Denta Water and Infra Solutions Limited

Industrials — Engineering & Construction · NSE

₹257.40−₹2.40 (−0.92%)

DalalBaazaar Score

58 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Very High

Driven by high debt relative to equity, negative free cash flow, micro-cap size, which brings thin liquidity.

In simple words: Strong business and financial position, but sales are shrinking. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:00 pm

Understanding the Business

Company site ↗

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

What does this company do?

Denta Water and Infra Solutions Limited, a water and infrastructure solution company, engages in the design, installation, and commissioning of water management infrastructure projects in India.

IndustryEngineering & Construction

SectorIndustrials

Employees82

Annual revenue₹250 Cr

How does it make money?

Turns over ₹250 Cr a year. Of every ₹100 of sales, about ₹24 reaches shareholders as profit, with ₹32 left at the operating level before interest, tax and depreciation. Each of its 82 employees supports ₹3.05 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹3.05 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.

Compared side by side in Peers ↓

What is its competitive advantage?Some evidence

ROCE of 18.0% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

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 +44% while net margin moved -15% 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+44%

Margin effect-15%

DalalBaazaar Score

58/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ High leverage magnifies any downturn in earnings
✓ Profits have been consistent from year to year
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

56/ 100

Average

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

Valuation

69/ 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

12.8x

2Y Median

12.7x

23 monthly readings · mean 12.6x · range 8.7x–17.1x

Sector Median

30.1x

median of 3 sector peers

🟡Currently trading close to its 2y median of 12.7x — the market is paying about what it usually pays for this company.

🟢Against its sector it trades 57% below the peer median of 30.1x.

vs. its own history

Fair

12.7x median over 23 months · +1%

vs. sector peers

Cheap

30.1x median of 3 peers · -57%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

8.3x

PEG

1.91

What's Good / What's Bad

🟢 What's Going Well1

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

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 47.9% to 13.3% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 64.2% to 18.0% — often a sign of competition or overexpansion.

Red Flags

6 items require attention · 5 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 950% over 3 years, from ₹1 Cr to ₹12 Cr.
🔴High leverageFinancial
Debt/Equity of 2.64x — earnings must service borrowings before shareholders see anything.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 6.9 points, from 39.3% to 32.4%.
🔴Receivables growing faster than salesFinancial
Receivables up 120% against revenue up 44% — sales are being booked faster than they are collected.
🔴Inventory building faster than salesFinancial
Inventory up 1728% against revenue up 44% — stock may not be moving.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹35 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 18.0% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Cheaper than its peers
It trades 57% 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?

Margins are being competed away
EBITDA margin has fallen from 39.3% to 32.4%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Leverage amplifies any setback
Debt/Equity of 2.64x. Interest is payable whether or not the business has a good year.
Sales are being booked faster than collected
Receivables are up 120% against revenue up 44%. 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 47.9% to 13.3%. 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.

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

1Revenue growth stays above 10% a year✓ 12.8% CAGR
Latest reported year was -12.8%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 30%✓ 32.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹35 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.1x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 15%✓ 18.0%
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 · 3 neutral · 4 weak

Market Cap

₹687 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

12.8x

Cheap

Cheap against the generic band

P/B Ratio

1.50x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹20.04

Profitable

Profitable on a per-share basis

ROE

13.3%

Moderate

Moderate capital efficiency

ROCE

18.0%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

2.64x

High

High leverage

Revenue Growth (YoY)

-12.8%

Shrinking

Sales are contracting

Profit Growth (YoY)

-39.9%

Falling

Profits are shrinking

Dividend Yield

0.97%

Modest

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

Free Cash Flow

-₹35 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

8.4x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

22.2%

Good

Healthy core-business profitability

Net Margin

22.1%

Good

Strong bottom-line conversion

Current Ratio

15.89

Comfortable

Healthy short-term liquidity

52W Range Position

16%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

265.4 / 281.2

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

27.7

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹174 Cr	₹239 Cr	₹203 Cr	₹250 Cr	+12.8%
EBITDA	₹68 Cr	₹82 Cr	₹72 Cr	₹81 Cr	+5.8%
EBITDA Margin	39.3%	34.5%	35.7%	32.4%	—
PAT (Net Profit)	₹50 Cr	₹60 Cr	₹53 Cr	₹61 Cr	+6.7%
EPS	₹18.77	₹22.65	₹25.83	₹22.81	+6.7%
ROE	47.9%	36.8%	12.9%	13.3%	—
ROCE	64.2%	49.5%	17.6%	18.0%	—
Total Debt	₹1 Cr	₹1 Cr	₹1 Cr	₹12 Cr	+119.0%
Free Cash Flow	₹37 Cr	₹26 Cr	-₹72 Cr	-₹35 Cr	—

🟢 Revenue has grown at 12.8% a year over 3 years.

🟢 EBITDA has grown at 5.8% a year over 3 years.

🔴 EBITDA Margin has fallen from 39.3% to 32.4% over 3 years (-6.9 pts).

🟢 PAT (Net Profit) has grown at 6.7% a year over 3 years.

🟢 EPS has grown at 6.7% a year over 3 years.

🔴 ROE has fallen from 47.9% to 13.3% over 3 years (-34.7 pts).

🔴 ROCE has fallen from 64.2% to 18.0% over 3 years (-46.2 pts).

🔴 Total Debt has grown at 119.0% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹37 Cr to -₹35 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹484 Cr

Total Liabilities

₹25 Cr

Cash & Equivalents

₹27 Cr

Operating Cash Flow

-₹34 Cr

Capex

-₹1 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

71.9%

Corporate Actions

Dividend Rate

₹2.5

Ex-Dividend Date

16 Sept 2026

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 positive4 mixed1 general

Denta Water and Infra Solutions' (NSE:DENTA) Solid Earnings May Rest On Weak Foundations

Simply Wall Street, 01 JunResults

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

Denta Water & Infra Solutions Ltd Forms Death Cross, Signalling Bearish Trend Ahead

MarketsMojo, 15 OctAnalyst view

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

Why Is Denta Water and Infra Solutions Share Price Falling Key Reasons 2026

Univest, 22 JunPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Denta Water and Infra Solutions (NSE:DENTA): What Does Its Q2 FY27 Reg 74(5) Certificate Mean?

Kalkine India, 12 OctResults

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

Denta Water And Infra Solutions Ltd Peer Comparison – Compare with Others

Value Research, 30 Aug

Denta Water Bags New Orders Worth ₹67.56 Crore; Shares Rise Nearly 2%

HDFC Sky, 21 JulOrder win

🟢Potentially positiveOrder wins add to future revenue, though the effect depends on the contract's size against annual sales and on when it is executed.

Watch Items

Revenue growth is negative (-12.8%) 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.
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

StrongBusiness Quality · Valuation

MiddlingFinancial Health · Profitability

WeakGrowth · Risk

Points for each in the Score ↑

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

1 of 5 tripwires tripped — Free cash flow remains positive · see Key things to watch ↑