PRANAV CONSTRUCTIONS LTD

Real Estate — Real Estate - Development · NSE

₹93.80+₹0.92 (+0.99%)

DalalBaazaar Score

60 / 100

🟢 Good

Verdict

NEUTRAL

Risk

High

Driven by moderate debt load, 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, 6:07 pm

Mixed / neutral. No major red flags jump out, but nothing here screams "obviously cheap" either. This is a name that needs a peer comparison and a view on near-term earnings triggers before sizing a position.

Understanding the Business

Company site ↗

The 60-second version of PRANAV CONSTRUCTIONS LTD — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Pranav Constructions Limited engages in redevelopment of cooperative housing societies in India. It also involved in commerce, art, science, sports, education, research, social welfare activity, and other socio-economic development activities; and real estate development.

IndustryReal Estate - Development

SectorReal Estate

Employees198

Annual revenue₹762 Cr

How does it make money?

Turns over ₹762 Cr a year. Of every ₹100 of sales, about ₹9 reaches shareholders as profit, with ₹44 left at the operating level before interest, tax and depreciation. Each of its 198 employees supports ₹3.85 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin44.2%

Net margin9.4%

Revenue / employee₹3.85 Cr

Who are its competitors?

The closest listed comparisons in its industry are DLF LIMITED, GODREJ PROPERTIES LTD, OBEROI REALTY LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

DLF LIMITEDP/E 36.6x · ROE 10.3%

GODREJ PROPERTIES LTDP/E 30.2x · ROE 8.4%

OBEROI REALTY LIMITEDP/E 23.5x · ROE 14.7%

What is its competitive advantage?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 47.5%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 28.9% against a peer median of 10.3% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

ROCE47.5%

ROE28.9%

Peer median ROE10.3%

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 +114% while net margin moved +64% 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+114%

Margin effect+64%

DalalBaazaar Score

60/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

62/ 100

Average

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

Valuation

85/ 100

Cheap

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

13.9x

Sector Median

30.2x

median of 3 sector peers

🟢Against its sector it trades 54% below the peer median of 30.2x.

vs. its own history

Not enough price and earnings history

vs. sector peers

Cheap

30.2x median of 3 peers · -54%

vs. generic bands

Cheap

Below 15x

P/E (Trailing)

13.9x

P/B

3.31x

EV/EBITDA

3.9x

PEG

0.27

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well2

High return on capital employed
ROCE of 47.5% is the mark of a business that converts capital into profit efficiently.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention6

Margins are compressing
EBITDA margin has slipped from 46.1% to 44.2% over 3 years.
Debt is rising
Total debt is up 165% over 3 years — worth checking what it funded.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Return on equity is falling
ROE has dropped from 60.5% to 28.9% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 128.1% to 47.5% — often a sign of competition or overexpansion.
Inventory building faster than sales
Inventory is up 591% against revenue growth of 114% — stock may not be moving.

Red Flags

3 items require attention · 2 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 165% over 3 years, from ₹100 Cr to ₹266 Cr.
🔴Inventory building faster than salesFinancial
Inventory up 591% against revenue up 114% — stock may not be moving.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹44 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 47.5% 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.
Cheaper than its peers
It trades 54% 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?

Margins are being competed away
EBITDA margin has fallen from 46.1% to 44.2%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Returns on shareholder capital are falling
ROE has dropped from 60.5% to 28.9%. 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.
Several serious flags at once
2 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 22% a year✓ 28.9% CAGR
Latest reported year was 15.7%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 42%✓ 44.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹44 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.8x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 45%✓ 47.5%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

7 / 10 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

Price history

Quick Metrics

6 good · 4 neutral · 1 weak

Market Cap

₹1,056 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

13.9x

Cheap

Cheap against the generic band

P/B Ratio

3.31x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹6.73

Profitable

Profitable on a per-share basis

ROE

28.9%

Strong

Strong capital efficiency

ROCE

47.5%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

1.08x

Moderate

Moderate leverage

Revenue Growth (YoY)

15.7%

Healthy

Healthy top-line growth

Profit Growth (YoY)

24.1%

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

-₹44 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹93.8

Operating Margin

17.2%

Good

Healthy core-business profitability

Net Margin

9.7%

Average

Average bottom-line conversion

Current Ratio

1.16

Adequate

Adequate, but no real cushion

52W Range Position

Near low

Near its 52-week low

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹355 Cr	₹447 Cr	₹636 Cr	₹762 Cr	+28.9%
EBITDA	₹164 Cr	₹167 Cr	₹277 Cr	₹336 Cr	+27.1%
EBITDA Margin	46.1%	37.4%	43.5%	44.2%	—
PAT (Net Profit)	₹20 Cr	₹40 Cr	₹62 Cr	₹71 Cr	+51.9%
EPS	₹1.81	₹3.52	₹5.53	₹6.33	+51.9%
ROE	60.5%	44.8%	35.5%	28.9%	—
ROCE	128.1%	59.9%	50.9%	47.5%	—
Total Debt	₹100 Cr	₹104 Cr	₹202 Cr	₹266 Cr	+38.5%
Free Cash Flow	₹36 Cr	₹5 Cr	-₹97 Cr	-₹44 Cr	—

🟢 Revenue has grown at 28.9% a year over 3 years.

🟢 EBITDA has grown at 27.1% a year over 3 years.

🔴 EBITDA Margin has fallen from 46.1% to 44.2% over 3 years (-2.0 pts).

🟢 PAT (Net Profit) has grown at 51.9% a year over 3 years.

🟢 EPS has grown at 51.9% a year over 3 years.

🔴 ROE has fallen from 60.5% to 28.9% over 3 years (-31.5 pts).

🔴 ROCE has fallen from 128.1% to 47.5% over 3 years (-80.6 pts).

🔴 Total Debt has grown at 38.5% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹36 Cr to -₹44 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1,799 Cr

Total Liabilities

₹1,552 Cr

Total Debt

₹266 Cr

Cash & Equivalents

₹18 Cr

Operating Cash Flow

-₹41 Cr

Capex

-₹3 Cr

Shareholding (proxy)

Institutional Holding

3.6%

Insider Holding

71.7%

Peer Comparison

Company	P/E	ROE
DLF LIMITED	36.6x	10.3%
GODREJ PROPERTIES LTD	30.2x	8.4%
OBEROI REALTY LIMITED	23.5x	14.7%

Recent News

6 general

PRANAV CONSTRUCTIONS LTD Share Price

Upstox, 16 Oct

Compare RAGHUNATH TO with

Equitymaster, 16 Oct

Pranav Constructions shares make strong market debut at 33% premium; should you buy, sell or hold?

Moneycontrol.com, 15 Sept

Pranav Constructions (NSEI:PRANAV) - Stock Analysis

Simply Wall Street, 30 Sept

Pranav Constructions stock tanks 37% in 2 days, slips below issue price

Business Standard, 16 Sept

Pranav Constructions Share News - Latest Updates, Live News & More

scanx.trade, 14 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

🟢Business QualityStrong13.9/20

🔴Financial HealthStretched8.7/20

🟢GrowthStrong14.9/20

🟡ProfitabilityModerate9.3/15

🟢ValuationAttractive11/15

🔴RiskHigh2.4/10

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.

This thesis breaks if

✓Revenue growth stays above 22% a year28.9% CAGR
✓EBITDA margin holds above 42%44.2%
✗Free cash flow remains positive-₹44 Cr
✓Debt / EBITDA stays below 2x0.8x
✓ROCE stays above 45%47.5%