Deepak Builders & Engineers India Limited

Industrials — Engineering & Construction · NSE

₹6.49+₹0.12 (+1.88%)

DalalBaazaar Score

54 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

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

In simple words: Reasonable but unspectacular business quality, but sales are shrinking. 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

Company site ↗

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

What does this company do?

Deepak Builders & Engineers India Limited operates as an integrated engineering and construction company in India.

IndustryEngineering & Construction

SectorIndustrials

Employees496

Annual revenue₹554 Cr

How does it make money?

Turns over ₹554 Cr a year. Of every ₹100 of sales, about ₹7 reaches shareholders as profit, with ₹15 left at the operating level before interest, tax and depreciation. Each of its 496 employees supports ₹1.12 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin14.7%

Net margin7.2%

Revenue / employee₹1.12 Cr

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 11.2% 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.

ROCE11.2%

ROE8.9%

Peer median ROE14.1%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +28% while net margin moved +45% 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+28%

Margin effect+45%

DalalBaazaar Score

54/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

53/ 100

Average

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

Valuation

81/ 100

Cheap

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

11.0x

2Y Median

9.5x

26 monthly readings · mean 9.2x · range 3.8x–14.9x

Sector Median

30.1x

median of 3 sector peers

⚠️Current valuation is approximately 16% above its 2y median of 9.5x. 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 63% below the peer median of 30.1x.

vs. its own history

Fair

9.5x median over 26 months · +16%

vs. sector peers

Cheap

30.1x median of 3 peers · -63%

vs. generic bands

Cheap

Below 15x

P/E (Trailing)

11.0x

P/B

0.68x

EV/EBITDA

5.9x

PEG

0.48

Dividend Yield

1.54%

What's Good / What's Bad

🟢 What's Going Well2

Margins are improving
EBITDA margin is up from 11.1% to 14.7% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention4

Debt is rising
Total debt is up 84% 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 21.3% to 8.9% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 17.6% to 11.2% — often a sign of competition or overexpansion.

Red Flags

2 items require attention · 2 high

🔴Debt has risen sharplyFinancial
Total debt is up 84% over 3 years, from ₹97 Cr to ₹178 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.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 11.1% to 14.7%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Cheaper than its peers
It trades 63% 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?

Returns on shareholder capital are falling
ROE has dropped from 21.3% to 8.9%. 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.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
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
2 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

1EBITDA margin holds above 13%✓ 14.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA stays below 2x✗ 2.2x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
3Free cash flow remains positive✗ -₹26 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✓ 3.6x
How much operating profit can fall before interest stops being comfortably covered.
5Revenue growth stays above 6% a year✓ 8.5% CAGR
Latest reported year was -15.7%. The bar is set below the established compounding rate, so ordinary variation does not trip it.

Investment Checklist

4 / 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 · 4 neutral · 3 weak

Market Cap

₹302 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

11.0x

Cheap

Cheap against the generic band

P/B Ratio

0.68x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹0.59

Profitable

Profitable on a per-share basis

ROE

8.9%

Moderate

Moderate capital efficiency

ROCE

11.2%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.40x

Low

Conservative leverage

Revenue Growth (YoY)

-15.7%

Shrinking

Sales are contracting

Profit Growth (YoY)

-98.1%

Falling

Profits are shrinking

Dividend Yield

1.54%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

-₹26 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹6.49

Operating Margin

11.4%

Average

Average margins

Net Margin

5.1%

Average

Average bottom-line conversion

Current Ratio

2.50

Comfortable

Healthy short-term liquidity

52W Range Position

12%

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

6.6 / 6.7

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

41.6

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹433 Cr	₹511 Cr	₹582 Cr	₹554 Cr	+8.5%
EBITDA	₹48 Cr	₹111 Cr	₹111 Cr	₹81 Cr	+19.1%
EBITDA Margin	11.1%	21.8%	19.1%	14.7%	—
PAT (Net Profit)	₹21 Cr	₹60 Cr	₹57 Cr	₹40 Cr	+22.8%
EPS	₹0.46	₹1.3	₹1.4	₹0.85	+22.8%
ROE	21.3%	37.7%	13.7%	8.9%	—
ROCE	17.6%	31.5%	17.2%	11.2%	—
Total Debt	₹97 Cr	₹157 Cr	₹135 Cr	₹178 Cr	+22.5%
Free Cash Flow	-₹1 Cr	-₹40 Cr	-₹143 Cr	-₹26 Cr	—

🟢 Revenue has grown at 8.5% a year over 3 years.

🟢 EBITDA has grown at 19.1% a year over 3 years.

🟢 EBITDA Margin has risen from 11.1% to 14.7% over 3 years (+3.6 pts).

🟢 PAT (Net Profit) has grown at 22.8% a year over 3 years.

🟢 EPS has grown at 22.8% a year over 3 years.

🔴 ROE has fallen from 21.3% to 8.9% over 3 years (-12.4 pts).

🔴 ROCE has fallen from 17.6% to 11.2% over 3 years (-6.4 pts).

🔴 Total Debt has grown at 22.5% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹987 Cr

Total Liabilities

₹540 Cr

Total Debt

₹178 Cr

Cash & Equivalents

₹3 Cr

Operating Cash Flow

-₹22 Cr

Capex

-₹3 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

27.9%

Corporate Actions

Dividend Rate

₹0.1

Ex-Dividend Date

19 Sept 2025

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

1 positive1 mixed4 general

Deepak Builders & Engineers India (NSEI:DBEIL) - Stock Analysis

Simply Wall Street, 14 Oct

Deepak Builders & Engineers India (DBEIL.NS) Ticks Up 2.14%: Shares Trade at ₹6.68 - Motive Wave

https://www.siam.in/, 30 Sept

Deepak Builders & Engineers India Ltd Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 30 Aug

Deepak Builders credits shares after split to Re 1 face value

scanx.trade, 17 Jun

Deepak Builders and Engineers India Share Price Target 2026: Rs 105 Analyst Forecast

Univest, 18 JunAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Deepak Builders' board approves 1:10 stock split

The Economic Times, 28 AprCapital return

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

Watch Items

Revenue growth is negative (-15.7%) on the latest reported period — check if this is one-off or a trend.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🟡Business QualityAdequate9/20

🟡Financial HealthAdequate11.8/20

🟢GrowthStrong13.3/20

🔴ProfitabilityWeak5.8/15

🟢ValuationAttractive11.8/15

🔴RiskHigh2.5/10

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. 2 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above 13%14.7%
✗Debt / EBITDA stays below 2x2.2x
✗Free cash flow remains positive-₹26 Cr
✓Interest cover stays above 3x3.6x
✓Revenue growth stays above 6% a year8.5% CAGR