equity of 0.02x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Free cash flow is negative
The business is not currently covering its capital spending from operations.
Valuation above its historical average
At 14.9x the stock trades 30% above its own median of 11.4x.

Red Flags

2 items require attention · 1 high · 1 watch

🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹3 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Deleveraging frees up earnings
Debt is down 88% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Cheaper than its peers
It trades 51% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
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?

The price already assumes success
The stock trades 30% above its own median multiple. At this level the business has to deliver just to stand still, and a stumble is repriced twice — lower earnings on a lower multiple.
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.

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

1Revenue growth stays above 15% a year✓ 20.6% CAGR
Latest reported year was 35.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 6%✓ 7.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹3 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.0x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 11%✓ 14.3%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

5 / 11 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
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

4 good · 5 neutral · 2 weak

Market Cap

₹55 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

14.9x

Cheap

Cheap against the generic band

P/B Ratio

1.58x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹5.91

Profitable

Profitable on a per-share basis

ROE

10.6%

Moderate

Moderate capital efficiency

ROCE

14.3%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.02x

Low

Conservative leverage

Revenue Growth (YoY)

35.9%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-1.8%

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

-₹3 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹87.9

Operating Margin

4.7%

Weak

Thin margins leave little room for error

Net Margin

5.5%

Average

Average bottom-line conversion

Current Ratio

4.07

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.42

Defensive

Steadier than the market

52W Range Position

47%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

85.9 / 92.5

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

50.7

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹35 Cr	₹49 Cr	₹57 Cr	₹62 Cr	+20.6%
EBITDA	₹3 Cr	₹4 Cr	₹4 Cr	₹5 Cr	+13.9%
EBITDA Margin	9.0%	8.4%	7.1%	7.6%	—
PAT (Net Profit)	₹2 Cr	₹3 Cr	₹3 Cr	₹4 Cr	+23.6%
EPS	₹3.15	₹9.81	₹8.52	₹5.93	+23.5%
ROE	7.8%	10.6%	8.3%	10.6%	—
ROCE	9.9%	12.1%	—	14.3%	—
Total Debt	₹0 Cr	₹0 Cr	₹0 Cr	₹0 Cr	-51.2%
Free Cash Flow	₹2 Cr	₹1 Cr	₹4 Cr	-₹3 Cr	—

🟢 Revenue has grown at 20.6% a year over 3 years.

🟢 EBITDA has grown at 13.9% a year over 3 years.

🔴 EBITDA Margin has fallen from 9.0% to 7.6% over 3 years (-1.4 pts).

🟢 PAT (Net Profit) has grown at 23.6% a year over 3 years.

🟢 EPS has grown at 23.5% a year over 3 years.

🟢 ROE has risen from 7.8% to 10.6% over 3 years (+2.8 pts).

🟢 ROCE has risen from 9.9% to 14.3% over 3 years (+4.4 pts).

🟢 Total Debt has shrunk at 51.2% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹2 Cr to -₹3 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹43 Cr

Total Liabilities

₹8 Cr

Total Debt

₹0 Cr

Cash & Equivalents

₹3 Cr

Operating Cash Flow

-₹1 Cr

Capex

-₹1 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

63.3%

Corporate Actions

Ex-Dividend Date

20 Nov 2019

Peer Comparison

Company	P/E	ROE
LARSEN & TOUBRO LTD.	30.1x	15.2%
ADANI PORT & SEZ LTD	29.9x	14.1%
SIEMENS LTD	88.8x	10.5%

Recent News

2 positive2 mixed2 general

Conart Engineers Bags Hindalco Order; Shares Rise 9%

HDFC Sky, 12 MayOrder win

🟢Potentially positiveAn order or contract win, which adds to future revenue. How much depends on its size against annual sales and on when it is executed.

Conart Engineers closes trading window from Oct 1 for Q2FY27 results

scanx.trade, 28 SeptResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Conart Engineers Ltd. Peer Comparison – Compare with Others

Value Research, 30 Aug

Conart Engineers Secures Approx ₹49 Crore Work Order from Hindalco Industries for Gujarat Project

scanx.trade, 12 MayOrder win

🟢Potentially positiveAn order or contract win, which adds to future revenue. How much depends on its size against annual sales and on when it is executed.

P. H. Capital reports standalone net loss of Rs 0.29 crore in the June 2026 quarter

Business Standard, 12 AugResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Monarch Surveyors And Engineering Consultants Ltd Peer Comparison – Compare with Others

Value Research, 30 Aug

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🟡Business QualityAdequate10.2/20

🟢Financial HealthStrong15/20

🟢GrowthStrong18.5/20

🟡ProfitabilityModerate8.3/15

🟡ValuationFair8.4/15

🔴RiskHigh4.4/10

Good business at a fair price

A sound business at a reasonable valuation. Suitable for a long-term holding, with the valuation and the direction of margins worth watching rather than the business itself. 1 high-severity red flag sits above this conclusion and should be read first.

This thesis breaks if

✓Revenue growth stays above 15% a year20.6% CAGR
✓EBITDA margin holds above 6%7.6%
✗Free cash flow remains positive-₹3 Cr
✓Debt / EBITDA stays below 2x0.0x
✓ROCE stays above 11%14.3%