Pratham EPC Projects Limited

Sector n/a · NSE

₹302.35−₹3.20 (−1.05%)

DalalBaazaar Score

41 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

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

In simple words: The business is earning a fairly low return on the money invested in it, though profits are falling even as sales grow. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:05 pm

Caution warranted. Multiple fundamental metrics — flagged in red below — point to either valuation stretch, leverage risk, or weakening profitability. This doesn't mean avoid the stock outright, but it does mean the burden of proof is on the growth story to justify the current price.

Understanding the Business

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

How does it make money?

Turns over ₹140 Cr a year. Of every ₹100 of sales, about ₹4 reaches shareholders as profit, with ₹10 left at the operating level before interest, tax and depreciation.

EBITDA margin10.1%

Net margin4.4%

What is its competitive advantage?Little sign of one

Returns on capital of 10.4% 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.

ROCE10.4%

ROE6.8%

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 +179% while net margin moved -71% 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+179%

Margin effect-71%

DalalBaazaar Score

41/ 100

Moderate

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

41/ 100

Weak

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

Valuation

18/ 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.

vs. its own history

Not enough price and earnings history

vs. sector peers

Not enough peers with a usable P/E

vs. generic bands

No P/E available

P/E (Trailing)

—

P/B

—

EV/EBITDA

42.0x

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well1

Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention6

Margins are compressing
EBITDA margin has slipped from 24.2% to 10.1% over 3 years.
Debt is rising
Total debt is up 263% 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 42.5% to 6.8% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 48.4% to 10.4% — often a sign of competition or overexpansion.
Inventory building faster than sales
Inventory is up 620% against revenue growth of 179% — stock may not be moving.

Red Flags

5 items require attention · 4 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 263% over 3 years, from ₹14 Cr to ₹52 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 14.1 points, from 24.2% to 10.1%.
🔴Inventory building faster than salesFinancial
Inventory up 620% against revenue up 179% — stock may not be moving.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 26.8x to 2.9x.

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 24.2% to 10.1%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The debt load needs earnings to hold up
Debt is 3.6x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Returns on shareholder capital are falling
ROE has dropped from 42.5% to 6.8%. 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
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

1Revenue growth stays above 31% a year✓ 40.8% CAGR
Latest reported year was 17.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 8%✓ 10.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA falls below 3x✗ 3.6x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
4Free cash flow remains positive✗ -₹43 Cr
Profit that never becomes cash eventually stops being profit.
5Interest cover stays above 3x✗ 2.9x
How much operating profit can fall before interest stops being comfortably covered.

Investment Checklist

3 / 9 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
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

2 good · 6 neutral · 3 weak

Market Cap

₹551 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

Not available

No data

Source didn't return this field

P/B Ratio

Not available

No data

Source didn't return this field

EPS (TTM)

Not available

No data

Source didn't return this field

ROE

6.8%

Weak

Weak capital efficiency

ROCE

10.4%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.57x

Low

Conservative leverage

Revenue Growth (YoY)

17.9%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-55.3%

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

-₹43 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹302.35

Gross Margin

57.4%

Proxy

Operating margin unavailable — showing gross margin instead

Net Margin

4.4%

Average

Average bottom-line conversion

Current Ratio

1.27

Comfortable

Healthy short-term liquidity

Technical Snapshot

SMA 20 / SMA 50

119.3 / 119.9

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

22.7

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹50 Cr	₹70 Cr	₹119 Cr	₹140 Cr	+40.8%
EBITDA	₹12 Cr	₹16 Cr	₹21 Cr	₹14 Cr	+5.2%
EBITDA Margin	24.2%	23.2%	17.2%	10.1%	—
PAT (Net Profit)	₹8 Cr	₹10 Cr	₹14 Cr	₹6 Cr	-7.0%
EPS	₹4.31	₹7.56	₹7.72	—	—
ROE	42.5%	16.5%	18.5%	6.8%	—
ROCE	48.4%	23.3%	23.6%	10.4%	—
Total Debt	₹14 Cr	₹4 Cr	₹12 Cr	₹52 Cr	+53.7%
Free Cash Flow	-₹11 Cr	-₹13 Cr	-₹16 Cr	-₹43 Cr	—

🟢 Revenue has grown at 40.8% a year over 3 years.

🟢 EBITDA has grown at 5.2% a year over 3 years.

🔴 EBITDA Margin has fallen from 24.2% to 10.1% over 3 years (-14.1 pts).

🔴 PAT (Net Profit) has shrunk at 7.0% a year over 3 years.

🔴 ROE has fallen from 42.5% to 6.8% over 3 years (-35.8 pts).

🔴 ROCE has fallen from 48.4% to 10.4% over 3 years (-37.9 pts).

🔴 Total Debt has grown at 53.7% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹201 Cr

Total Liabilities

₹110 Cr

Total Debt

₹52 Cr

Cash & Equivalents

₹8 Cr

Operating Cash Flow

-₹18 Cr

Capex

-₹26 Cr

Recent News

1 mixed5 general

Pratham EPC Projects Ltd Key Financial Ratios – Valuation, Profitability & More

Value Research, 21 Sept

Pratham EPC Projects Q1 FY27 Results Preview

Univest, 10 JulResults

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

Pratham EPC Projects (NSEI:PRATHAM) - Stock Analysis

Simply Wall Street, 31 Mar

Pratham EPC Projects share price makes a stellar debut, stock opens with 51% premium at ₹113.30 apiece on NSE SME

Livemint, 18 Mar

PRATHAM EPC PROJECTS LTD Share Price

Upstox, 03 Apr

Pratham EPC makes solid debut on NSE SME, lists at 51% premium on IPO price

Moneycontrol.com, 18 Mar

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
Sector/industry classification unavailable — verify manually for peer comparison.
3 metrics couldn't be retrieved for this stock — this is more common for smaller or thinly-covered listings.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

🔴Business QualityWeak7.5/20

🟡Financial HealthAdequate9.8/20

🔴GrowthWeak8.9/20

🔴ProfitabilityWeak4.6/15

🟡ValuationFair7.5/15

🔴RiskHigh2.4/10

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.

This thesis breaks if

✓Revenue growth stays above 31% a year40.8% CAGR
✓EBITDA margin holds above 8%10.1%
✗Debt / EBITDA falls below 3x3.6x
✗Free cash flow remains positive-₹43 Cr
✗Interest cover stays above 3x2.9x