Prabha Energy Limited

Energy — Oil & Gas E&P · NSE

₹208.00+₹2.14 (+1.04%)

DalalBaazaar Score

38 / 100

🔴 Weak

Verdict

CAUTION

Risk

Very High

Driven by short-term liabilities exceed short-term assets, 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 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, 7:00 pm

Understanding the Business

Company site ↗

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

What does this company do?

Prabha Energy Limited engages in oil and gas exploration, production, and trading in India. It's portfolio comprises onshore exploration and production assets in both conventional and unconventional hydrocarbons.

IndustryOil & Gas E&P

SectorEnergy

Employees13

Annual revenue₹6 Cr

How does it make money?

Turns over ₹6 Cr a year. Of every ₹100 of sales, about ₹9 reaches shareholders as profit, with ₹-4 left at the operating level before interest, tax and depreciation. Each of its 13 employees supports ₹46.7 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹46.7 lakh

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 0.1% 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?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved -82% while net margin moved -17% 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-82%

Margin effect-17%

DalalBaazaar Score

38/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 43.4% a year
✗ Profit has declined at 46.7% a year

Quality vs. Valuation

Company Quality

41/ 100

Weak

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

Valuation

28/ 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.

Historical Valuation

Current P/E

2311.1x

2Y Median

753.9x

21 monthly readings · mean 1389.4x · range 553.6x–4440.6x

Sector Median

6.9x

median of 4 sector peers

⚠️Current valuation is approximately 207% above its 2y median of 753.9x. 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 33547% above the peer median of 6.9x.

vs. its own history

Expensive

753.9x median over 21 months · +207%

vs. sector peers

Expensive

6.9x median of 4 peers · +33547%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

—

PEG

—

Red Flags

6 items require attention · 4 high · 2 watch

🔴Debt has risen sharplyFinancial
Total debt is up 1411% over 3 years, from ₹11 Cr to ₹163 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.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 14.2 points, from 10.4% to -3.8%.
🔴Inventory building faster than salesFinancial
Inventory up 492% against revenue up -82% — stock may not be moving.
🟡Profit is decliningFinancial
Net profit is down 85% over 3 years.
🟡Short-term liquidity is tightFinancial
Current ratio of 0.70 — near-term obligations exceed near-term assets.

Investment Thesis

🟢 Bull CaseWhat could make this work?

No clear supporting case emerges from the available numbers.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 10.4% to -3.8%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The price already assumes success
The stock trades 207% 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.
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
4 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

1EBITDA margin holds above -6%✓ -3.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹48 Cr
Profit that never becomes cash eventually stops being profit.
3ROCE stays above 8%✗ 0.1%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
4Valuation vs its own median of 753.9x✗ 2311.1x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

6 / 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

4 good · 3 neutral · 4 weak

Market Cap

₹3,247 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

2311.1x

Expensive

Expensive — verify against sector peers

P/B Ratio

4.57x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹0.09

Profitable

Profitable on a per-share basis

ROE

0.1%

Weak

Weak capital efficiency

ROCE

0.1%

Weak

Low return on total capital employed

Debt/Equity

0.38x

Low

Conservative leverage

Revenue Growth (YoY)

49.3%

Healthy

Healthy top-line growth

Profit Growth (YoY)

139.4%

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

-₹48 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

18.1%

Good

Healthy core-business profitability

Net Margin

16.5%

Good

Strong bottom-line conversion

Current Ratio

0.70

Tight

Tight short-term liquidity

52W Range Position

56%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

221.9 / 211.5

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

34.0

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹33 Cr	₹3 Cr	₹4 Cr	₹6 Cr	-43.4%
EBITDA	₹3 Cr	-₹1 Cr	-₹1 Cr	-₹0 Cr	—
EBITDA Margin	10.4%	-30.3%	-36.2%	-3.8%	—
PAT (Net Profit)	₹4 Cr	-₹1 Cr	-₹1 Cr	₹1 Cr	-46.7%
EPS	₹0.27	₹-0.07	₹-0.11	₹0.05	-42.8%
ROE	0.8%	-0.2%	-0.3%	0.1%	—
ROCE	1.0%	-0.2%	-0.3%	0.1%	—
Total Debt	₹11 Cr	₹79 Cr	₹126 Cr	₹163 Cr	+147.2%
Free Cash Flow	-₹6 Cr	-₹69 Cr	-₹51 Cr	-₹48 Cr	—

🔴 Revenue has shrunk at 43.4% a year over 3 years.

🔴 EBITDA has turned negative, from ₹3 Cr to -₹0 Cr.

🔴 EBITDA Margin has fallen from 10.4% to -3.8% over 3 years (-14.2 pts).

🔴 PAT (Net Profit) has shrunk at 46.7% a year over 3 years.

🔴 EPS has shrunk at 42.8% a year over 3 years.

🟡 ROE has held roughly flat at 0.1% over 3 years.

🟡 ROCE has held roughly flat at 0.1% over 3 years.

🔴 Total Debt has grown at 147.2% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹689 Cr

Total Liabilities

₹255 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹3 Cr

Capex

-₹45 Cr

Shareholding (proxy)

Institutional Holding

1.0%

Insider Holding

94.7%

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

2 mixed4 general

PRABHA Share Price Rises 9.19%: Price, Valuation, Peers

Univest, 19 AugPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Prabha Energy fixes record date for second and final call on rights issue

scanx.trade, 03 Jul

PRABHA ENERGY Share Price Gain: Technicals and Valuation

Univest, 18 AugPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Volume Gainers, August 18, 2026, 3:00 PM IST

HDFC Sky, 18 Aug

Prabha Energy Rights Issue 2026 Date, Price, Allotment, Ratio

IPO Watch, 10 Mar

Prabha Energy calls for final rights payment of ₹47.52

scanx.trade, 14 Jul

Watch Items

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

DalalBaazaar Thesis

MiddlingBusiness Quality · Financial Health · Profitability

WeakGrowth · Valuation · Risk

Points for each in the Score ↑

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

3 of 4 tripwires tripped — Free cash flow remains positive; ROCE stays above 8%; Valuation vs its own median of 753.9x · see Key things to watch ↑