IL&FS Engineering and Construction Company Limited

Industrials — Engineering & Construction · BSE

₹40.30−₹0.05 (−0.12%)

DalalBaazaar Score

21 / 100

🔴 Weak

Verdict

HIGH RISK

Risk

Very High

Driven by negative shareholders' equity — the company owes more than it owns, short-term liabilities exceed short-term assets, negative free cash flow.

In simple words: The company owes more than it owns — years of losses have wiped out its net worth, but sales are shrinking. Solvency — whether it can keep funding itself at all — is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:09 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 IL&FS Engineering and 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?

IL&FS Engineering and Construction Company Limited, together with its subsidiaries, engages in the construction and infrastructure development, and project management businesses in India.

IndustryEngineering & Construction

SectorIndustrials

Employees194

Annual revenue₹174 Cr

How does it make money?

Turns over ₹174 Cr a year. Of every ₹100 of sales, about ₹1 reaches shareholders as profit, with ₹24 left at the operating level before interest, tax and depreciation. Each of its 194 employees supports ₹89.9 lakh of revenue a year, the signature of a people-led business.

EBITDA margin24.5%

Net margin0.8%

Revenue / employee₹89.9 lakh

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 has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +2% while net margin moved -101% 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+2%

Margin effect-101%

DalalBaazaar Score

21/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Shareholders' equity is negative — accumulated losses exceed the capital in the business

Quality vs. Valuation

Company Quality

21/ 100

Weak

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

Valuation

30/ 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

49.8x

Sector Median

30.1x

median of 3 sector peers

⚠️Against its sector it trades 65% above the peer median of 30.1x.

vs. its own history

Not enough price and earnings history

vs. sector peers

Expensive

30.1x median of 3 peers · +65%

vs. generic bands

N/A

Multiples unreliable — equity base is negative

P/E (Trailing)

49.8x

P/B

—

EV/EBITDA

74.6x

PEG

1.34

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well1

Margins are improving
EBITDA margin is up from -19.7% to 24.5% over 3 years.

🔴 What Needs Attention4

Free cash flow is negative
The business is not currently covering its capital spending from operations.
Inventory building faster than sales
Inventory is up 100% against revenue growth of 2% — stock may not be moving.
Negative shareholders' equity
Liabilities exceed assets — this is a solvency question that sits above every other consideration here.
Short-term liquidity is tight
Current ratio of 0.14 — near-term obligations exceed near-term assets.

Red Flags

6 items require attention · 5 high · 1 watch

🔴Negative shareholders' equityFinancial
Liabilities exceed assets — accumulated losses have wiped out the company's net worth.
🔴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.
🔴Inventory building faster than salesFinancial
Inventory up 100% against revenue up 2% — stock may not be moving.
🟡Short-term liquidity is tightFinancial
Current ratio of 0.14 — 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 -19.7% to 24.5%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.

🔴 Bear CaseWhat could go wrong?

Solvency comes before everything else
Liabilities exceed assets. Until net worth is rebuilt, the equity is a claim on a business that owes more than it owns, and further losses or a funding squeeze can leave shareholders with nothing.
The debt load needs earnings to hold up
Debt is 62.7x 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 65% above the peer median. That premium needs a reason that persists, or it closes.
Growth barely outpaces inflation
Revenue compounding at 0.6% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
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.

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

1EBITDA margin holds above 22%✓ 24.5%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 62.7x
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✗ -₹114 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✗ 1.7x
How much operating profit can fall before interest stops being comfortably covered.
5Revenue growth stays above 4% a year✗ 0.6% CAGR
Latest reported year was -70.8%. The bar is set below the established compounding rate, so ordinary variation does not trip it.

Investment Checklist

3 / 9 checks passed

✗ Shareholders' equity is positive (assets exceed liabilities)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✗ 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 · 4 neutral · 5 weak

Market Cap

₹528 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

49.8x

Expensive

Expensive — verify against sector peers

P/B Ratio

Not available

No data

Source didn't return this field

EPS (TTM)

₹0.81

Profitable

Profitable on a per-share basis

ROE

Not meaningful

Negative equity

Return on equity can't be read when equity itself is negative

ROCE

Not available

No data

Source didn't return this field

Debt/Equity

Not meaningful

Negative equity

Shareholders' equity is negative, so this ratio can't be read

Revenue Growth (YoY)

-70.8%

Shrinking

Sales are contracting

Profit Growth (YoY)

37.2%

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

-₹66 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹40.3

ROA

-0.9%

Weak

Assets generate little profit

Operating Margin

68.7%

Good

Healthy core-business profitability

Net Margin

0.7%

Weak

Very little revenue reaches the bottom line

Current Ratio

0.14

Tight

Tight short-term liquidity

Beta (vs Nifty)

-0.06

Defensive

Steadier than the market

52W Range Position

82%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

39.9 / 38.2

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

51.0

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹171 Cr	₹256 Cr	₹320 Cr	₹174 Cr	+0.6%
EBITDA	-₹34 Cr	₹38 Cr	₹17 Cr	₹43 Cr	—
EBITDA Margin	-19.7%	14.9%	5.4%	24.5%	—
PAT (Net Profit)	-₹124 Cr	-₹77 Cr	-₹5 Cr	₹1 Cr	—
EPS	₹-9.46	₹-5.91	₹-0.37	₹0.1	—
Total Debt	₹2,632 Cr	₹2,631 Cr	₹2,672 Cr	₹2,672 Cr	+0.5%
Free Cash Flow	₹8 Cr	-₹73 Cr	-₹49 Cr	-₹114 Cr	—

🟡 Revenue has been broadly flat over 3 years (0.6% a year).

🟢 EBITDA has turned positive, from -₹34 Cr to ₹43 Cr.

🟢 EBITDA Margin has risen from -19.7% to 24.5% over 3 years (+44.2 pts).

🟢 PAT (Net Profit) has turned positive, from -₹124 Cr to ₹1 Cr.

🟢 EPS has turned positive, from ₹-9.46 to ₹0.1.

🟡 Total Debt has been broadly flat over 3 years (0.5% a year).

🔴 Free Cash Flow has turned negative, from ₹8 Cr to -₹114 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1,629 Cr

Total Liabilities

₹4,819 Cr

Total Debt

₹2,672 Cr

Cash & Equivalents

₹20 Cr

Operating Cash Flow

-₹112 Cr

Capex

-₹2 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

80.8%

Corporate Actions

Ex-Dividend Date

19 Sept 2008

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

6 general

IL&FS Engineering and Construction (IL&FSENGG.NS) Ticks Higher: Shares Trade Near ₹39.5, Up 2.01% - Reversal Setup Alerts

www.siam.in, 14 Oct

IL&FS Engineering & Construction Company Ltd. Share Price Live Today

CNBC TV18, 09 Oct

IL&FS Engineering and Construction Company Lower Circuit Today

Univest, 08 Oct

IL&FSENGG Share/Stock Price Live, NSE

TechGraph, 08 Oct

IL&FS Engineering and Construction Company Ltd. Peer Comparison – Compare with Others

Value Research, 04 Sept

IL&FS ENGINEERING AND CONSTRUC Share Price

Upstox, 05 May

Watch Items

Revenue growth is negative (-70.8%) 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.
2 metrics couldn't be retrieved for this stock — this is more common for smaller or thinly-covered listings.

DalalBaazaar Thesis

🔴Business QualityWeak6/20

🔴Financial HealthStretched1/20

🔴GrowthWeak7.6/20

🔴ProfitabilityWeak1.5/15

🔴ValuationDemanding4.5/15

🔴RiskHigh0.5/10

Avoid until solvency is resolved

IL&FS Engineering and Construction Company Limited owes more than it owns. Whatever the operating numbers show, the equity is a residual claim on a business with negative net worth, and that question has to be settled before any of the rest is worth weighing. 5 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above 22%24.5%
✗Debt / EBITDA falls below 3x62.7x
✗Free cash flow remains positive-₹114 Cr
✗Interest cover stays above 3x1.7x
✗Revenue growth stays above 4% a year0.6% CAGR