Oval Projects Engineering Limited

Industrials — Engineering & Construction · BSE

₹45.38₹0.00 (0.00%)

DalalBaazaar Score

66 / 100

🟢 Good

Verdict

REASONABLE

Risk

High

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

In simple words: Strong business and financial position, 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, 6:51 pm

Understanding the Business

Company site ↗

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

What does this company do?

Oval Projects Engineering Limited, operates as an engineering, procurement and construction contractor serving the oil and gas, city gas distribution, and urban and social infrastructure sectors, in India.

IndustryEngineering & Construction

SectorIndustrials

Employees125

Annual revenue₹150 Cr

How does it make money?

Turns over ₹150 Cr a year. Of every ₹100 of sales, about ₹9 reaches shareholders as profit, with ₹19 left at the operating level before interest, tax and depreciation. Each of its 125 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 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 19.9% 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?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +154% while net margin moved +70% 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+154%

Margin effect+70%

DalalBaazaar Score

66/ 100

Good

Weighted across six categories. Every point is explained below.

✗ 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

68/ 100

Good

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

Valuation

87/ 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

5.7x

1.3Y Median

25.9x

15 monthly readings · mean 25.8x · range 20.1x–32.0x

Sector Median

30.1x

median of 3 sector peers

🟢Current valuation is approximately 78% below its 1.3y median of 25.9x. 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 81% below the peer median of 30.1x.

vs. its own history

Cheap

25.9x median over 15 months · -78%

vs. sector peers

Cheap

30.1x median of 3 peers · -81%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

4.9x

PEG

0.09

What's Good / What's Bad

🟢 What's Going Well2

Margins are improving
EBITDA margin is up from 5.3% to 19.4% 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 17.9% to 12.5% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 22.3% to 19.9% — often a sign of competition or overexpansion.

Red Flags

4 items require attention · 3 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 132% over 3 years, from ₹32 Cr to ₹75 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.
🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🟡Inventory building faster than salesFinancial
Inventory up 183% against revenue up 154% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 19.9% 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 5.3% to 19.4%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 78% 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 81% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
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?

Returns on shareholder capital are falling
ROE has dropped from 17.9% to 12.5%. 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.
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.
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

1Revenue growth stays above 27% a year✓ 36.4% CAGR
Latest reported year was 31.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 17%✓ 19.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA stays below 2x✗ 2.6x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4Free cash flow remains positive✗ -₹48 Cr
Profit that never becomes cash eventually stops being profit.
5Interest cover stays above 3x✓ 3.4x
How much operating profit can fall before interest stops being comfortably covered.

Investment Checklist

8 / 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 · 3 neutral · 1 weak

Market Cap

₹94 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

5.7x

Cheap

Cheap against the generic band

P/B Ratio

0.86x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹7.96

Profitable

Profitable on a per-share basis

ROE

16.5%

Strong

Strong capital efficiency

ROCE

19.9%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.68x

Moderate

Moderate leverage

Revenue Growth (YoY)

31.9%

Healthy

Healthy top-line growth

Profit Growth (YoY)

8.1%

Modest

Slow profit growth

Dividend Yield

2.20%

Healthy

Meaningful cash return while you hold the stock

Free Cash Flow

-₹57 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

ROA

9.1%

Good

Assets are working hard

Operating Margin

15.1%

Good

Healthy core-business profitability

Net Margin

9.0%

Average

Average bottom-line conversion

Current Ratio

2.01

Comfortable

Healthy short-term liquidity

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

45.9 / 49.9

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

39.7

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹59 Cr	₹78 Cr	₹102 Cr	₹150 Cr	+36.4%
EBITDA	₹3 Cr	₹10 Cr	₹18 Cr	₹29 Cr	+110.9%
EBITDA Margin	5.3%	13.0%	17.9%	19.4%	—
PAT (Net Profit)	₹3 Cr	₹4 Cr	₹9 Cr	₹14 Cr	+62.7%
EPS	₹1.53	₹2.12	—	—	—
ROE	17.9%	12.1%	16.7%	12.5%	—
ROCE	22.3%	20.7%	21.5%	19.9%	—
Total Debt	₹32 Cr	₹32 Cr	₹54 Cr	₹75 Cr	+32.4%
Free Cash Flow	₹12 Cr	-₹1 Cr	-₹16 Cr	-₹48 Cr	—

🟢 Revenue has grown at 36.4% a year over 3 years.

🟢 EBITDA has grown at 110.9% a year over 3 years.

🟢 EBITDA Margin has risen from 5.3% to 19.4% over 3 years (+14.2 pts).

🟢 PAT (Net Profit) has grown at 62.7% a year over 3 years.

🔴 ROE has fallen from 17.9% to 12.5% over 3 years (-5.5 pts).

🔴 ROCE has fallen from 22.3% to 19.9% over 3 years (-2.4 pts).

🔴 Total Debt has grown at 32.4% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹12 Cr to -₹48 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹217 Cr

Total Liabilities

₹107 Cr

Cash & Equivalents

₹26 Cr

Operating Cash Flow

-₹37 Cr

Capex

-₹11 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

72.1%

Corporate Actions

Dividend Rate

₹1

Ex-Dividend Date

22 Sept 2026

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

2 positive4 general

Compare with W.S.INDUSTR.

Equitymaster, 16 Oct

Goutam Debnath, Chairman & MD, OVAL Projects Engineering Ltd.

https://smallcapspotlight.in/, 30 Jan

OVAL Projects Engineering Delivers 114% YoY Revenue Growth in Q1 FY27; Unexecuted Order Book Stands at RS. 525.01 Cr

Business Standard, 03 AugOrder win

🟢Potentially positiveOrder wins add to future revenue, though the effect depends on the contract's size against annual sales and on when it is executed.

OVAL Share Price Update: Valuation, Sector and Peer View

Univest, 03 Sept

Oval Projects Engineering sets Sept 22 record date for final dividend

scanx.trade, 29 AugCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Compare with VIJAYA SHRI.

Equitymaster, 16 Oct

Watch Items

Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongBusiness Quality · Growth · Valuation

MiddlingFinancial Health · Profitability

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. 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 ↑