Konstelec Engineers Limited

Sector n/a · NSE

₹178.55+₹5.50 (+3.18%)

DalalBaazaar Score

43 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

Driven by moderate debt load, negative free cash flow, micro-cap size, which brings thin liquidity.

In simple words: The business is earning a fairly low return on the money invested in it, with modest growth. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:07 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

The 60-second version of Konstelec Engineers 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 ₹210 Cr a year. Of every ₹100 of sales, about ₹3 reaches shareholders as profit, with ₹10 left at the operating level before interest, tax and depreciation.

EBITDA margin10.4%

Net margin3.5%

What is its competitive advantage?Some evidence

ROCE of 17.5% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

ROCE17.5%

ROE6.9%

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +37% while net margin moved -26% 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+37%

Margin effect-26%

DalalBaazaar Score

43/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

44/ 100

Weak

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.

Weak on business quality and not cheap enough to compensate.

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

P/E (Trailing)

—

P/B

—

EV/EBITDA

15.3x

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well1

Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention4

Debt is rising
Total debt is up 158% 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 11.6% to 6.9% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 20.3% to 17.5% — often a sign of competition or overexpansion.

Red Flags

2 items require attention · 2 high

🔴Debt has risen sharplyFinancial
Total debt is up 158% over 3 years, from ₹35 Cr to ₹90 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.

Investment Thesis

🟢 Bull CaseWhat could make this work?

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 4.1x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Returns on shareholder capital are falling
ROE has dropped from 11.6% to 6.9%. 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.
Several serious flags at once
2 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 8% a year✓ 11.1% CAGR
Latest reported year was 8.6%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 8%✓ 10.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA falls below 3x✗ 4.1x
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✗ -₹14 Cr
Profit that never becomes cash eventually stops being profit.
5Interest cover stays above 3x✗ 2.0x
How much operating profit can fall before interest stops being comfortably covered.

Investment Checklist

5 / 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

2 good · 7 neutral · 2 weak

Market Cap

₹270 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

6.9%

Weak

Weak capital efficiency

ROCE

17.5%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.85x

Moderate

Moderate leverage

Revenue Growth (YoY)

8.6%

Modest

Modest growth

Profit Growth (YoY)

53.5%

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

-₹14 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹178.55

Gross Margin

65.5%

Proxy

Operating margin unavailable — showing gross margin instead

Net Margin

3.5%

Average

Average bottom-line conversion

Current Ratio

1.62

Comfortable

Healthy short-term liquidity

Technical Snapshot

SMA 20 / SMA 50

53.9 / 58.2

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

22.2

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹153 Cr	₹215 Cr	₹194 Cr	₹210 Cr	+11.1%
EBITDA	₹14 Cr	₹18 Cr	₹15 Cr	₹22 Cr	+14.7%
EBITDA Margin	9.4%	8.4%	7.8%	10.4%	—
PAT (Net Profit)	₹7 Cr	₹9 Cr	₹5 Cr	₹7 Cr	+0.5%
EPS	₹4.76	₹7.62	₹3.14	—	—
ROE	11.6%	9.5%	4.8%	6.9%	—
ROCE	20.3%	17.9%	13.6%	17.5%	—
Total Debt	₹35 Cr	₹45 Cr	₹69 Cr	₹90 Cr	+37.1%
Free Cash Flow	-₹6 Cr	-₹28 Cr	-₹20 Cr	-₹14 Cr	—

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

🟢 EBITDA has grown at 14.7% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 10.4% over 3 years.

🟡 PAT (Net Profit) has been broadly flat over 3 years (0.5% a year).

🔴 ROE has fallen from 11.6% to 6.9% over 3 years (-4.7 pts).

🔴 ROCE has fallen from 20.3% to 17.5% over 3 years (-2.8 pts).

🔴 Total Debt has grown at 37.1% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹266 Cr

Total Liabilities

₹160 Cr

Total Debt

₹90 Cr

Cash & Equivalents

₹26 Cr

Operating Cash Flow

-₹10 Cr

Capex

-₹4 Cr

Recent News

1 mixed5 general

Konstelec FY26 PAT rises 53.5% on margin expansion

scanx.trade, 23 MayCapacity

🟡Mixed / dependsCapacity additions can raise revenue over two to three years, but the capital spend usually pressures free cash flow first. Worth checking whether the capex is funded from operations or from borrowing.

Price Band Hitters, August 31, 2026 at 3:30 PM IST

HDFC Sky, 31 Aug

Konstelec Engineers secures Rs 58.48 crore order from Numaligarh Refinery for NREP instrumentation works

scanx.trade, 29 Jul

Blockbuster debut: Konstelec Engineers share price opens with 200% premium at ₹210 on NSE SME

Livemint, 30 Jan

Konstelec Engineers (NSEI:KONSTELEC) - Stock Analysis

Simply Wall Street, 30 Jan

Konstelec Engineers lists at 200% premium over IPO price on NSE SME

Moneycontrol.com, 30 Jan

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.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

🟡Business QualityAdequate10.3/20

🟡Financial HealthAdequate9.2/20

🟡GrowthModest9.3/20

🔴ProfitabilityWeak4.6/15

🟡ValuationFair7.5/15

🔴RiskHigh2.4/10

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation. 2 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓Revenue growth stays above 8% a year11.1% CAGR
✓EBITDA margin holds above 8%10.4%
✗Debt / EBITDA falls below 3x4.1x
✗Free cash flow remains positive-₹14 Cr
✗Interest cover stays above 3x2.0x