PSP Projects Limited

Industrials — Engineering & Construction · NSE

₹771.35−₹11.15 (−1.42%)

DalalBaazaar Score

44 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Low

Driven by 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. 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 PSP Projects Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

PSP Projects Limited, a construction company, provides construction and allied services for industrial, institutional, commercial, residential, hospitality, hospital, and landmark government projects in India.

IndustryEngineering & Construction

SectorIndustrials

Employees2,383

Annual revenue₹3,119 Cr

How does it make money?

Turns over ₹3,119 Cr a year. Of every ₹100 of sales, about ₹2 reaches shareholders as profit, with ₹6 left at the operating level before interest, tax and depreciation. Each of its 2,383 employees supports ₹1.31 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.31 Cr

Who are its competitors?

The closest listed comparisons in its industry are LARSEN & TOUBRO LTD., ADANI PORT & SEZ LTD, SIEMENS 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 8.5% 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 ROE14.1%

What is the outlook?

6 analysts covering the stock expect revenue to grow about 22.8% and earnings to grow about 38.0% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+22.8%

Est. earnings growth+38.0%

Analysts6

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +62% while net margin moved -74% 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+62%

Margin effect-74%

DalalBaazaar Score

44/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROCE of 8.5% is below 10% — capital is not working hard
✗ ROCE has fallen by 16.3 points — returns are eroding
✗ EBITDA margin of 6.4% is thin — little cushion if costs rise
✗ Net margin of 2.1% is slim
• Revenue has compounded at 17.4% a year, which is the base these returns are earned on

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

41.6x

3Y Median

21.8x

40 monthly readings · mean 34.6x · range 17.6x–69.9x

Sector Median

30.1x

median of 3 sector peers

⚠️Current valuation is approximately 91% above its 3y median of 21.8x. 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 38% above the peer median of 30.1x.

vs. its own history

Expensive

21.8x median over 40 months · +91%

vs. sector peers

Expensive

30.1x median of 3 peers · +38%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

15.8x

PEG

—

What's Good / What's Bad

🟢 What's Going Well3

Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
Very low debt
Debt/Equity of 0.26x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 16.5% to 4.4% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 24.8% to 8.5% — often a sign of competition or overexpansion.

Red Flags

5 items require attention · 3 high · 2 watch

🔴Debt has risen sharplyFinancial
Total debt is up 128% over 3 years, from ₹145 Cr to ₹330 Cr.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 6.5 points, from 12.9% to 6.4%.
🔴Inventory building faster than salesFinancial
Inventory up 127% against revenue up 62% — stock may not be moving.
🟡Profit is decliningFinancial
Net profit is down 58% over 3 years.
🟡Receivables growing faster than salesFinancial
Receivables up 111% against revenue up 62% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Self-funding with balance-sheet headroom
Positive free cash flow of ₹130 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.
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 12.9% to 6.4%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Sales are being booked faster than collected
Receivables are up 111% against revenue up 62%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
The price already assumes success
The stock trades 91% 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.
Returns on shareholder capital are falling
ROE has dropped from 16.5% to 4.4%. 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.

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

1Revenue growth stays above 13% a year✓ 17.4% CAGR
Latest reported year was 64.8%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 4%✓ 6.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Interest cover stays above 3x✓ 3.1x
How much operating profit can fall before interest stops being comfortably covered.
4Free cash flow remains positive✓ ₹130 Cr
Profit that never becomes cash eventually stops being profit.
5Debt / EBITDA stays below 2x✓ 1.7x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.

Investment Checklist

6 / 12 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
✗ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

5 good · 4 neutral · 2 weak

Market Cap

₹3,058 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

41.6x

Expensive

Expensive — verify against sector peers

P/B Ratio

2.42x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹18.52

Profitable

Profitable on a per-share basis

ROE

4.4%

Weak

Weak capital efficiency

ROCE

8.5%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.26x

Low

Conservative leverage

Revenue Growth (YoY)

64.8%

Healthy

Healthy top-line growth

Profit Growth (YoY)

4109.1%

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

₹130 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

15.4x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

3.7%

Weak

Thin margins leave little room for error

Net Margin

2.1%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.34

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.61

Defensive

Steadier than the market

52W Range Position

35%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

781.8 / 849.8

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

41.3

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1,925 Cr	₹2,488 Cr	₹2,493 Cr	₹3,119 Cr	+17.4%
EBITDA	₹247 Cr	₹274 Cr	₹190 Cr	₹198 Cr	-7.1%
EBITDA Margin	12.9%	11.0%	7.6%	6.4%	—
PAT (Net Profit)	₹132 Cr	₹123 Cr	₹56 Cr	₹56 Cr	-25.1%
EPS	₹36.65	₹34.16	₹14.32	₹14	-27.4%
ROE	16.5%	13.4%	4.7%	4.4%	—
ROCE	24.8%	21.8%	9.3%	8.5%	—
Total Debt	₹145 Cr	₹455 Cr	₹272 Cr	₹330 Cr	+31.6%
Free Cash Flow	-₹34 Cr	-₹366 Cr	-₹15 Cr	₹130 Cr	—

🟢 Revenue has grown at 17.4% a year over 3 years.

🔴 EBITDA has shrunk at 7.1% a year over 3 years.

🔴 EBITDA Margin has fallen from 12.9% to 6.4% over 3 years (-6.5 pts).

🔴 PAT (Net Profit) has shrunk at 25.1% a year over 3 years.

🔴 EPS has shrunk at 27.4% a year over 3 years.

🔴 ROE has fallen from 16.5% to 4.4% over 3 years (-12.1 pts).

🔴 ROCE has fallen from 24.8% to 8.5% over 3 years (-16.3 pts).

🔴 Total Debt has grown at 31.6% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹34 Cr to ₹130 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹3,089 Cr

Total Liabilities

₹1,825 Cr

Cash & Equivalents

₹260 Cr

Operating Cash Flow

₹323 Cr

Capex

-₹193 Cr

Shareholding (proxy)

Institutional Holding

3.0%

Insider Holding

71.1%

Corporate Actions

Ex-Dividend Date

01 Sept 2023

Analyst Consensus

Recommendations

3 Buy · 0 Hold · 5 Sell

Target Price (Mean)

₹872.13

+13.1% vs CMP

Target Range

₹540 – ₹1,300

Peer Comparison

Company	P/E	ROE
LARSEN & TOUBRO LTD.	30.1x	15.2%
ADANI PORT & SEZ LTD	29.9x	14.1%
SIEMENS LTD	88.8x	10.5%

Recent News

2 mixed4 general

PSP Projects (PSPPROJECT) Share/Stock Price Live, NSE

TechGraph, 12 Oct

PSP Projects (NSEI:PSPPROJECT) Stock Forecast & Analyst Predictions

Simply Wall Street, 30 SeptAnalyst view

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

PSPPROJECT Forecast — Price Target — Prediction for 2027

TradingView, 25 JunAnalyst view

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

PSP Projects Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 28 Aug

Buy PSP Projects; target of Rs 1028: Prabhudas Lilladher

Moneycontrol.com, 24 Mar

PSP Projects Share Price Forecast: 3 Year Outlook to 2030

Univest, 23 Jul

Watch Items

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

DalalBaazaar Thesis

StrongFinancial Health

MiddlingGrowth · Risk

WeakBusiness Quality · Profitability · Valuation

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.

All 5 tripwires holding · see Key things to watch ↑