RKEC Projects Limited

Industrials — Engineering & Construction · NSE

₹19.88+₹0.34 (+1.74%)

DalalBaazaar Score

51 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Very High

Driven by high debt relative to equity, negative free cash flow, the company is currently loss-making.

In simple words: The company is currently losing money, but sales are shrinking. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:07 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 RKEC Projects Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

RKEC Projects Limited, a construction company, engages in the civil and defense construction business in India. The company undertakes construction projects, such as bridges comprising major and minor bridges, steel and PSU girders, composite girders, and rail cum road bridges.

IndustryEngineering & Construction

SectorIndustrials

Employees513

Annual revenue₹422 Cr

How does it make money?

Turns over ₹422 Cr a year. Of every ₹100 of sales, about ₹5 reaches shareholders as profit, with ₹13 left at the operating level before interest, tax and depreciation. Each of its 513 employees supports ₹82.2 lakh of revenue a year, the signature of a people-led business.

EBITDA margin13.3%

Net margin4.7%

Revenue / employee₹82.2 lakh

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.

LARSEN & TOUBRO LTD.P/E 30.1x · ROE 15.2%

ADANI PORT & SEZ LTDP/E 29.9x · ROE 14.1%

SIEMENS LTDP/E 88.8x · ROE 10.5%

What is its competitive advantage?Some evidence

ROCE of 21.5% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

ROCE21.5%

ROE-32.3%

Peer median ROE14.1%

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 +100% while net margin moved +40% 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+100%

Margin effect+40%

DalalBaazaar Score

51/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Return on equity is negative
✓ ROE has improved by 5.4 points over the period

Quality vs. Valuation

Company Quality

54/ 100

Average

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

Valuation

54/ 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.

vs. its own history

Not enough price and earnings history

vs. sector peers

Not enough peers with a usable P/E

vs. generic bands

N/A

No P/E — the company is lossmaking

P/E (Trailing)

Not meaningful

P/B

0.34x

EV/EBITDA

4.5x

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 11.1% to 13.3% over 3 years.
Return on equity is rising
ROE has improved from 5.2% to 10.6%.
Return on capital is rising
ROCE has improved from 10.4% to 21.5%.
High return on capital employed
ROCE of 21.5% 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 Attention3

Debt is rising
Total debt is up 50% over 3 years — worth checking what it funded.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Inventory building faster than sales
Inventory is up 178% against revenue growth of 100% — stock may not be moving.

Red Flags

5 items require attention · 5 high

🔴Debt has risen sharplyFinancial
Total debt is up 50% over 3 years, from ₹141 Cr to ₹212 Cr.
🔴High leverageFinancial
Debt/Equity of 1.72x — earnings must service borrowings before shareholders see anything.
🔴Free cash flow negative for 3 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴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.
🔴Inventory building faster than salesFinancial
Inventory up 178% against revenue up 100% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 21.5% 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.
Margin expansion has further to run
EBITDA margin has risen from 11.1% to 13.3%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
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?

The debt load needs earnings to hold up
Debt is 3.8x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
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
5 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 20% a year✓ 26.1% CAGR
Latest reported year was -77.2%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 11%✓ 13.3%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA falls below 3x✗ 3.8x
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✗ -₹54 Cr
Profit that never becomes cash eventually stops being profit.
5Interest cover stays above 3x✗ 2.8x
How much operating profit can fall before interest stops being comfortably covered.

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

2 good · 3 neutral · 6 weak

Market Cap

₹48 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

Not meaningful

Loss-making

Earnings are negative, so a P/E multiple can't be read here

P/B Ratio

0.34x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹-13.52

Loss-making

Negative earnings per share — the business is losing money

ROE

-32.3%

Weak

Weak capital efficiency

ROCE

21.5%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

1.72x

High

High leverage

Revenue Growth (YoY)

-77.2%

Shrinking

Sales are contracting

Profit Growth (YoY)

0.4%

Modest

Slow profit growth

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹53 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹19.88

ROA

-6.5%

Weak

Assets generate little profit

Operating Margin

-120.0%

Weak

Thin margins leave little room for error

Net Margin

-45.6%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.18

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

1.01

Market-like

Moves roughly in line with the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

20.7 / 21.7

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

25.9

Oversold zone

Financial Trend (4-Year)

Metric	FY22	FY23	FY24	FY25	3Y CAGR
Revenue	₹210 Cr	₹278 Cr	₹336 Cr	₹422 Cr	+26.1%
EBITDA	₹23 Cr	₹44 Cr	₹52 Cr	₹56 Cr	+33.7%
EBITDA Margin	11.1%	15.7%	15.5%	13.3%	—
PAT (Net Profit)	₹7 Cr	₹12 Cr	₹20 Cr	₹20 Cr	+41.2%
EPS	₹2.97	₹5.18	₹8.32	—	—
ROE	5.2%	8.4%	11.8%	10.6%	—
ROCE	10.4%	20.9%	20.7%	21.5%	—
Total Debt	₹141 Cr	₹116 Cr	₹150 Cr	₹212 Cr	+14.5%
Free Cash Flow	₹10 Cr	-₹11 Cr	-₹2 Cr	-₹54 Cr	—

🟢 Revenue has grown at 26.1% a year over 3 years.

🟢 EBITDA has grown at 33.7% a year over 3 years.

🟢 EBITDA Margin has risen from 11.1% to 13.3% over 3 years (+2.1 pts).

🟢 PAT (Net Profit) has grown at 41.2% a year over 3 years.

🟢 ROE has risen from 5.2% to 10.6% over 3 years (+5.4 pts).

🟢 ROCE has risen from 10.4% to 21.5% over 3 years (+11.1 pts).

🔴 Total Debt has grown at 14.5% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹10 Cr to -₹54 Cr.

Balance Sheet & Cash Flow — FY2025

Total Assets

₹581 Cr

Total Liabilities

₹392 Cr

Total Debt

₹212 Cr

Cash & Equivalents

₹10 Cr

Operating Cash Flow

₹4 Cr

Capex

-₹58 Cr

Corporate Actions

Ex-Dividend Date

16 Sept 2021

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

RKEC Projects Share Price

Upstox, 16 Oct

RKEC Projects Ltd (NSE: RKEC) Gains 12.52% as Stock Draws Market Attention

Kalkine India, 25 Sept

RKEC Projects Share Analyst Review 2026: Price Target and Outlook

Univest, 12 JunAnalyst view

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

RKEC Projects Ltd. Key Financial Ratios – Valuation, Profitability & More

Value Research, 01 Sept

Investors Give RKEC Projects Limited (NSE:RKEC) Shares A 25% Hiding

Simply Wall Street, 24 Nov

RKEC Projects Gains 2.28% to ₹22.83; Infrastructure Stock Holds Key Support on NSE - Earnings Breakout Stocks

https://www.siam.in/, 30 AugResults

🟡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 (-77.2%) on the latest reported period — check if this is one-off or a trend.
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.
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 QualityAdequate12.6/20

🔴Financial HealthStretched7.9/20

🟢GrowthStrong14.9/20

🔴ProfitabilityWeak5/15

🟡ValuationFair7.1/15

🔴RiskHigh3.4/10

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

This thesis breaks if

✓Revenue growth stays above 20% a year26.1% CAGR
✓EBITDA margin holds above 11%13.3%
✗Debt / EBITDA falls below 3x3.8x
✗Free cash flow remains positive-₹54 Cr
✗Interest cover stays above 3x2.8x