Dredging Corporation of India Limited

Industrials — Engineering & Construction · NSE

₹891.00−₹9.90 (−1.10%)

DalalBaazaar Score

39 / 100

🔴 Weak

Verdict

CAUTION

Risk

Very High

Driven by moderate debt load, short-term liabilities exceed short-term assets, negative free cash flow.

In simple words: The business is earning a fairly low return on the money invested in it, with both sales and profits growing well. Cash generation is currently 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 Dredging Corporation of India Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Dredging Corporation of India Limited provides dredging services to various ports, the Indian navy, fishing harbors, and other maritime organizations in India.

IndustryEngineering & Construction

SectorIndustrials

Employees216

Annual revenue₹1,155 Cr

How does it make money?

Turns over ₹1,155 Cr a year. Of every ₹100 of sales, about ₹0 reaches shareholders as profit, with ₹17 left at the operating level before interest, tax and depreciation. Each of its 216 employees supports ₹5.35 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹5.35 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?Little sign of one

Returns on capital of 2.1% 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 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 -0% while net margin moved -102% 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-0%

Margin effect-102%

DalalBaazaar Score

39/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 0.1% a year

Quality vs. Valuation

Company Quality

35/ 100

Weak

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

Valuation

48/ 100

Fair

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

50.6x

2Y Median

80.1x

28 monthly readings · mean 89.1x · range 45.2x–208.8x

Sector Median

30.1x

median of 3 sector peers

🟢Current valuation is approximately 37% below its 2y median of 80.1x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

⚠️Against its sector it trades 68% above the peer median of 30.1x.

vs. its own history

Cheap

80.1x median over 28 months · -37%

vs. sector peers

Expensive

30.1x median of 3 peers · +68%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

17.1x

PEG

—

What's Good / What's Bad

🟢 What's Going Well3

Margins are improving
EBITDA margin is up from -1.7% to 17.4% over 3 years.
Return on equity is rising
ROE has improved from -16.0% to 0.4%.
Return on capital is rising
ROCE has improved from -12.8% to 2.1%.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

5 items require attention · 3 high · 2 watch

🔴Debt has risen sharplyFinancial
Total debt is up 185% over 3 years, from ₹381 Cr to ₹1,087 Cr.
🔴Thin interest coverageFinancial
Operating profit covers interest only 1.2x — little room if earnings dip.
🔴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.
🟡Inventory building faster than salesFinancial
Inventory up 30% against revenue up -0% — stock may not be moving.
🟡Short-term liquidity is tightFinancial
Current ratio of 0.89 — near-term obligations exceed near-term assets.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from -1.7% to 17.4%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 37% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.

🔴 Bear CaseWhat could go wrong?

The debt load needs earnings to hold up
Debt is 5.4x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
A premium to the sector to defend
It trades 68% above the peer median. That premium needs a reason that persists, or it closes.
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
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

1EBITDA margin holds above 15%✓ 17.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 5.4x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Free cash flow remains positive✗ -₹228 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✗ 1.2x
How much operating profit can fall before interest stops being comfortably covered.
5ROCE stays above 8%✗ 2.1%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

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

3 good · 4 neutral · 4 weak

Market Cap

₹2,495 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

50.6x

Expensive

Expensive — verify against sector peers

P/B Ratio

2.01x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹17.62

Profitable

Profitable on a per-share basis

ROE

3.2%

Weak

Weak capital efficiency

ROCE

2.1%

Weak

Low return on total capital employed

Debt/Equity

0.89x

Moderate

Moderate leverage

Revenue Growth (YoY)

46.7%

Healthy

Healthy top-line growth

Profit Growth (YoY)

117.3%

Healthy

Profits growing at a healthy clip

Dividend Yield

None

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

Free Cash Flow

-₹228 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

5.7%

Average

Average margins

Net Margin

3.0%

Weak

Very little revenue reaches the bottom line

Current Ratio

0.89

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.76

Defensive

Steadier than the market

52W Range Position

43%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

936.2 / 1023.6

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

30.2

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1,158 Cr	₹943 Cr	₹1,126 Cr	₹1,155 Cr	-0.1%
EBITDA	-₹20 Cr	₹200 Cr	₹141 Cr	₹201 Cr	—
EBITDA Margin	-1.7%	21.3%	12.5%	17.4%	—
PAT (Net Profit)	-₹196 Cr	₹33 Cr	-₹27 Cr	₹5 Cr	—
EPS	₹-70.07	₹11.38	₹-12.07	₹5.28	—
ROE	-16.0%	2.6%	-2.2%	0.4%	—
ROCE	-12.8%	3.7%	0.4%	2.1%	—
Total Debt	₹381 Cr	₹558 Cr	₹923 Cr	₹1,087 Cr	+41.9%
Free Cash Flow	-₹27 Cr	-₹100 Cr	-₹367 Cr	-₹228 Cr	—

🟡 Revenue has been broadly flat over 3 years (-0.1% a year).

🟢 EBITDA has turned positive, from -₹20 Cr to ₹201 Cr.

🟢 EBITDA Margin has risen from -1.7% to 17.4% over 3 years (+19.0 pts).

🟢 PAT (Net Profit) has turned positive, from -₹196 Cr to ₹5 Cr.

🟢 EPS has turned positive, from ₹-70.07 to ₹5.28.

🟢 ROE has risen from -16.0% to 0.4% over 3 years (+16.3 pts).

🟢 ROCE has risen from -12.8% to 2.1% over 3 years (+14.8 pts).

🔴 Total Debt has grown at 41.9% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹3,066 Cr

Total Liabilities

₹1,835 Cr

Cash & Equivalents

₹143 Cr

Operating Cash Flow

₹142 Cr

Capex

-₹371 Cr

Shareholding (proxy)

Institutional Holding

7.2%

Insider Holding

73.5%

Corporate Actions

Ex-Dividend Date

31 Jul 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

1 positive2 mixed3 general

Dredging Corporation Of India Ltd. Share Price Up 9.85%

Univest, 14 AugPrice 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.

Dredging Corporation swings to profit, revenue jumps 47%; stock trades lower

Moneycontrol.com, 05 AugResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Dredging Corporation zooms 33% in 2 days; what's driving stock price?

Business Standard, 20 May

Dredging Corporation Of India Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 30 Aug

Dredging Corp shares surge over 30% in two sessions; Check its guidance for FY27

CNBC TV18, 20 MayPrice 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.

Dredging Corporation of India closes trading window for Q1FY27

scanx.trade, 23 Jun

Watch Items

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

DalalBaazaar Thesis

MiddlingBusiness Quality · Profitability · Valuation

WeakFinancial Health · Growth · 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. 3 high-severity red flags sit above this conclusion and should be read first.

4 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Free cash flow remains positive; Interest cover stays above 3x; ROCE stays above 8% · see Key things to watch ↑