K2 Infragen Limited

Sector n/a · NSE

₹275.00−₹10.30 (−3.61%)

DalalBaazaar Score

50 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

High

Driven by moderate debt load, 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. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:03 pm

Understanding the Business

The 60-second version of K2 Infragen Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

How does it make money?

Turns over ₹185 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.

What is its competitive advantage?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 20.4%. Returns that high normally get competed away; when they persist, something is protecting them. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

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 +148% while net margin moved -53% 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+148%

Margin effect-53%

DalalBaazaar Score

50/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✓ Profits have been consistent from year to year
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

51/ 100

Average

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

Valuation

35/ 100

Expensive

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.

vs. its own history

Not enough price and earnings history

vs. sector peers

Not enough peers with a usable P/E

vs. generic bands

No P/E available

EV/EBITDA

16.8x

PEG

—

What's Good / What's Bad

🟢 What's Going Well2

High return on capital employed
ROCE of 20.4% 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 81.5% to 14.8% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 99.7% to 20.4% — often a sign of competition or overexpansion.

Red Flags

5 items require attention · 3 high · 2 watch

🔴Debt has risen sharplyFinancial
Total debt is up 334% over 3 years, from ₹24 Cr to ₹105 Cr.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 11.6 points, from 25.9% to 14.3%.
🔴Receivables growing faster than salesFinancial
Receivables up 280% against revenue up 148% — sales are being booked faster than they are collected.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 7.3x to 3.3x.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹21 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 20.4% 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.
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 25.9% to 14.3%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The debt load needs earnings to hold up
Debt is 4.0x 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 280% against revenue up 148%. 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 81.5% to 14.8%. 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
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 26% a year✓ 35.3% CAGR
Latest reported year was 26.2%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 12%✓ 14.3%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA falls below 3x✗ 4.0x
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✗ -₹21 Cr
Profit that never becomes cash eventually stops being profit.
5Interest cover stays above 3x✓ 3.3x
How much operating profit can fall before interest stops being comfortably covered.

Investment Checklist

4 / 9 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
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

3 good · 7 neutral · 1 weak

Market Cap

₹347 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

Not available

No data

Source didn't return this field

P/B Ratio

Not available

No data

Source didn't return this field

EPS (TTM)

Not available

No data

Source didn't return this field

ROE

14.8%

Moderate

Moderate capital efficiency

ROCE

20.4%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

1.17x

Moderate

Moderate leverage

Revenue Growth (YoY)

26.2%

Healthy

Healthy top-line growth

Profit Growth (YoY)

14.9%

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

-₹21 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Gross Margin

18.6%

Proxy

Operating margin unavailable — showing gross margin instead

Net Margin

7.2%

Average

Average bottom-line conversion

Current Ratio

1.63

Comfortable

Healthy short-term liquidity

Technical Snapshot

SMA 20 / SMA 50

41.7 / 46.4

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

47.4

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹75 Cr	₹109 Cr	₹147 Cr	₹185 Cr	+35.3%
EBITDA	₹19 Cr	₹21 Cr	₹20 Cr	₹27 Cr	+11.1%
EBITDA Margin	25.9%	19.7%	13.4%	14.3%	—
PAT (Net Profit)	₹11 Cr	₹12 Cr	₹12 Cr	₹13 Cr	+5.4%
EPS	₹8.99	₹9.87	₹9.16	—	—
ROE	81.5%	27.7%	15.1%	14.8%	—
ROCE	99.7%	40.1%	21.3%	20.4%	—
Total Debt	₹24 Cr	₹25 Cr	₹57 Cr	₹105 Cr	+63.1%
Free Cash Flow	-₹2 Cr	₹2 Cr	-₹45 Cr	-₹21 Cr	—

🟢 Revenue has grown at 35.3% a year over 3 years.

🟢 EBITDA has grown at 11.1% a year over 3 years.

🔴 EBITDA Margin has fallen from 25.9% to 14.3% over 3 years (-11.6 pts).

🟢 PAT (Net Profit) has grown at 5.4% a year over 3 years.

🔴 ROE has fallen from 81.5% to 14.8% over 3 years (-66.6 pts).

🔴 ROCE has fallen from 99.7% to 20.4% over 3 years (-79.3 pts).

🔴 Total Debt has grown at 63.1% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹230 Cr

Total Liabilities

₹140 Cr

Cash & Equivalents

₹7 Cr

Operating Cash Flow

-₹17 Cr

Capex

-₹4 Cr

Recent News

2 positive4 general

K2 Infragen Secures ₹391 Crore Infrastructure Order, Exceeding Market Cap by 350%

Sahi, 16 JunOrder 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.

K2 Infragen Bags ₹391 Crore Telangana Road Project; Shares Hit Upper Circuit

HDFC Sky, 16 JunOrder 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.

Concerns Surrounding K2 Infragen's (NSE:K2INFRA) Performance

Simply Wall Street, 03 Jun

K2 INFRAGEN LIMITED Share Price

Upstox, 05 May

Compare with

Equitymaster, 10 Oct

K2 InfraGen incorporates SPV for Telangana road project execution

scanx.trade, 01 Aug

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
Sector/industry classification unavailable — verify manually for peer comparison.
3 metrics couldn't be retrieved for this stock — this is more common for smaller or thinly-covered listings.

DalalBaazaar Thesis

MiddlingBusiness Quality · Financial Health · Growth · Profitability · Valuation

WeakRisk

Points for each in the Score ↑

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

2 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Free cash flow remains positive · see Key things to watch ↑