Hindustan Construction Company Limited

Industrials — Engineering & Construction · NSE

₹19.49−₹0.14 (−0.71%)

DalalBaazaar Score

45 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Low

Driven by small-cap size, which brings sharper price swings, falling profits.

In simple words: The business is earning a fairly low return on the money invested in it, but sales are shrinking. The direction of profits is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:07 pm

Caution warranted. Multiple fundamental metrics — flagged in red below — point to either valuation stretch, leverage risk, or weakening profitability. This doesn't mean avoid the stock outright, but it does mean the burden of proof is on the growth story to justify the current price.

Understanding the Business

Company site ↗

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

What does this company do?

Hindustan Construction Company Limited provides engineering and construction services in India and internationally.

IndustryEngineering & Construction

SectorIndustrials

Employees3,458

Annual revenue₹3,664 Cr

How does it make money?

Turns over ₹3,664 Cr a year. Of every ₹100 of sales, about ₹5 reaches shareholders as profit, with ₹19 left at the operating level before interest, tax and depreciation. Each of its 3,458 employees supports ₹1.06 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin18.6%

Net margin4.5%

Revenue / employee₹1.06 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.

LARSEN & TOUBRO LTD.P/E 30.1x · ROE 15.2%

ADANI PORT & SEZ LTDP/E 29.9x · ROE 14.1%

SIEMENS LTDP/E 88.8x · ROE 10.5%

What is its competitive advantage?Some evidence

ROCE of 16.0% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

ROCE16.0%

ROE7.8%

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 -53% while net margin moved -1352% 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-53%

Margin effect-1352%

DalalBaazaar Score

45/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 22.0% a year
✗ Profit fell 30.4% in the latest year

Quality vs. Valuation

Company Quality

43/ 100

Weak

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

Valuation

59/ 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

27.1x

2Y Median

26.0x

28 monthly readings · mean 25.9x · range 9.3x–49.2x

Sector Median

30.1x

median of 3 sector peers

🟡Currently trading close to its 2y median of 26.0x — the market is paying about what it usually pays for this company.

🟡Against its sector it is priced broadly in line with the peer median of 30.1x.

vs. its own history

Fair

26.0x median over 28 months · +4%

vs. sector peers

Fair

30.1x median of 3 peers · -10%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

27.1x

P/B

2.40x

EV/EBITDA

8.4x

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 3.9% to 18.6% over 3 years.
Debt is being paid down
Total debt is down 82% over 3 years.
Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
Return on capital is rising
ROCE has improved from 13.5% to 16.0%.

🔴 What Needs Attention0

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

Red Flags

2 items require attention · 1 high · 1 watch

🔴Thin interest coverageFinancial
Operating profit covers interest only 1.5x — little room if earnings dip.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 40% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 3.9% to 18.6%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Deleveraging frees up earnings
Debt is down 82% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹811 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.

🔴 Bear CaseWhat could go wrong?

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
Small 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

1EBITDA margin holds above 17%✓ 18.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Interest cover stays above 3x✗ 1.5x
How much operating profit can fall before interest stops being comfortably covered.
3Free cash flow remains positive✓ ₹811 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.5x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 13%✓ 16.0%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

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

4 good · 4 neutral · 3 weak

Market Cap

₹5,105 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

27.1x

Fair

Fairly valued against the generic band

P/B Ratio

2.40x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹0.72

Profitable

Profitable on a per-share basis

ROE

7.8%

Weak

Weak capital efficiency

ROCE

16.0%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.48x

Low

Conservative leverage

Revenue Growth (YoY)

-9.0%

Shrinking

Sales are contracting

Profit Growth (YoY)

-30.4%

Falling

Profits are shrinking

Dividend Yield

None

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

Free Cash Flow

₹811 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹19.49

P/E (Forward)

28.7x

Flat

At or above the trailing multiple — no earnings uplift is being priced in

Operating Margin

9.9%

Average

Average margins

Net Margin

4.3%

Average

Average bottom-line conversion

Current Ratio

1.15

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.70

Defensive

Steadier than the market

52W Range Position

37%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

20.4 / 21.4

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

32.8

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹7,715 Cr	₹6,628 Cr	₹5,405 Cr	₹3,664 Cr	-22.0%
EBITDA	₹299 Cr	₹447 Cr	₹703 Cr	₹682 Cr	+31.6%
EBITDA Margin	3.9%	6.7%	13.0%	18.6%	—
PAT (Net Profit)	-₹28 Cr	₹478 Cr	₹113 Cr	₹166 Cr	—
EPS	₹-0.16	₹2.55	₹0.58	₹0.75	—
ROE	—	—	12.4%	7.8%	—
ROCE	13.5%	48.3%	33.1%	16.0%	—
Total Debt	₹5,512 Cr	₹2,223 Cr	₹1,679 Cr	₹1,019 Cr	-43.0%
Free Cash Flow	-₹198 Cr	₹72 Cr	₹116 Cr	₹811 Cr	—

🔴 Revenue has shrunk at 22.0% a year over 3 years.

🟢 EBITDA has grown at 31.6% a year over 3 years.

🟢 EBITDA Margin has risen from 3.9% to 18.6% over 3 years (+14.7 pts).

🟢 PAT (Net Profit) has turned positive, from -₹28 Cr to ₹166 Cr.

🟢 EPS has turned positive, from ₹-0.16 to ₹0.75.

🔴 ROE has fallen from 12.4% to 7.8% over 3 years (-4.7 pts).

🟢 ROCE has risen from 13.5% to 16.0% over 3 years (+2.5 pts).

🟢 Total Debt has shrunk at 43.0% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹198 Cr to ₹811 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹8,492 Cr

Total Liabilities

₹6,365 Cr

Total Debt

₹1,019 Cr

Cash & Equivalents

₹381 Cr

Operating Cash Flow

₹892 Cr

Capex

-₹81 Cr

Shareholding (proxy)

Institutional Holding

6.4%

Insider Holding

20.9%

Corporate Actions

Ex-Dividend Date

30 May 2011

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 positive3 mixed2 general

HCC Share Price - Live NSE: HCC Stock Price & Chart

Upstox, 16 Oct

HCC Share Price rises 5.94%: price action and valuation

Univest, 24 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.

Hindustan Construction's (NSE:HCC) Earnings Offer More Than Meets The Eye

Simply Wall Street, 22 MayResults

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

HCC Forecast — Price Target — Prediction for 2027

TradingView, 25 JunAnalyst view

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

Where are HCC shares headed in 2027?

Livemint, 28 Jul

Rs 12,976 Crore Order Book: Multibagger Small-Cap Infrastructure Stock Reports Stable Q1 FY27 Profit of Rs 51 Crore

Dalal Street Investment Journal, 06 AugOrder 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 (-9.0%) 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

🟡Business QualityAdequate11.8/20

🟢Financial HealthStrong13.7/20

🔴GrowthWeak2.4/20

🔴ProfitabilityWeak4.5/15

🟡ValuationFair8.1/15

🟡RiskModerate4.9/10

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. 1 high-severity red flag sits above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above 17%18.6%
✗Interest cover stays above 3x1.5x
✓Free cash flow remains positive₹811 Cr
✓Debt / EBITDA stays below 2x1.5x
✓ROCE stays above 13%16.0%