Likhitha Infrastructure Limited

Energy — Oil & Gas Equipment & Services · NSE

₹225.10−₹2.55 (−1.12%)

DalalBaazaar Score

47 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Moderate

Driven by negative free cash flow, micro-cap size, which brings thin liquidity, falling profits.

In simple words: Reasonable but unspectacular business quality, but sales are shrinking. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:49 pm

Understanding the Business

Company site ↗

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

What does this company do?

Likhitha Infrastructure Limited engages in laying, erection, testing, and commissioning of oil and gas pipelines in India.

IndustryOil & Gas Equipment & Services

SectorEnergy

Employees381

Annual revenue₹457 Cr

How does it make money?

Turns over ₹457 Cr a year. Of every ₹100 of sales, about ₹9 reaches shareholders as profit, with ₹13 left at the operating level before interest, tax and depreciation. Each of its 381 employees supports ₹1.20 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.20 Cr

Who are its competitors?

The closest listed comparisons in its industry are RELIANCE INDUSTRIES LTD, OIL AND NATURAL GAS CORP., BHARAT PETROLEUM CORP LT, INDIAN OIL CORP 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 12.8% 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 ROE15.4%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +25% while net margin moved -47% 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-47%

DalalBaazaar Score

47/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue CAGR of only 7.8% — barely ahead of inflation
✗ Profit has declined at 13.0% a year
✗ Profit is compounding slower than revenue — margins are being squeezed as the business grows
✗ Latest-year revenue growth of -30.5% is below the longer-term trend — momentum is fading
✗ Profit fell 47.3% in the latest year

Quality vs. Valuation

Company Quality

47/ 100

Average

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

Valuation

39/ 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

27.2x

3Y Median

17.4x

40 monthly readings · mean 17.9x · range 8.5x–30.3x

Sector Median

6.9x

median of 4 sector peers

⚠️Current valuation is approximately 56% above its 3y median of 17.4x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

⚠️Against its sector it trades 296% above the peer median of 6.9x.

vs. its own history

Expensive

17.4x median over 40 months · +56%

vs. sector peers

Expensive

6.9x median of 4 peers · +296%

vs. generic bands

Fair

15x–35x

EV/EBITDA

13.7x

PEG

—

What's Good / What's Bad

🟢 What's Going Well2

Very low debt
Debt/Equity of 0.09x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 23.8% to 9.5% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 32.4% to 12.8% — often a sign of competition or overexpansion.

Red Flags

4 items require attention · 2 high · 2 watch

🔴Significant margin compressionFinancial
EBITDA margin has fallen 10.6 points, from 23.7% to 13.1%.
🔴Inventory building faster than salesFinancial
Inventory up 156% against revenue up 25% — stock may not be moving.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹12 Cr in the latest year.
🟡Profit is decliningFinancial
Net profit is down 34% over 3 years.

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?

Margins are being competed away
EBITDA margin has fallen from 23.7% to 13.1%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The price already assumes success
The stock trades 56% above its own median multiple. At this level the business has to deliver just to stand still, and a stumble is repriced twice — lower earnings on a lower multiple.
Growth barely outpaces inflation
Revenue compounding at 7.8% 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 23.8% to 9.5%. 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

1EBITDA margin holds above 11%✓ 13.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹12 Cr
Profit that never becomes cash eventually stops being profit.
3Revenue growth stays above 6% a year✓ 7.8% CAGR
Latest reported year was -30.5%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
4Debt / EBITDA stays below 2x✓ 0.0x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 10%✓ 12.8%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

5 / 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

2 good · 6 neutral · 3 weak

Market Cap

₹889 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

27.2x

Fair

Fairly valued against the generic band

P/B Ratio

2.16x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹8.28

Profitable

Profitable on a per-share basis

ROE

9.5%

Moderate

Moderate capital efficiency

ROCE

12.8%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.09x

Low

Conservative leverage

Revenue Growth (YoY)

-30.5%

Shrinking

Sales are contracting

Profit Growth (YoY)

-47.3%

Falling

Profits are shrinking

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹12 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

11.0%

Average

Average margins

Net Margin

7.8%

Average

Average bottom-line conversion

Current Ratio

8.69

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.30

Defensive

Steadier than the market

52W Range Position

67%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

226.4 / 219.4

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

47.2

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹365 Cr	₹422 Cr	₹520 Cr	₹457 Cr	+7.8%
EBITDA	₹86 Cr	₹97 Cr	₹100 Cr	₹60 Cr	-11.5%
EBITDA Margin	23.7%	23.1%	19.2%	13.1%	—
PAT (Net Profit)	₹60 Cr	₹65 Cr	₹69 Cr	₹39 Cr	-13.0%
EPS	₹15.09	₹16.58	₹17.57	₹9.94	-13.0%
ROE	23.8%	21.1%	18.6%	9.5%	—
ROCE	32.4%	28.8%	25.0%	12.8%	—
Total Debt	—	—	₹1 Cr	₹0 Cr	—
Free Cash Flow	₹22 Cr	₹7 Cr	-₹1 Cr	-₹12 Cr	—

🟢 Revenue has grown at 7.8% a year over 3 years.

🔴 EBITDA has shrunk at 11.5% a year over 3 years.

🔴 EBITDA Margin has fallen from 23.7% to 13.1% over 3 years (-10.6 pts).

🔴 PAT (Net Profit) has shrunk at 13.0% a year over 3 years.

🔴 EPS has shrunk at 13.0% a year over 3 years.

🔴 ROE has fallen from 23.8% to 9.5% over 3 years (-14.3 pts).

🔴 ROCE has fallen from 32.4% to 12.8% over 3 years (-19.6 pts).

🔴 Free Cash Flow has turned negative, from ₹22 Cr to -₹12 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹463 Cr

Total Liabilities

₹51 Cr

Cash & Equivalents

₹70 Cr

Operating Cash Flow

-₹5 Cr

Capex

-₹7 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

70.2%

Corporate Actions

Ex-Dividend Date

17 Sept 2024

Peer Comparison

Company	P/E	ROE
RELIANCE INDUSTRIES LTD	21.9x	8.3%
OIL AND NATURAL GAS CORP.	6.4x	11.7%
BHARAT PETROLEUM CORP LT	7.3x	17.1%
INDIAN OIL CORP LTD	5.3x	15.4%

Recent News

1 positive1 mixed1 negative3 general

Likhitha Infra zooms 20%, stock rebounds 60% from March low; here's why

Business Standard, 07 Apr

Likhitha Infrastructure Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 27 Aug

Likhitha Infrastructure Share Price Target 2026: Rs 310 Analyst Forecast

Univest, 24 JunAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Likhitha Infrastructure Wins ₹510 Crore Pipeline Project From CPECC Abu Dhabi

scanx.trade, 26 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.

Likhitha Infrastructure Limited's (NSE:LIKHITHA) Stock Has Been Sliding But Fundamentals Look Strong: Is The Market Wrong?

Simply Wall Street, 25 Dec

Likhitha Infrastructure Q4 Net Profit Slumps 70% to ₹5.2 Crore YoY

Sahi, 27 MayResults

🔴Potentially negativeReported deterioration, which feeds the growth and margin inputs on this page directly.

Watch Items

Revenue growth is negative (-30.5%) on the latest reported period — check if this is one-off or a trend.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongFinancial Health

MiddlingBusiness Quality · Risk

WeakGrowth · Profitability · Valuation

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

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