Garuda Construction and Engineering Limited

Industrials — Engineering & Construction · NSE

₹165.50+₹0.70 (+0.42%)

DalalBaazaar Score

65 / 100

🟢 Good

Verdict

REASONABLE

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, with both sales and profits growing well. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:01 pm

Understanding the Business

Company site ↗

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

What does this company do?

Garuda Construction and Engineering Limited offers civil construction services in India. It constructs residential, commercial, residential-cum-commercial, industrial, infrastructure, and hospitality projects.

IndustryEngineering & Construction

SectorIndustrials

Employees97

Annual revenue₹531 Cr

How does it make money?

Turns over ₹531 Cr a year. Of every ₹100 of sales, about ₹23 reaches shareholders as profit, with ₹32 left at the operating level before interest, tax and depreciation. Each of its 97 employees supports ₹5.47 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹5.47 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?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 36.4%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 27.0% against a peer median of 14.1% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

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 +232% while net margin moved -10% 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+232%

Margin effect-10%

DalalBaazaar Score

65/ 100

Good

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 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

68/ 100

Good

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 good business currently available at an undemanding price — the combination this framework is built to look for.

Historical Valuation

Current P/E

11.3x

2Y Median

29.0x

26 monthly readings · mean 27.5x · range 12.6x–47.5x

Sector Median

30.1x

median of 3 sector peers

🟢Current valuation is approximately 61% below its 2y median of 29.0x. 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 62% below the peer median of 30.1x.

vs. its own history

Cheap

29.0x median over 26 months · -61%

vs. sector peers

Cheap

30.1x median of 3 peers · -62%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

9.2x

PEG

0.26

What's Good / What's Bad

🟢 What's Going Well2

High return on capital employed
ROCE of 36.4% is the mark of a business that converts capital into profit efficiently.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 49.4% to 27.0% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 60.1% to 36.4% — often a sign of competition or overexpansion.

Red Flags

4 items require attention · 3 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 6140% over 3 years, from ₹0 Cr to ₹12 Cr.
🔴High leverageFinancial
Debt/Equity of 2.65x — earnings must service borrowings before shareholders see anything.
🔴Free cash flow negative for 3 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🟡Margins are compressingFinancial
EBITDA margin is down 3.3 points over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 36.4% 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.
Priced below its own history
The stock trades 61% 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.
Cheaper than its peers
It trades 62% 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 35.0% to 31.7%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Leverage amplifies any setback
Debt/Equity of 2.65x. Interest is payable whether or not the business has a good year.
Returns on shareholder capital are falling
ROE has dropped from 49.4% to 27.0%. 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.

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

1Revenue growth stays above 37% a year✓ 49.2% CAGR
Latest reported year was 40.1%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 30%✓ 31.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹36 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 33%✓ 36.4%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

8 / 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

6 good · 3 neutral · 2 weak

Market Cap

₹1,540 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

11.3x

Cheap

Cheap against the generic band

P/B Ratio

3.38x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹14.63

Profitable

Profitable on a per-share basis

ROE

27.0%

Strong

Strong capital efficiency

ROCE

36.4%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

2.65x

High

High leverage

Revenue Growth (YoY)

40.1%

Healthy

Healthy top-line growth

Profit Growth (YoY)

48.5%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.02%

Modest

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

Free Cash Flow

-₹36 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

32.0%

Good

Healthy core-business profitability

Net Margin

23.4%

Good

Strong bottom-line conversion

Current Ratio

2.61

Comfortable

Healthy short-term liquidity

52W Range Position

30%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

172.7 / 177.6

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

31.9

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹160 Cr	₹154 Cr	₹226 Cr	₹531 Cr	+49.2%
EBITDA	₹56 Cr	₹51 Cr	₹67 Cr	₹168 Cr	+44.4%
EBITDA Margin	35.0%	32.9%	29.8%	31.7%	—
PAT (Net Profit)	₹41 Cr	₹36 Cr	₹50 Cr	₹122 Cr	+44.3%
EPS	₹4.38	₹3.92	₹5.99	₹13.17	+44.3%
ROE	49.4%	30.6%	15.0%	27.0%	—
ROCE	60.1%	41.7%	20.1%	36.4%	—
Total Debt	₹0 Cr	₹0 Cr	₹0 Cr	₹12 Cr	+296.6%
Free Cash Flow	₹12 Cr	-₹7 Cr	-₹121 Cr	-₹36 Cr	—

🟢 Revenue has grown at 49.2% a year over 3 years.

🟢 EBITDA has grown at 44.4% a year over 3 years.

🔴 EBITDA Margin has fallen from 35.0% to 31.7% over 3 years (-3.3 pts).

🟢 PAT (Net Profit) has grown at 44.3% a year over 3 years.

🟢 EPS has grown at 44.3% a year over 3 years.

🔴 ROE has fallen from 49.4% to 27.0% over 3 years (-22.4 pts).

🔴 ROCE has fallen from 60.1% to 36.4% over 3 years (-23.6 pts).

🔴 Total Debt has grown at 296.6% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹12 Cr to -₹36 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹644 Cr

Total Liabilities

₹190 Cr

Cash & Equivalents

₹8 Cr

Operating Cash Flow

₹78 Cr

Capex

-₹115 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

79.1%

Corporate Actions

Dividend Rate

₹0.03

Ex-Dividend Date

23 Oct 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

2 positive1 mixed3 general

Garuda Construction declares ₹0.03 per share interim dividend for FY26

scanx.trade, 15 OctCapital return

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

Garuda Construction and Engineering Ltd is Rated Hold

MarketsMojo, 16 Oct

Do Garuda Construction and Engineering's (NSE:GARUDA) Earnings Warrant Your Attention?

Simply Wall Street, 24 JunResults

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

Garuda Construction and Engineering shares jump 11% as Q1 net profit rises 48%

Moneycontrol.com, 10 AugResults

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

Garuda Construction and Engineering vs Nifty 50: Returns Compared

Univest, 24 Sept

Garuda Construction and Engineering Limited (GARUDA.NS) Edges Higher as Stock Nears Resistance Zone - Triple MA Cross

siam.in, 28 Sept

Watch Items

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

DalalBaazaar Thesis

StrongBusiness Quality · Growth · Profitability · Valuation

MiddlingFinancial Health

WeakRisk

Points for each in the Score ↑

Attractive on both counts

A good business currently available at an undemanding price — the combination this framework exists to look for. The work left is qualitative: whether the advantage the numbers imply is one you can identify and expect to last. 3 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 ↑