KARAMTARA ENGINEERING L

Technology — Solar · NSE

₹384.00−₹8.70 (−2.22%)

DalalBaazaar Score

58 / 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: 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, 7:02 pm

Understanding the Business

Company site ↗

The 60-second version of KARAMTARA ENGINEERING L — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Karamtara Engineering Limited manufactures and sells solar mounting structures and tracker components for the solar and transmission sectors in India, North America, Latin America, Europe, Asia, Africa, and Australia.

IndustrySolar

SectorTechnology

Employees1,015

Annual revenue₹4,164 Cr

How does it make money?

Turns over ₹4,164 Cr a year. Of every ₹100 of sales, about ₹5 reaches shareholders as profit, with ₹10 left at the operating level before interest, tax and depreciation. Each of its 1,015 employees supports ₹4.10 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹4.10 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.

Compared side by side in Peers ↓

What is its competitive advantage?Some evidence

ROCE of 18.1% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

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 3 years revenue moved +177% while net margin moved +95% 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+177%

Margin effect+95%

DalalBaazaar Score

58/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ P/E of 54.0x is demanding — it needs sustained high growth to justify
✗ P/B of 9.20x is a steep premium to book

Quality vs. Valuation

Company Quality

70/ 100

Good

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

Valuation

37/ 100

Expensive

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

A good business, but the price already reflects that. The quality is real; the question is whether you are overpaying for it today.

Historical Valuation

Current P/E

54.0x

Sector Median

16.5x

median of 4 sector peers

⚠️Against its sector it trades 226% above the peer median of 16.5x.

vs. its own history

Not enough price and earnings history

vs. sector peers

Expensive

16.5x median of 4 peers · +226%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

31.2x

PEG

0.72

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 7.2% to 10.3% over 3 years.
Return on equity is rising
ROE has improved from 9.4% to 18.8%.
Return on capital is rising
ROCE has improved from 9.8% to 18.1%.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

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

Red Flags

3 items require attention · 3 high

🔴Debt has risen sharplyFinancial
Total debt is up 237% over 3 years, from ₹328 Cr to ₹1,105 Cr.
🔴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.
🔴Receivables growing faster than salesFinancial
Receivables up 315% against revenue up 177% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 18.1% 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.
Margin expansion has further to run
EBITDA margin has risen from 7.2% to 10.3%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
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?

Sales are being booked faster than collected
Receivables are up 315% against revenue up 177%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
A premium to the sector to defend
It trades 226% above the peer median. That premium needs a reason that persists, or it closes.
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.
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

1Revenue growth stays above 30% a year✓ 40.4% CAGR
Latest reported year was 72.3%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 8%✓ 10.3%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA stays below 2x✗ 2.6x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4Free cash flow remains positive✗ -₹251 Cr
Profit that never becomes cash eventually stops being profit.
5ROCE stays above 15%✓ 18.1%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

7 / 10 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

Price history

Quick Metrics

5 good · 3 neutral · 3 weak

Market Cap

₹12,358 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

54.0x

Expensive

Expensive — verify against sector peers

P/B Ratio

9.20x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹7.11

Profitable

Profitable on a per-share basis

ROE

18.8%

Strong

Strong capital efficiency

ROCE

18.1%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.91x

Moderate

Moderate leverage

Revenue Growth (YoY)

72.3%

Healthy

Healthy top-line growth

Profit Growth (YoY)

45.1%

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

-₹251 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

9.0%

Average

Average margins

Net Margin

5.1%

Average

Average bottom-line conversion

Current Ratio

1.09

Adequate

Adequate, but no real cushion

52W Range Position

52%

Mid-range

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1,503 Cr	₹2,328 Cr	₹3,039 Cr	₹4,164 Cr	+40.4%
EBITDA	₹108 Cr	₹205 Cr	₹268 Cr	₹430 Cr	+58.3%
EBITDA Margin	7.2%	8.8%	8.8%	10.3%	—
PAT (Net Profit)	₹42 Cr	₹103 Cr	₹139 Cr	₹229 Cr	+75.4%
EPS	₹1.32	₹3.19	₹4.33	—	—
ROE	9.4%	18.5%	14.2%	18.8%	—
ROCE	9.8%	21.2%	18.8%	18.1%	—
Total Debt	₹328 Cr	₹509 Cr	₹559 Cr	₹1,105 Cr	+50.0%
Free Cash Flow	₹179 Cr	-₹77 Cr	-₹235 Cr	-₹251 Cr	—

🟢 Revenue has grown at 40.4% a year over 3 years.

🟢 EBITDA has grown at 58.3% a year over 3 years.

🟢 EBITDA Margin has risen from 7.2% to 10.3% over 3 years (+3.1 pts).

🟢 PAT (Net Profit) has grown at 75.4% a year over 3 years.

🟢 ROE has risen from 9.4% to 18.8% over 3 years (+9.4 pts).

🟢 ROCE has risen from 9.8% to 18.1% over 3 years (+8.2 pts).

🔴 Total Debt has grown at 50.0% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹179 Cr to -₹251 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹4,142 Cr

Total Liabilities

₹2,922 Cr

Cash & Equivalents

₹75 Cr

Operating Cash Flow

₹675 Cr

Capex

-₹926 Cr

Shareholding (proxy)

Institutional Holding

2.6%

Insider Holding

82.0%

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

KARAMTARA ENGINEERING L Share Price

Upstox, 16 Oct

Karamtara Engineering Limited (KARAMTARA) Share Price NSE

TechGraph, 07 Oct

Karamtara Engineering shares debut at 26% premium; should you buy, sell or hold?

Moneycontrol.com, 17 Sept

Karamtara Engineering Ltd. IPO

The Economic Times, 10 Sept

KARAMTARA ENGINEERING LTD. Stock/Share price , NSE/BSE Forecast News and Live Quotes

Equitymaster, 19 Sept

Karamtara Engineering shares make strong debut, list at 26% premium over IPO price

The Economic Times, 17 Sept

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongGrowth · Profitability

MiddlingBusiness Quality · Financial Health

WeakValuation · Risk

Points for each in the Score ↑

Good business, demanding price

The quality is real and the price already reflects it. Buying here is a bet that the business keeps compounding for long enough to grow into the multiple — which good businesses often do, but it removes the margin for error that a lower price would have given you. 3 high-severity red flags sit above this conclusion and should be read first.

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