Ircon International Limited

Industrials — Engineering & Construction · NSE

₹107.00+₹0.67 (+0.63%)

DalalBaazaar Score

43 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

Driven by moderate debt load, negative free cash flow, small-cap size, which brings sharper price swings.

In simple words: Reasonable but unspectacular business quality, though profits are falling even as sales grow. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:06 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 Ircon International Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Ircon International Limited, together with its subsidiaries, engages in providing engineering and construction services.

IndustryEngineering & Construction

SectorIndustrials

Employees793

Annual revenue₹8,865 Cr

How does it make money?

Turns over ₹8,865 Cr a year. Of every ₹100 of sales, about ₹7 reaches shareholders as profit, with ₹14 left at the operating level before interest, tax and depreciation. Each of its 793 employees supports ₹11.18 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin14.3%

Net margin6.7%

Revenue / employee₹11.18 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?Little sign of one

Returns on capital of 8.2% 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.

ROCE8.2%

ROE9.0%

Peer median ROE14.1%

What is the outlook?

1 analysts covering the stock expect revenue to grow about 14.7% and earnings to grow about 10.0% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+14.7%

Est. earnings growth+10.0%

Analysts1

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 -14% while net margin moved -9% 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-14%

Margin effect-9%

DalalBaazaar Score

43/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 5.0% a year
✗ Profit has declined at 8.0% a year
✗ Profit fell 43.4% in the latest year

Quality vs. Valuation

Company Quality

35/ 100

Weak

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

Valuation

75/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

Optically cheap, but the underlying business scores poorly. Cheap-and-weak is what a value trap looks like from the outside — the low price may be deserved.

Historical Valuation

Current P/E

16.3x

3Y Median

20.7x

40 monthly readings · mean 21.3x · range 14.0x–35.5x

Sector Median

30.1x

median of 3 sector peers

🟢Current valuation is approximately 21% below its 3y median of 20.7x. 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 46% below the peer median of 30.1x.

vs. its own history

Cheap

20.7x median over 40 months · -21%

vs. sector peers

Cheap

30.1x median of 3 peers · -46%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

16.3x

P/B

1.51x

EV/EBITDA

10.8x

PEG

—

Dividend Yield

1.78%

What's Good / What's Bad

🟢 What's Going Well3

Margins are improving
EBITDA margin is up from 12.5% to 14.3% over 3 years.
Valuation below its historical average
At 16.3x the stock trades 21% below its own median of 20.7x.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention5

Debt is rising
Total debt is up 276% over 3 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 14.7% to 9.0% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 14.4% to 8.2% — often a sign of competition or overexpansion.
Receivables growing faster than sales
Receivables are up 62% against revenue growth of -14% — customers are taking longer to pay.

Red Flags

5 items require attention · 3 high · 2 watch

🔴Debt has risen sharplyFinancial
Total debt is up 276% over 3 years, from ₹1,525 Cr to ₹5,731 Cr.
🔴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.
🔴Receivables growing faster than salesFinancial
Receivables up 62% against revenue up -14% — sales are being booked faster than they are collected.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 4.6x to 3.0x.
🟡Profit is decliningFinancial
Net profit is down 22% over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 12.5% to 14.3%. 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 21% 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 46% 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?

The debt load needs earnings to hold up
Debt is 4.5x 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 62% against revenue up -14%. 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 14.7% to 9.0%. 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.
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.
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 12%✓ 14.3%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 4.5x
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✗ -₹1,151 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✗ 3.0x
How much operating profit can fall before interest stops being comfortably covered.
5ROCE stays above 8%✓ 8.2%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

6 / 12 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
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

1 good · 8 neutral · 2 weak

Market Cap

₹10,064 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

16.3x

Fair

Fairly valued against the generic band

P/B Ratio

1.51x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹6.57

Profitable

Profitable on a per-share basis

ROE

9.0%

Moderate

Moderate capital efficiency

ROCE

8.2%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.86x

Moderate

Moderate leverage

Revenue Growth (YoY)

9.5%

Modest

Modest growth

Profit Growth (YoY)

-43.4%

Falling

Profits are shrinking

Dividend Yield

1.78%

Modest

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

Free Cash Flow

-₹1,151 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹107

P/E (Forward)

13.9x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

8.2%

Average

Average margins

Net Margin

5.7%

Average

Average bottom-line conversion

Current Ratio

1.65

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.65

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

107.2 / 115.6

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

50.9

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹10,347 Cr	₹12,301 Cr	₹10,540 Cr	₹8,865 Cr	-5.0%
EBITDA	₹1,295 Cr	₹1,581 Cr	₹1,273 Cr	₹1,267 Cr	-0.7%
EBITDA Margin	12.5%	12.9%	12.1%	14.3%	—
PAT (Net Profit)	₹765 Cr	₹930 Cr	₹727 Cr	₹595 Cr	-8.0%
EPS	₹8.14	₹9.88	₹7.73	₹6.33	-8.0%
ROE	14.7%	16.0%	11.6%	9.0%	—
ROCE	14.4%	14.6%	9.8%	8.2%	—
Total Debt	₹1,525 Cr	₹2,582 Cr	₹4,307 Cr	₹5,731 Cr	+55.5%
Free Cash Flow	-₹378 Cr	-₹927 Cr	-₹2,162 Cr	-₹1,151 Cr	—

🔴 Revenue has shrunk at 5.0% a year over 3 years.

🟡 EBITDA has been broadly flat over 3 years (-0.7% a year).

🟢 EBITDA Margin has risen from 12.5% to 14.3% over 3 years (+1.8 pts).

🔴 PAT (Net Profit) has shrunk at 8.0% a year over 3 years.

🔴 EPS has shrunk at 8.0% a year over 3 years.

🔴 ROE has fallen from 14.7% to 9.0% over 3 years (-5.7 pts).

🔴 ROCE has fallen from 14.4% to 8.2% over 3 years (-6.2 pts).

🔴 Total Debt has grown at 55.5% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹21,307 Cr

Total Liabilities

₹14,636 Cr

Total Debt

₹5,731 Cr

Cash & Equivalents

₹2,120 Cr

Operating Cash Flow

-₹618 Cr

Capex

-₹533 Cr

Shareholding (proxy)

Institutional Holding

3.4%

Insider Holding

65.2%

Corporate Actions

Dividend Rate

₹1.9

Ex-Dividend Date

17 Sept 2026

Analyst Consensus

Recommendations

0 Buy · 1 Hold · 0 Sell

Target Price (Mean)

₹136

+27.1% vs CMP

Target Range

₹136 – ₹136

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 positive3 mixed1 general

Why Ircon International Share Price is Rising

Equitymaster, 13 Oct

IRCON International stock zooms 6% on ₹862 crore order win from railways

Business Standard, 13 OctOrder 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.

Ircon International shares jump 7% on Rs 862 crore railway EPC contract win

The Economic Times, 13 OctPrice 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.

Ircon International Shares Rise After Winning Rs 862 Crore EPC Contract From East Central Railway

NDTV Profit, 13 OctPrice 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.

Ircon International bags EPC work order worth ₹862 crore from East Central Railway; shares fall 41% YTD

Upstox, 12 OctOrder win

🟢Potentially positiveAn order or contract win, which adds to future revenue. How much depends on its size against annual sales and on when it is executed.

IRCON Share Price rises today with fundamentals in focus

Univest, 30 SeptPrice 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.

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.

DalalBaazaar Thesis

🔴Business QualityWeak7.5/20

🟡Financial HealthAdequate10.8/20

🔴GrowthWeak2.4/20

🔴ProfitabilityWeak5.8/15

🟢ValuationAttractive10.7/15

🟡RiskModerate5.8/10

Cheap, but for a reason

The low price is the whole case here, and the business underneath scores poorly. Cheap-and-weak is what a value trap looks like from the outside — it needs a specific reason the numbers are about to improve, not just the observation that they are low. 3 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above 12%14.3%
✗Debt / EBITDA falls below 3x4.5x
✗Free cash flow remains positive-₹1,151 Cr
✗Interest cover stays above 3x3.0x
✓ROCE stays above 8%8.2%