Laxmipati Engineering Works Limited

Industrials — Aerospace & Defense · BSE

₹402.05−₹22.95 (−5.40%)

DalalBaazaar Score

78 / 100

🟢 Good

Verdict

ATTRACTIVE

Risk

Moderate

Driven by 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, 8:27 pm

Understanding the Business

Company site ↗

The 60-second version of Laxmipati 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?

Laxmipati Engineering Works Limited engages in the ship building and repair, fabrication, heavy engineering, engineering infrastructure and services, shut down maintenance projects, and precision machining in India.

IndustryAerospace & Defense

SectorIndustrials

Employees473

Annual revenue₹72 Cr

How does it make money?

Turns over ₹72 Cr a year. Of every ₹100 of sales, about ₹38 reaches shareholders as profit, with ₹18 left at the operating level before interest, tax and depreciation. Each of its 473 employees supports ₹15.2 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹15.2 lakh

Who are its competitors?

The closest listed comparisons in its industry are LARSEN & TOUBRO LTD., SIEMENS LTD, ABB INDIA LIMITED. 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 77.1% 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 ROE15.2%

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 +374% while net margin moved -221% 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+374%

Margin effect-221%

DalalBaazaar Score

78/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of -0.43 — historically steadier than the index
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

85/ 100

Excellent

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

Valuation

73/ 100

Cheap

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

A good business currently available at an undemanding price — the combination this framework is built to look for.

Historical Valuation

Current P/E

8.6x

2Y Median

44.2x

28 monthly readings · mean 90.1x · range 22.1x–310.1x

Sector Median

88.8x

median of 3 sector peers

🟢Current valuation is approximately 81% below its 2y median of 44.2x. 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 90% below the peer median of 88.8x.

vs. its own history

Cheap

44.2x median over 28 months · -81%

vs. sector peers

Cheap

88.8x median of 3 peers · -90%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

19.3x

PEG

—

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 0.2% to 17.9% over 3 years.
Debt is being paid down
Total debt is down 56% over 3 years.
Return on equity is rising
ROE has improved from -364.1% to 75.9%.
Return on capital is rising
ROCE has improved from -3.8% to 77.1%.
High return on capital employed
ROCE of 77.1% is the mark of a business that converts capital into profit efficiently.

🔴 What Needs Attention0

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

Red Flags

1 item require attention · 1 watch

🟡Free cash flow is negativeFinancial
Free cash flow was -₹6 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 77.1% 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 0.2% to 17.9%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Deleveraging frees up earnings
Debt is down 56% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Priced below its own history
The stock trades 81% 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 90% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.

🔴 Bear CaseWhat could go wrong?

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
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 51% a year✓ 67.9% CAGR
Latest reported year was 64.6%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 16%✓ 17.9%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹6 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.3x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 74%✓ 77.1%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

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

Price history

Quick Metrics

7 good · 2 neutral · 2 weak

Market Cap

₹231 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

8.6x

Cheap

Cheap against the generic band

P/B Ratio

6.49x

Rich

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

EPS (TTM)

₹47

Profitable

Profitable on a per-share basis

ROE

122.4%

Strong

Strong capital efficiency

ROCE

77.1%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.47x

Low

Conservative leverage

Revenue Growth (YoY)

64.6%

Healthy

Healthy top-line growth

Profit Growth (YoY)

278.5%

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

-₹9 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

ROA

11.3%

Good

Assets are working hard

Operating Margin

13.2%

Average

Average margins

Net Margin

37.6%

Good

Strong bottom-line conversion

Current Ratio

1.78

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

-0.43

Defensive

Steadier than the market

52W Range Position

51%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

444.7 / 453.0

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

36.1

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹15 Cr	₹40 Cr	₹50 Cr	₹72 Cr	+67.9%
EBITDA	₹0 Cr	₹6 Cr	₹10 Cr	₹13 Cr	+645.8%
EBITDA Margin	0.2%	14.6%	20.7%	17.9%	—
PAT (Net Profit)	-₹5 Cr	₹1 Cr	₹6 Cr	₹27 Cr	—
EPS	₹-8.22	₹1.35	₹11.3	—	—
ROE	-364.1%	37.4%	75.8%	75.9%	—
ROCE	-3.8%	12.5%	18.0%	77.1%	—
Total Debt	₹38 Cr	₹40 Cr	₹45 Cr	₹17 Cr	-23.9%
Free Cash Flow	-₹4 Cr	₹1 Cr	-₹0 Cr	-₹6 Cr	—

🟢 Revenue has grown at 67.9% a year over 3 years.

🟢 EBITDA has grown at 645.8% a year over 3 years.

🟢 EBITDA Margin has risen from 0.2% to 17.9% over 3 years (+17.7 pts).

🟢 PAT (Net Profit) has turned positive, from -₹5 Cr to ₹27 Cr.

🟢 ROE has risen from -364.1% to 75.9% over 3 years (+440.0 pts).

🟢 ROCE has risen from -3.8% to 77.1% over 3 years (+80.9 pts).

🟢 Total Debt has shrunk at 23.9% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹65 Cr

Total Liabilities

₹29 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

₹5 Cr

Capex

-₹11 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

88.3%

Peer Comparison

Company	P/E	ROE
LARSEN & TOUBRO LTD.	30.1x	15.2%
SIEMENS LTD	88.8x	10.5%
ABB INDIA LIMITED	92.6x	19.1%

Recent News

6 general

Laxmipati Engineering reports strong FY26 profit

scanx.trade, 22 Jun

Laxmipati Engineering Works Ltd. Upper Circuit: Price and Key Data

Univest, 05 Oct

Laxmipati Engineering Works Ltd. Peer Comparison – Compare with Others

Value Research, 31 Aug

Laxmipati Engineering Works Ltd. Lower Circuit: Price and Key Data

Univest, 01 Oct

Laxmipati Engineering Works Limited Passes Material Related Party Transaction Resolution Through Postal Ballot

scanx.trade, 01 Apr

Laxmipati Engineering Works (BSE:537669) - Stock Analysis

Simply Wall Street, 06 Feb

Watch Items

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

DalalBaazaar Thesis

StrongBusiness Quality · Financial Health · Growth · Profitability · Valuation

WeakRisk

Points for each in the Score ↑

Attractive on both counts

A good business currently available at an undemanding price — the combination this framework exists to look for. The work left is qualitative: whether the advantage the numbers imply is one you can identify and expect to last.

1 of 5 tripwires tripped — Free cash flow remains positive · see Key things to watch ↑