Knowledge Marine & Engineering Works Limited

Industrials — Marine Shipping · NSE

₹3,349.00+₹106.70 (+3.29%)

DalalBaazaar Score

57 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Moderate

Driven by negative free cash flow, small-cap size, which brings sharper price swings, a very high earnings multiple, which leaves little margin for disappointment.

In simple words: Reasonable but unspectacular business quality, 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, 7:01 pm

Understanding the Business

Company site ↗

The 60-second version of Knowledge Marine & Engineering Works Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Knowledge Marine & Engineering Works Limited owns and operates marine crafts in India.

IndustryMarine Shipping

SectorIndustrials

Employees479

Annual revenue₹251 Cr

How does it make money?

Turns over ₹251 Cr a year. Of every ₹100 of sales, about ₹31 reaches shareholders as profit, with ₹44 left at the operating level before interest, tax and depreciation. Each of its 479 employees supports ₹52.4 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹52.4 lakh

Who are its competitors?

The closest listed comparisons in its industry are ADANI PORT & SEZ LTD, LARSEN & TOUBRO 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?Little sign of one

Returns on capital of 13.4% 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.

Peer median ROE15.2%

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +25% while net margin moved +34% 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+25%

Margin effect+34%

DalalBaazaar Score

57/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ P/E of 62.2x is demanding — it needs sustained high growth to justify
• P/E is close to its own historical median of 69.3x
✗ P/B of 14.36x is a steep premium to book

Quality vs. Valuation

Company Quality

63/ 100

Average

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

Valuation

32/ 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.

Historical Valuation

Current P/E

62.2x

2Y Median

69.3x

24 monthly readings · mean 70.6x · range 40.8x–106.8x

Sector Median

30.0x

median of 2 sector peers

🟢Current valuation is approximately 10% below its 2y median of 69.3x. 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 108% above the peer median of 30.0x.

vs. its own history

Fair

69.3x median over 24 months · -10%

vs. sector peers

Expensive

30.0x median of 2 peers · +108%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

78.3x

PEG

3.32

What's Good / What's Bad

🟢 What's Going Well2

Margins are improving
EBITDA margin is up from 34.4% to 44.0% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 35.1% to 13.8% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 44.7% to 13.4% — often a sign of competition or overexpansion.

Red Flags

3 items require attention · 3 high

🔴Debt has risen sharplyFinancial
Total debt is up 820% over 3 years, from ₹24 Cr to ₹222 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.
🔴Inventory building faster than salesFinancial
Inventory up 284% against revenue up 25% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 34.4% to 44.0%. 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?

A premium to the sector to defend
It trades 108% above the peer median. That premium needs a reason that persists, or it closes.
Growth barely outpaces inflation
Revenue compounding at 7.6% 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.
Returns on shareholder capital are falling
ROE has dropped from 35.1% to 13.8%. 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
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 42%✓ 44.0%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA stays below 2x✗ 2.0x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
3Free cash flow remains positive✗ -₹45 Cr
Profit that never becomes cash eventually stops being profit.
4Revenue growth stays above 6% a year✓ 7.6% CAGR
Latest reported year was 138.1%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
5ROCE stays above 10%✓ 13.4%
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
✓ Analyst consensus isn't majority-sell

Price history

Quick Metrics

4 good · 4 neutral · 3 weak

Market Cap

₹8,495 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

62.2x

Expensive

Expensive — verify against sector peers

P/B Ratio

14.36x

Rich

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

EPS (TTM)

₹53.81

Profitable

Profitable on a per-share basis

ROE

13.8%

Moderate

Moderate capital efficiency

ROCE

13.4%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.39x

Low

Conservative leverage

Revenue Growth (YoY)

138.1%

Healthy

Healthy top-line growth

Profit Growth (YoY)

392.2%

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

-₹45 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

33.5x

Improving

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

Operating Margin

58.2%

Good

Healthy core-business profitability

Net Margin

40.0%

Good

Strong bottom-line conversion

Current Ratio

1.22

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

-0.13

Defensive

Steadier than the market

52W Range Position

98%

Near high

Near its 52-week high

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹202 Cr	₹164 Cr	₹192 Cr	₹251 Cr	+7.6%
EBITDA	₹69 Cr	₹50 Cr	₹82 Cr	₹110 Cr	+16.8%
EBITDA Margin	34.4%	30.4%	42.6%	44.0%	—
PAT (Net Profit)	₹47 Cr	₹31 Cr	₹50 Cr	₹79 Cr	+18.8%
EPS	₹22.63	₹14.2	₹23.06	₹34.51	+15.1%
ROE	35.1%	18.3%	22.9%	13.8%	—
ROCE	44.7%	20.0%	20.9%	13.4%	—
Total Debt	₹24 Cr	₹60 Cr	₹133 Cr	₹222 Cr	+109.5%
Free Cash Flow	₹4 Cr	-₹20 Cr	-₹43 Cr	-₹45 Cr	—

🟢 Revenue has grown at 7.6% a year over 3 years.

🟢 EBITDA has grown at 16.8% a year over 3 years.

🟢 EBITDA Margin has risen from 34.4% to 44.0% over 3 years (+9.6 pts).

🟢 PAT (Net Profit) has grown at 18.8% a year over 3 years.

🟢 EPS has grown at 15.1% a year over 3 years.

🔴 ROE has fallen from 35.1% to 13.8% over 3 years (-21.3 pts).

🔴 ROCE has fallen from 44.7% to 13.4% over 3 years (-31.3 pts).

🔴 Total Debt has grown at 109.5% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹4 Cr to -₹45 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹820 Cr

Total Liabilities

₹247 Cr

Cash & Equivalents

₹74 Cr

Operating Cash Flow

₹74 Cr

Capex

-₹119 Cr

Shareholding (proxy)

Institutional Holding

3.0%

Insider Holding

65.7%

Analyst Consensus

Recommendations

1 Buy · 0 Hold · 0 Sell

Peer Comparison

Company	P/E	ROE
ADANI PORT & SEZ LTD	29.9x	14.1%
LARSEN & TOUBRO LTD.	30.1x	15.2%

Recent News

1 positive1 mixed4 general

Knowledge Marine & Engineering Works (KMEW.NS) Slips 1.64% to ₹3,233.2 as Traders Eye ₹3,071.54 Support - Stop Loss Guidance

https://www.siam.in/, 15 Oct

Knowledge Marine & Engineering Works' (NSE:KMEW) Earnings Aren't As Good As They Appear

Simply Wall Street, 08 JunResults

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

Ashish Kacholia portfolio stock Knowledge Marine zooms 86% in 4 months

Business Standard, 29 Jul

Knowledge Marine Q1FY27 revenue up 138% to ₹115.4 crore; PAT jumps 466%

scanx.trade, 23 AugResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Knowledge Marine & Engineering Works Ltd. (KMEW) Share Price Hits Fresh 52-Week High

Univest, 17 Aug

Knowledge Marine & Engineering Works Ltd. Peer Comparison – Compare with Others

Value Research, 30 Aug

Watch Items

Trading very close to its 52-week high — momentum-driven entries here carry more mean-reversion risk.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongBusiness Quality · Growth

MiddlingFinancial Health · Profitability · Risk

WeakValuation

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 stays below 2x; Free cash flow remains positive · see Key things to watch ↑