Gensol Engineering Limited

Technology — Solar · BSE

₹10.45+₹0.49 (+4.92%)

DalalBaazaar Score

58 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

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, 6:08 pm

Mixed / neutral. No major red flags jump out, but nothing here screams "obviously cheap" either. This is a name that needs a peer comparison and a view on near-term earnings triggers before sizing a position.

Understanding the Business

Company site ↗

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

What does this company do?

Gensol Engineering Limited engages in the provision of renewable energy solutions in India, the Middle East, and internationally. It operates through EPC, Lease, EV Manufacturing, and Others segments.

IndustrySolar

SectorTechnology

Employees500

Annual revenue₹834 Cr

How does it make money?

Turns over ₹834 Cr a year. Of every ₹100 of sales, about ₹7 reaches shareholders as profit, with ₹31 left at the operating level before interest, tax and depreciation. Each of its 500 employees supports ₹1.67 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin31.3%

Net margin7.1%

Revenue / employee₹1.67 Cr

Who are its competitors?

The closest listed comparisons in its industry are TATA CONSULTANCY SERV LT, INFOSYS LIMITED, HCL TECHNOLOGIES LTD, WIPRO LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

TATA CONSULTANCY SERV LTP/E 17.3x · ROE 45.6%

INFOSYS LIMITEDP/E 15.8x · ROE 32.0%

HCL TECHNOLOGIES LTDP/E 20.4x · ROE 24.6%

WIPRO LTDP/E 14.5x · ROE 15.9%

What is its competitive advantage?Little sign of one

Returns on capital of 12.2% 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.

ROCE12.2%

ROE18.3%

Peer median ROE32.0%

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 2 years revenue moved +436% while net margin moved +0% 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+436%

Margin effect+0%

DalalBaazaar Score

58/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Debt/Equity of 2.28x is high — earnings must service borrowings before shareholders see anything
• Current ratio of 1.36 covers short-term liabilities, without much slack
✗ Free cash flow is negative — growth is being funded by borrowing or fresh equity
✗ Interest cover of only 1.7x — little room if profits dip
✗ Debt has grown 287.3% a year — worth checking what it bought

Quality vs. Valuation

Company Quality

55/ 100

Average

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

Valuation

88/ 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

0.8x

4Y Median

52.5x

52 monthly readings · mean 67.8x · range 0.7x–185.6x

Sector Median

16.5x

median of 4 sector peers

🟢Current valuation is approximately 99% below its 4y median of 52.5x. 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 95% below the peer median of 16.5x.

vs. its own history

Cheap

52.5x median over 52 months · -99%

vs. sector peers

Cheap

16.5x median of 4 peers · -95%

vs. generic bands

Cheap

Below 15x

P/E (Trailing)

0.8x

P/B

0.07x

EV/EBITDA

5.1x

PEG

0.01

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well2

Margins are improving
EBITDA margin is up from 11.3% to 31.3% over 2 years.
Valuation below its historical average
At 0.8x the stock trades 99% below its own median of 52.5x.

🔴 What Needs Attention4

Debt is rising
Total debt is up 1400% over 2 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 24.2% to 18.3% — each rupee of shareholder capital earns less than it did.
Receivables growing faster than sales
Receivables are up 730% against revenue growth of 436% — customers are taking longer to pay.

Red Flags

6 items require attention · 6 high

🔴Debt has risen sharplyFinancial
Total debt is up 1400% over 2 years, from ₹101 Cr to ₹1,510 Cr.
🔴High leverageFinancial
Debt/Equity of 2.28x — earnings must service borrowings before shareholders see anything.
🔴Thin interest coverageFinancial
Operating profit covers interest only 1.7x — little room if earnings dip.
🔴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.
🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🔴Receivables growing faster than salesFinancial
Receivables up 730% against revenue up 436% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 11.3% to 31.3%. 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 99% 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 95% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.

🔴 Bear CaseWhat could go wrong?

The debt load needs earnings to hold up
Debt is 5.8x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Sales are being booked faster than collected
Receivables are up 730% against revenue up 436%. 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 24.2% to 18.3%. 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.
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 99% a year✓ 131.5% CAGR
Latest reported year was 56.4%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 29%✓ 31.3%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA falls below 3x✗ 5.8x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
4Free cash flow remains positive✗ -₹577 Cr
Profit that never becomes cash eventually stops being profit.
5Interest cover stays above 3x✗ 1.7x
How much operating profit can fall before interest stops being comfortably covered.

Investment Checklist

6 / 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

₹40 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

0.8x

Cheap

Cheap against the generic band

P/B Ratio

0.07x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹13.37

Profitable

Profitable on a per-share basis

ROE

18.3%

Strong

Strong capital efficiency

ROCE

12.2%

Moderate

Moderate return on the capital in the business

Debt/Equity

2.28x

High

High leverage

Revenue Growth (YoY)

56.4%

Healthy

Healthy top-line growth

Profit Growth (YoY)

27.8%

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

-₹577 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹10.45

Operating Margin

16.0%

Good

Healthy core-business profitability

Net Margin

6.8%

Average

Average bottom-line conversion

Current Ratio

1.36

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

-0.28

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

13.5 / 15.9

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

11.9

Oversold zone

Financial Trend (3-Year)

Metric	FY22	FY23	FY24	2Y CAGR
Revenue	₹156 Cr	₹357 Cr	₹834 Cr	+131.5%
EBITDA	₹18 Cr	₹82 Cr	₹261 Cr	+286.0%
EBITDA Margin	11.3%	23.0%	31.3%	—
PAT (Net Profit)	₹11 Cr	₹23 Cr	₹60 Cr	+131.7%
EPS	₹3.38	₹6.49	₹15.8	+116.2%
ROE	24.2%	11.3%	18.3%	—
ROCE	11.3%	6.4%	12.2%	—
Total Debt	₹101 Cr	₹598 Cr	₹1,510 Cr	+287.3%
Free Cash Flow	-₹101 Cr	-₹167 Cr	-₹577 Cr	—

🟢 Revenue has grown at 131.5% a year over 2 years.

🟢 EBITDA has grown at 286.0% a year over 2 years.

🟢 EBITDA Margin has risen from 11.3% to 31.3% over 2 years (+20.1 pts).

🟢 PAT (Net Profit) has grown at 131.7% a year over 2 years.

🟢 EPS has grown at 116.2% a year over 2 years.

🔴 ROE has fallen from 24.2% to 18.3% over 2 years (-6.0 pts).

🟡 ROCE has held roughly flat at 12.2% over 2 years.

🔴 Total Debt has grown at 287.3% a year over 2 years.

Balance Sheet & Cash Flow — FY2024

Total Assets

₹2,328 Cr

Total Liabilities

₹2,015 Cr

Total Debt

₹1,510 Cr

Cash & Equivalents

₹218 Cr

Operating Cash Flow

-₹98 Cr

Capex

-₹478 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

51.2%

Peer Comparison

Company	P/E	ROE
TATA CONSULTANCY SERV LT	17.3x	45.6%
INFOSYS LIMITED	15.8x	32.0%
HCL TECHNOLOGIES LTD	20.4x	24.6%
WIPRO LTD	14.5x	15.9%

Recent News

6 general

Gensol Engineering Crash: 95% Fall & Governance Lessons

HDFC Sky, 24 Aug

Are Rajesh Exports shares a new Gensol Engineering in the making in the Indian stock market?

Livemint, 06 Jun

Gensol Engineering pledgee sells remaining 2.50% stake, encumbrance hits zero

scanx.trade, 14 Oct

Gensol Engineering Ltd. Key Financial Ratios – Valuation, Profitability & More

Value Research, 30 Aug

Gensol Engineering Ltd Locks at Upper Circuit With 4.92% Gain — Buyers Queue, Sellers Absent

MarketsMojo, 16 Oct

Gensol Engineering Stock Prediction 2026: Expert Analysis, Forecast Scenarios and Full Stock Review

Univest, 11 Jun

Watch Items

Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
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

🟡Business QualityAdequate11.8/20

🔴Financial HealthStretched6/20

🟢GrowthStrong14.9/20

🟡ProfitabilityModerate8.4/15

🟢ValuationAttractive13.2/15

🔴RiskHigh3.7/10

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

This thesis breaks if

✓Revenue growth stays above 99% a year131.5% CAGR
✓EBITDA margin holds above 29%31.3%
✗Debt / EBITDA falls below 3x5.8x
✗Free cash flow remains positive-₹577 Cr
✗Interest cover stays above 3x1.7x