Sadbhav Engineering Limited

Industrials — Engineering & Construction · NSE

₹7.20+₹0.23 (+3.30%)

DalalBaazaar Score

16 / 100

🔴 Poor

Verdict

HIGH RISK

Risk

Very High

Driven by negative shareholders' equity — the company owes more than it owns, micro-cap size, which brings thin liquidity.

In simple words: The company owes more than it owns — years of losses have wiped out its net worth, but sales are shrinking. Solvency — whether it can keep funding itself at all — is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:03 pm

Understanding the Business

Company site ↗

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

What does this company do?

Sadbhav Engineering Limited engages in the engineering, procurement, construction, and infrastructure development projects business in India.

IndustryEngineering & Construction

SectorIndustrials

Employees128

Annual revenue₹931 Cr

How does it make money?

Turns over ₹931 Cr a year. Of every ₹100 of sales, about ₹3 reaches shareholders as profit, with ₹70 left at the operating level before interest, tax and depreciation. Each of its 128 employees supports ₹7.28 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹7.28 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?Some evidence

ROCE of 66.6% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

Peer median ROE14.1%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -47% while net margin moved -108% 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-47%

Margin effect-108%

DalalBaazaar Score

16/ 100

Poor

Weighted across six categories. Every point is explained below.

✗ Shareholders' equity is negative — accumulated losses exceed the capital in the business

Quality vs. Valuation

Company Quality

15/ 100

Weak

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

Valuation

30/ 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

4.1x

Sector Median

30.1x

median of 3 sector peers

🟢Against its sector it trades 86% below the peer median of 30.1x.

vs. its own history

Not enough price and earnings history

vs. sector peers

Cheap

30.1x median of 3 peers · -86%

vs. generic bands

N/A

Multiples unreliable — equity base is negative

EV/EBITDA

5.2x

PEG

0.15

What's Good / What's Bad

🟢 What's Going Well2

Margins are improving
EBITDA margin is up from 43.1% to 70.0% over 3 years.
Debt is being paid down
Total debt is down 31% over 3 years.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

2 items require attention · 2 high

🔴Negative shareholders' equityFinancial
Liabilities exceed assets — accumulated losses have wiped out the company's net worth.
🔴Thin interest coverageFinancial
Operating profit covers interest only 1.4x — little room if earnings dip.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 43.1% to 70.0%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Deleveraging frees up earnings
Debt is down 31% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Cheaper than its peers
It trades 86% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.

🔴 Bear CaseWhat could go wrong?

Solvency comes before everything else
Liabilities exceed assets. Until net worth is rebuilt, the equity is a claim on a business that owes more than it owns, and further losses or a funding squeeze can leave shareholders with nothing.
The debt load needs earnings to hold up
Debt is 5.0x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
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.
Several serious flags at once
2 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

1EBITDA margin holds above 68%✓ 70.0%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 5.0x
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✗ 1.4x
How much operating profit can fall before interest stops being comfortably covered.
4Free cash flow remains positive✓ ₹677 Cr
Profit that never becomes cash eventually stops being profit.

Investment Checklist

6 / 10 checks passed

✗ Shareholders' equity is positive (assets exceed liabilities)
✓ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✓ 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 · 4 neutral · 3 weak

Market Cap

₹124 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

4.1x

Cheap

Cheap against the generic band

P/B Ratio

Not available

No data

Source didn't return this field

EPS (TTM)

₹1.74

Profitable

Profitable on a per-share basis

ROE

Not meaningful

Negative equity

Return on equity can't be read when equity itself is negative

ROCE

66.6%

Distorted

Distorted by the negative net worth — read this alongside the solvency flag, not on its own

Debt/Equity

Not meaningful

Negative equity

Shareholders' equity is negative, so this ratio can't be read

Revenue Growth (YoY)

-8.1%

Shrinking

Sales are contracting

Profit Growth (YoY)

28.2%

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

₹677 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

1.6x

Improving

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

Operating Margin

56.7%

Good

Healthy core-business profitability

Net Margin

3.1%

Average

Average bottom-line conversion

Current Ratio

1.06

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.83

Market-like

Moves roughly in line with the market

52W Range Position

13%

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

7.1 / 7.8

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

44.5

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1,769 Cr	₹1,876 Cr	₹993 Cr	₹931 Cr	-19.3%
EBITDA	₹762 Cr	₹571 Cr	₹517 Cr	₹652 Cr	-5.1%
EBITDA Margin	43.1%	30.4%	52.1%	70.0%	—
PAT (Net Profit)	-₹589 Cr	-₹630 Cr	-₹189 Cr	₹26 Cr	—
EPS	₹-34.34	₹-36.72	₹-11.04	₹1.53	—
ROCE	-2.9%	-28.0%	61.2%	66.6%	—
Total Debt	₹4,753 Cr	₹3,735 Cr	₹3,705 Cr	₹3,264 Cr	-11.8%
Free Cash Flow	₹1,714 Cr	₹1,297 Cr	₹290 Cr	₹677 Cr	-26.6%

🔴 Revenue has shrunk at 19.3% a year over 3 years.

🔴 EBITDA has shrunk at 5.1% a year over 3 years.

🟢 EBITDA Margin has risen from 43.1% to 70.0% over 3 years (+26.9 pts).

🟢 PAT (Net Profit) has turned positive, from -₹589 Cr to ₹26 Cr.

🟢 EPS has turned positive, from ₹-34.34 to ₹1.53.

🟢 ROCE has risen from -2.9% to 66.6% over 3 years (+69.4 pts).

🟢 Total Debt has shrunk at 11.8% a year over 3 years.

🔴 Free Cash Flow has shrunk at 26.6% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹5,860 Cr

Total Liabilities

₹5,869 Cr

Cash & Equivalents

₹8 Cr

Operating Cash Flow

₹749 Cr

Capex

-₹72 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

36.2%

Corporate Actions

Ex-Dividend Date

17 Sept 2019

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

1 mixed5 general

Sadbhav Engineering (SADBHAV) Share/Stock Price Live, NSE

TechGraph, 08 Oct

Compare SADBHAV ENGINEERING with

Equitymaster, 17 Oct

Sadbhav Engineering sets Sept 30 AGM; e-voting begins Sept 27

scanx.trade, 30 Sept

Sadbhav Engineering Ltd. Lower Circuit Today: Price, Data and Peers

Univest, 01 Oct

The Market Doesn't Like What It Sees From Sadbhav Engineering Limited's (NSE:SADBHAV) Revenues Yet As Shares Tumble 36%

Simply Wall Street, 06 FebPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Sadbhav Engineering Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 31 Aug

Watch Items

Revenue growth is negative (-8.1%) 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.
1 metric couldn't be retrieved for this stock — this is more common for smaller or thinly-covered listings.

DalalBaazaar Thesis

WeakBusiness Quality · Financial Health · Growth · Profitability · Valuation · Risk

Points for each in the Score ↑

Avoid until solvency is resolved

Sadbhav Engineering Limited owes more than it owns. Whatever the operating numbers show, the equity is a residual claim on a business with negative net worth, and that question has to be settled before any of the rest is worth weighing. 2 high-severity red flags sit above this conclusion and should be read first.

2 of 4 tripwires tripped — Debt / EBITDA falls below 3x; Interest cover stays above 3x · see Key things to watch ↑