McNally Bharat Engineering Company Limited

Industrials — Engineering & Construction · NSE

₹420.30−₹8.55 (−1.99%)

DalalBaazaar Score

67 / 100

🟢 Good

Verdict

REASONABLE

Risk

Low

Driven by micro-cap size, which brings thin liquidity.

In simple words: Strong business and financial position, with modest growth. Nothing obvious stands out as stretched — the usual checks on business quality and management still apply.

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 McNally Bharat Engineering Company Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

McNally Bharat Engineering Company Limited engages in engineering, procurement, and construction businesses in India.

IndustryEngineering & Construction

SectorIndustrials

Employees323

Annual revenue₹73 Cr

How does it make money?

Turns over ₹73 Cr a year. Of every ₹100 of sales, about ₹4715 reaches shareholders as profit, with ₹490 left at the operating level before interest, tax and depreciation. Each of its 323 employees supports ₹22.6 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹22.6 lakh

Who are its competitors?

The closest listed comparisons in its industry are LARSEN & TOUBRO LTD., ADANI PORT & SEZ LTD, SIEMENS 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 638.7% 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 ROE14.1%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -81% while net margin moved -887% 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-81%

Margin effect-887%

DalalBaazaar Score

67/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 42.2% a year

Quality vs. Valuation

Company Quality

68/ 100

Good

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

Valuation

83/ 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

0.4x

Sector Median

30.1x

median of 3 sector peers

🟢Against its sector it trades 99% below the peer median of 30.1x.

vs. its own history

Not enough price and earnings history

vs. sector peers

Cheap

30.1x median of 3 peers · -99%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

4.2x

PEG

—

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from -58.3% to 489.7% over 3 years.
Debt is being paid down
Total debt is down 97% over 3 years.
Cash generation is improving
Free cash flow is up 324% over 3 years.
High return on capital employed
ROCE of 638.7% is the mark of a business that converts capital into profit efficiently.
Very low debt
Debt/Equity of 0.17x leaves the balance sheet with plenty of headroom.

🔴 What Needs Attention0

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

Red Flags

1 item require attention · 1 watch

🟡Shareholders have been dilutedOwnership
Shares outstanding are up 215% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 638.7% 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 -58.3% to 489.7%. 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 97% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Cheaper than its peers
It trades 99% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹42 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.

🔴 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

1EBITDA margin holds above 488%✓ 489.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✓ ₹42 Cr
Profit that never becomes cash eventually stops being profit.
3Debt / EBITDA stays below 2x✓ 0.3x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4ROCE stays above 636%✓ 638.7%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

11 / 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 · 4 neutral · 0 weak

Market Cap

₹1,401 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

0.4x

Cheap

Cheap against the generic band

P/B Ratio

2.45x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹1,118.66

Profitable

Profitable on a per-share basis

ROE

604.4%

Strong

Strong capital efficiency

ROCE

638.7%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.17x

Low

Conservative leverage

Revenue Growth (YoY)

0.7%

Modest

Modest growth

Profit Growth (YoY)

301.0%

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

₹42 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

-46.7%

Weak

Thin margins leave little room for error

Net Margin

4955.1%

Good

Strong bottom-line conversion

Current Ratio

1.20

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

-0.22

Defensive

Steadier than the market

52W Range Position

79%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

456.2 / 277.2

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

36.2

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹379 Cr	₹168 Cr	₹105 Cr	₹73 Cr	-42.2%
EBITDA	-₹221 Cr	-₹46 Cr	-₹830 Cr	₹358 Cr	—
EBITDA Margin	-58.3%	-27.5%	-790.7%	489.7%	—
PAT (Net Profit)	-₹2,271 Cr	-₹883 Cr	-₹1,716 Cr	₹3,450 Cr	—
EPS	₹-2,146.4	₹-41.74	₹-88.69	₹1,034.87	—
Total Debt	₹3,106 Cr	₹3,107 Cr	₹3,095 Cr	₹98 Cr	-68.4%
Free Cash Flow	₹10 Cr	-₹13 Cr	-₹17 Cr	₹42 Cr	+61.9%

🔴 Revenue has shrunk at 42.2% a year over 3 years.

🟢 EBITDA has turned positive, from -₹221 Cr to ₹358 Cr.

🟢 EBITDA Margin has risen from -58.3% to 489.7% over 3 years (+547.9 pts).

🟢 PAT (Net Profit) has turned positive, from -₹2,271 Cr to ₹3,450 Cr.

🟢 EPS has turned positive, from ₹-2,146.4 to ₹1,034.87.

🟢 Total Debt has shrunk at 68.4% a year over 3 years.

🟢 Free Cash Flow has grown at 61.9% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹824 Cr

Total Liabilities

₹253 Cr

Cash & Equivalents

₹4 Cr

Operating Cash Flow

₹42 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

90.0%

Corporate Actions

Ex-Dividend Date

18 Sept 2013

Peer Comparison

Company	P/E	ROE
LARSEN & TOUBRO LTD.	30.1x	15.2%
ADANI PORT & SEZ LTD	29.9x	14.1%
SIEMENS LTD	88.8x	10.5%

Recent News

1 mixed5 general

McNally Bharat Engineering (BSE:532629) - Stock Analysis

Simply Wall Street, 14 Oct

Mcnally Bharat Engineering Company Lower Circuit Today

Univest, 12 Oct

Mcnally Bharat Engineering Company Ltd. Key Financial Ratios – Valuation, Profitability & More

Value Research, 30 Aug

McNally Bharat receives trading approval for 3.33 crore shares

scanx.trade, 28 Aug

Mcnally Bharat Engineering Company Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 31 Aug

McNally Bharat Reports Q3FY26 Results with Exceptional Gains from Resolution Plan

scanx.trade, 20 FebResults

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

Watch Items

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

DalalBaazaar Thesis

StrongBusiness Quality · Financial Health · Profitability · Valuation

WeakGrowth · Risk

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.

All 4 tripwires holding · see Key things to watch ↑