Prerna Infrabuild Limited

Real Estate — Real Estate - Development · BSE

₹22.88−₹0.19 (−0.82%)

DalalBaazaar Score

49 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Moderate

Driven by 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, but sales are shrinking. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:09 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

Company site ↗

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

What does this company do?

Prerna Infrabuild Limited engages in the real estate business in India. The company develops commercial properties and residential buildings. The company was formerly known as Prerna Finsafe Ltd. Prerna Infrabuild Limited was incorporated in 1988 and is based in Ahmedabad, India.

IndustryReal Estate - Development

SectorReal Estate

Annual revenue₹9 Cr

How does it make money?

Turns over ₹9 Cr a year. Of every ₹100 of sales, about ₹34 reaches shareholders as profit, with ₹33 left at the operating level before interest, tax and depreciation.

EBITDA margin33.1%

Net margin34.1%

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?Little sign of one

Returns on capital of 3.3% 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.

ROCE3.3%

ROE3.1%

Peer median ROE10.3%

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved -48% while net margin moved -37% 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-48%

Margin effect-37%

DalalBaazaar Score

49/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 19.4% a year
✗ Profit has declined at 30.8% a year

Quality vs. Valuation

Company Quality

46/ 100

Average

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

Valuation

62/ 100

Fair

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

22.9x

3Y Median

21.9x

40 monthly readings · mean 31.0x · range 3.0x–85.5x

Sector Median

30.2x

median of 3 sector peers

🟡Currently trading close to its 3y median of 21.9x — the market is paying about what it usually pays for this company.

🟢Against its sector it trades 24% below the peer median of 30.2x.

vs. its own history

Fair

21.9x median over 40 months · +5%

vs. sector peers

Cheap

30.2x median of 3 peers · -24%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

22.9x

P/B

0.78x

EV/EBITDA

41.2x

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 69.9% to 33.1% over 3 years.
Debt is rising
Total debt is up 28% 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 20.4% to 3.1% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 18.7% to 3.3% — often a sign of competition or overexpansion.
Inventory building faster than sales
Inventory is up 23% against revenue growth of -48% — stock may not be moving.

Red Flags

7 items require attention · 3 high · 4 watch

🔴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.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 36.8 points, from 69.9% to 33.1%.
🔴Inventory building faster than salesFinancial
Inventory up 23% against revenue up -48% — stock may not be moving.
🟡Debt is increasingFinancial
Total debt is up 28% over 3 years.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹35 Cr in the latest year.
🟡Profit is decliningFinancial
Net profit is down 67% over 3 years.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 109% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Cheaper than its peers
It trades 24% 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 69.9% to 33.1%. 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 15.1x 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 20.4% to 3.1%. 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.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 31%✓ 33.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 15.1x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Free cash flow remains positive✗ -₹35 Cr
Profit that never becomes cash eventually stops being profit.
4ROCE stays above 8%✗ 3.3%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Interest cover stays above 4x✓ 4.9x
How much operating profit can fall before interest stops being comfortably covered.

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

₹83 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

22.9x

Fair

Fairly valued against the generic band

P/B Ratio

0.78x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹1

Profitable

Profitable on a per-share basis

ROE

3.1%

Weak

Weak capital efficiency

ROCE

3.3%

Weak

Low return on total capital employed

Debt/Equity

0.45x

Low

Conservative leverage

Revenue Growth (YoY)

-9.3%

Shrinking

Sales are contracting

Profit Growth (YoY)

140.7%

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

-₹35 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹22.88

Operating Margin

-11.5%

Weak

Thin margins leave little room for error

Net Margin

33.2%

Good

Strong bottom-line conversion

Current Ratio

11.36

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.10

Defensive

Steadier than the market

52W Range Position

28%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

23.6 / 24.2

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

46.4

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹18 Cr	₹45 Cr	₹10 Cr	₹9 Cr	-19.4%
EBITDA	₹13 Cr	₹9 Cr	₹3 Cr	₹3 Cr	-37.2%
EBITDA Margin	69.9%	19.7%	31.7%	33.1%	—
PAT (Net Profit)	₹10 Cr	₹5 Cr	₹1 Cr	₹3 Cr	-30.8%
EPS	₹8.12	₹1.44	₹0.37	₹0.9	-52.0%
ROE	20.4%	5.1%	1.3%	3.1%	—
ROCE	18.7%	6.9%	2.5%	3.3%	—
Total Debt	₹37 Cr	₹34 Cr	₹26 Cr	₹48 Cr	+8.4%
Free Cash Flow	-₹14 Cr	₹32 Cr	₹40 Cr	-₹35 Cr	—

🔴 Revenue has shrunk at 19.4% a year over 3 years.

🔴 EBITDA has shrunk at 37.2% a year over 3 years.

🔴 EBITDA Margin has fallen from 69.9% to 33.1% over 3 years (-36.8 pts).

🔴 PAT (Net Profit) has shrunk at 30.8% a year over 3 years.

🔴 EPS has shrunk at 52.0% a year over 3 years.

🔴 ROE has fallen from 20.4% to 3.1% over 3 years (-17.3 pts).

🔴 ROCE has fallen from 18.7% to 3.3% over 3 years (-15.4 pts).

🔴 Total Debt has grown at 8.4% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹158 Cr

Total Liabilities

₹52 Cr

Total Debt

₹48 Cr

Cash & Equivalents

₹1 Cr

Operating Cash Flow

-₹35 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

74.0%

Corporate Actions

Ex-Dividend Date

21 Jul 2011

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

1 positive3 mixed1 negative1 general

Prerna Infrabuild discloses detailed AGM voting results for FY26

scanx.trade, 28 SeptResults

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

Prerna Infrabuild Limited Submits SEBI Compliance Certificate for Quarter Ended March 31, 2026

scanx.trade, 13 AprResults

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

Prerna Infrabuild Ltd Downgraded to Strong Sell Amid Mixed Financials and Technical Weakness

MarketsMojo, 02 JulAnalyst view

🔴Potentially negativeAn analyst opinion changing, which moves the price without changing the business.

Minda Corporation consolidated net profit rises 215.46% in the June 2026 quarter

Business Standard, 13 AugResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Supreme Holdings & Hospitality (India) (NSEI:SUPREME) - Stock Analysis

Simply Wall Street, 26 Mar

Q4 Results Today: SBI, Swiggy, Hyundai Motor, Urban Company Over 75 Companies To Declare Earnings

NDTV Profit, 08 MayResults

🟡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

Revenue growth is negative (-9.3%) on the latest reported period — check if this is one-off or a trend.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🟡Business QualityAdequate11.5/20

🟢Financial HealthStrong13/20

🔴GrowthWeak2.4/20

🟡ProfitabilityModerate7.5/15

🟢ValuationAttractive10.6/15

🔴RiskHigh4/10

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

This thesis breaks if

✓EBITDA margin holds above 31%33.1%
✗Debt / EBITDA falls below 3x15.1x
✗Free cash flow remains positive-₹35 Cr
✗ROCE stays above 8%3.3%
✓Interest cover stays above 4x4.9x