Prozone Realty Limited

Real Estate — Real Estate - Diversified · NSE

₹55.30+₹1.49 (+2.77%)

DalalBaazaar Score

42 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

Driven by moderate debt load, micro-cap size, which brings thin liquidity, a very high earnings multiple, which leaves little margin for disappointment.

In simple words: The business is earning a fairly low return on the money invested in it, but sales are shrinking. Valuation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:46 pm

Understanding the Business

Company site ↗

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

What does this company do?

Prozone Realty Limited engages in the design, development, ownership, and operation of shopping malls and commercial and residential properties in India. It operates through Leasing and Outright Sales segments.

IndustryReal Estate - Diversified

SectorReal Estate

Employees14

Annual revenue₹195 Cr

How does it make money?

Turns over ₹195 Cr a year. Of every ₹100 of sales, about ₹5 reaches shareholders as profit, with ₹46 left at the operating level before interest, tax and depreciation. Each of its 14 employees supports ₹13.94 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹13.94 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.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 5.7% 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 ROE10.3%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +13% while net margin moved -63% 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+13%

Margin effect-63%

DalalBaazaar Score

42/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue CAGR of only 4.1% — barely ahead of inflation
✗ Profit has declined at 25.0% a year
✗ Profit is compounding slower than revenue — margins are being squeezed as the business grows
✗ Latest-year revenue growth of -60.1% is below the longer-term trend — momentum is fading

Quality vs. Valuation

Company Quality

44/ 100

Weak

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

Valuation

29/ 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

251.4x

3Y Median

94.3x

40 monthly readings · mean 95.8x · range 16.6x–232.9x

Sector Median

30.2x

median of 3 sector peers

⚠️Current valuation is approximately 166% above its 3y median of 94.3x. 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 733% above the peer median of 30.2x.

vs. its own history

Expensive

94.3x median over 40 months · +166%

vs. sector peers

Expensive

30.2x median of 3 peers · +733%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

15.9x

PEG

—

Red Flags

4 items require attention · 3 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 56% over 3 years, from ₹420 Cr to ₹658 Cr.
🔴Thin interest coverageFinancial
Operating profit covers interest only 1.7x — little room if earnings dip.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 20.3 points, from 66.3% to 46.0%.
🟡Profit is decliningFinancial
Net profit is down 58% over 3 years.

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 66.3% to 46.0%. 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 7.3x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
The price already assumes success
The stock trades 166% 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.
Growth barely outpaces inflation
Revenue compounding at 4.1% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
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.

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

1EBITDA margin holds above 44%✓ 46.0%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 7.3x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Interest cover stays above 3x✗ 1.7x
How much operating profit can fall before interest stops being comfortably covered.
4Revenue growth stays above 4% a year✓ 4.1% CAGR
Latest reported year was -60.1%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
5Free cash flow remains positive✓ ₹69 Cr
Profit that never becomes cash eventually stops being profit.

Investment Checklist

5 / 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

3 good · 4 neutral · 4 weak

Market Cap

₹844 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

251.4x

Expensive

Expensive — verify against sector peers

P/B Ratio

1.83x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹0.22

Profitable

Profitable on a per-share basis

ROE

2.3%

Weak

Weak capital efficiency

ROCE

5.7%

Weak

Low return on total capital employed

Debt/Equity

1.35x

Moderate

Moderate leverage

Revenue Growth (YoY)

-60.1%

Shrinking

Sales are contracting

Profit Growth (YoY)

80.0%

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

₹69 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

-40.3%

Weak

Thin margins leave little room for error

Net Margin

5.6%

Average

Average bottom-line conversion

Current Ratio

1.97

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.81

Market-like

Moves roughly in line with the market

52W Range Position

47%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

53.7 / 48.9

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

42.1

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹173 Cr	₹185 Cr	₹179 Cr	₹195 Cr	+4.1%
EBITDA	₹115 Cr	₹69 Cr	₹72 Cr	₹90 Cr	-7.9%
EBITDA Margin	66.3%	37.5%	40.4%	46.0%	—
PAT (Net Profit)	₹25 Cr	₹5 Cr	-₹38 Cr	₹11 Cr	-25.0%
EPS	₹1.66	₹0.3	₹-2.49	₹0.7	-25.0%
ROE	4.9%	0.9%	-8.1%	2.3%	—
ROCE	7.0%	3.6%	2.9%	5.7%	—
Total Debt	₹420 Cr	₹422 Cr	₹425 Cr	₹658 Cr	+16.1%
Free Cash Flow	₹79 Cr	₹60 Cr	₹32 Cr	₹69 Cr	-4.5%

🟢 Revenue has grown at 4.1% a year over 3 years.

🔴 EBITDA has shrunk at 7.9% a year over 3 years.

🔴 EBITDA Margin has fallen from 66.3% to 46.0% over 3 years (-20.3 pts).

🔴 PAT (Net Profit) has shrunk at 25.0% a year over 3 years.

🔴 EPS has shrunk at 25.0% a year over 3 years.

🔴 ROE has fallen from 4.9% to 2.3% over 3 years (-2.6 pts).

🔴 ROCE has fallen from 7.0% to 5.7% over 3 years (-1.3 pts).

🔴 Total Debt has grown at 16.1% a year over 3 years.

🔴 Free Cash Flow has shrunk at 4.5% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1,418 Cr

Total Liabilities

₹930 Cr

Cash & Equivalents

₹71 Cr

Operating Cash Flow

₹74 Cr

Capex

-₹5 Cr

Shareholding (proxy)

Institutional Holding

1.5%

Insider Holding

65.3%

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

2 mixed4 general

Prozone Realty Share Price

Upstox, 16 Oct

Arihant Superstructures vs Eldeco Housing vs Prozone Realty: Which Stock Should You Track

Univest, 16 Oct

Prozone Realty sells subsidiaries to Inorbit Malls for ₹1,242.50 crore

scanx.trade, 24 Aug

Prozone Realty Share Price Target 2027 to 2030: Analyst Outlook

Univest, 18 AugAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Inorbit Malls completes acquisition of 2 malls for Rs 1242.5 cr

The Economic Times, 25 AugM&A

🟡Mixed / dependsAcquisitions change the balance sheet before they change the earnings. Look at what was paid, how it was funded, and whether debt rose.

NSE closes Prozone Realty promoter reclassification application

scanx.trade, 14 Aug

Watch Items

Revenue growth is negative (-60.1%) 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

MiddlingBusiness Quality · Financial Health

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

2 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Interest cover stays above 3x · see Key things to watch ↑