Divyashakti Limited

Industrials — Building Products & Equipment · BSE

₹66.60−₹0.75 (−1.11%)

DalalBaazaar Score

35 / 100

🔴 Weak

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: The business is earning a fairly low return on the money invested in it, but sales are shrinking. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:45 pm

Understanding the Business

Company site ↗

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

What does this company do?

Divyashakti Limited engages in the manufacture and export of granite products in India and internationally. The company offers polished quartz and granite slabs, tiles, and monuments; and natural stone and quartz products; and engineered stone slabs and related goods/services.

IndustryBuilding Products & Equipment

SectorIndustrials

Employees107

Annual revenue₹35 Cr

How does it make money?

Turns over ₹35 Cr a year. Of every ₹100 of sales, about ₹3 reaches shareholders as profit, with ₹11 left at the operating level before interest, tax and depreciation. Each of its 107 employees supports ₹32.5 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹32.5 lakh

Who are its competitors?

The closest listed comparisons in its industry are LARSEN & TOUBRO LTD., SIEMENS LTD, ABB INDIA LIMITED. 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?Little sign of one

Returns on capital of 0.8% 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.

Peer median ROE15.2%

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved -54% while net margin moved -71% 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-54%

Margin effect-71%

DalalBaazaar Score

35/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 22.8% a year
✗ Profit has declined at 48.8% a year
✗ Latest-year revenue growth of -46.3% is below the longer-term trend — momentum is fading
✗ Profit fell 77.2% in the latest year

Quality vs. Valuation

Company Quality

33/ 100

Weak

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

Valuation

32/ 100

Expensive

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

Weak on business quality and not cheap enough to compensate.

Historical Valuation

Current P/E

214.8x

3Y Median

22.4x

40 monthly readings · mean 24.8x · range 9.1x–67.1x

Sector Median

88.8x

median of 3 sector peers

⚠️Current valuation is approximately 858% above its 3y median of 22.4x. 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 142% above the peer median of 88.8x.

vs. its own history

Expensive

22.4x median over 40 months · +858%

vs. sector peers

Expensive

88.8x median of 3 peers · +142%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

19.5x

PEG

—

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 6.3% to 0.5% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 8.7% to 0.8% — 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 1842% over 3 years, from ₹0 Cr to ₹5 Cr.
🔴High leverageFinancial
Debt/Equity of 2.69x — earnings must service borrowings before shareholders see anything.
🔴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.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 7.1 points, from 18.0% to 10.9%.
🔴Receivables growing faster than salesFinancial
Receivables up 21% against revenue up -54% — sales are being booked faster than they are collected.
🟡Profit is decliningFinancial
Net profit is down 87% over 3 years.

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?

Margins are being competed away
EBITDA margin has fallen from 18.0% to 10.9%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Leverage amplifies any setback
Debt/Equity of 2.69x. Interest is payable whether or not the business has a good year.
Sales are being booked faster than collected
Receivables are up 21% against revenue up -54%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
The price already assumes success
The stock trades 858% 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.
Returns on shareholder capital are falling
ROE has dropped from 6.3% to 0.5%. 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.

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

1EBITDA margin holds above 9%✓ 10.9%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹3 Cr
Profit that never becomes cash eventually stops being profit.
3Debt / EBITDA stays below 2x✓ 1.4x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4ROCE stays above 8%✗ 0.8%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Valuation vs its own median of 22.4x✗ 214.8x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

3 / 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

2 good · 2 neutral · 7 weak

Market Cap

₹68 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

214.8x

Expensive

Expensive — verify against sector peers

P/B Ratio

0.36x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹0.31

Profitable

Profitable on a per-share basis

ROE

0.5%

Weak

Weak capital efficiency

ROCE

0.8%

Weak

Low return on total capital employed

Debt/Equity

2.69x

High

High leverage

Revenue Growth (YoY)

-46.3%

Shrinking

Sales are contracting

Profit Growth (YoY)

-77.2%

Falling

Profits are shrinking

Dividend Yield

1.50%

Modest

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

Free Cash Flow

-₹3 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

0.8%

Weak

Thin margins leave little room for error

Net Margin

1.1%

Weak

Very little revenue reaches the bottom line

Current Ratio

8.47

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.04

Defensive

Steadier than the market

52W Range Position

53%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

65.4 / 60.4

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

56.4

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹76 Cr	₹70 Cr	₹64 Cr	₹35 Cr	-22.8%
EBITDA	₹14 Cr	₹6 Cr	₹6 Cr	₹4 Cr	-34.7%
EBITDA Margin	18.0%	8.3%	9.3%	10.9%	—
PAT (Net Profit)	₹8 Cr	₹2 Cr	₹3 Cr	₹1 Cr	-48.8%
EPS	₹7.62	₹2.26	₹2.47	₹1.02	-48.8%
ROE	6.3%	1.9%	1.3%	0.5%	—
ROCE	8.7%	2.6%	1.8%	0.8%	—
Total Debt	₹0 Cr	₹4 Cr	₹2 Cr	₹5 Cr	+168.8%
Free Cash Flow	-₹10 Cr	-₹2 Cr	-₹4 Cr	-₹3 Cr	—

🔴 Revenue has shrunk at 22.8% a year over 3 years.

🔴 EBITDA has shrunk at 34.7% a year over 3 years.

🔴 EBITDA Margin has fallen from 18.0% to 10.9% over 3 years (-7.1 pts).

🔴 PAT (Net Profit) has shrunk at 48.8% a year over 3 years.

🔴 EPS has shrunk at 48.8% a year over 3 years.

🔴 ROE has fallen from 6.3% to 0.5% over 3 years (-5.8 pts).

🔴 ROCE has fallen from 8.7% to 0.8% over 3 years (-8.0 pts).

🔴 Total Debt has grown at 168.8% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹214 Cr

Total Liabilities

₹17 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹3 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

82.9%

Corporate Actions

Dividend Rate

₹1

Ex-Dividend Date

21 Sept 2026

Peer Comparison

Company	P/E	ROE
LARSEN & TOUBRO LTD.	30.1x	15.2%
SIEMENS LTD	88.8x	10.5%
ABB INDIA LIMITED	92.6x	19.1%

Recent News

1 positive5 general

Divyashakti cuts production from Sep 29 amid tariff and cost pressures

scanx.trade, 17 Oct

Divyashakti Ltd Trims Production Amid Rising Costs and US Tariff Hikes

Whalesbook, 17 Oct

Divyashakti Ltd. Key Financial Ratios – Valuation, Profitability & More

Value Research, 02 Sept

Compare with DIVYASHAKTI GRAN

Equitymaster, 16 Oct

Divyashakti Ltd Upgraded to Sell: Technical Improvements Amid Weak Fundamentals

MarketsMojo, 16 OctAnalyst view

🟢Potentially positiveAn analyst opinion changing, which moves the price without changing the business.

Divyashakti Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 11 Sept

Watch Items

Revenue growth is negative (-46.3%) 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

MiddlingFinancial Health

WeakBusiness Quality · Growth · Profitability · Valuation · Risk

Points for each in the Score ↑

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation. 5 high-severity red flags sit above this conclusion and should be read first.

3 of 5 tripwires tripped — Free cash flow remains positive; ROCE stays above 8%; Valuation vs its own median of 22.4x · see Key things to watch ↑