Shera Energy Limited

Sector n/a · NSE

₹192.90+₹4.65 (+2.47%)

DalalBaazaar Score

58 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

High

Driven by moderate debt load, negative free cash flow, micro-cap size, which brings thin liquidity.

In simple words: Strong business and financial position, with both sales and profits growing well. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:00 pm

Understanding the Business

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

How does it make money?

Turns over ₹1,637 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.

What is its competitive advantage?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 25.9%. Returns that high normally get competed away; when they persist, something is protecting them. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

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 +135% 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+135%

Margin effect+37%

DalalBaazaar Score

58/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

64/ 100

Average

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

Valuation

88/ 100

Cheap

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

No P/E available

EV/EBITDA

7.8x

PEG

—

What's Good / What's Bad

🟢 What's Going Well4

Return on equity is rising
ROE has improved from 10.2% to 15.2%.
Return on capital is rising
ROCE has improved from 17.8% to 25.9%.
High return on capital employed
ROCE of 25.9% 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 Attention0

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

Red Flags

2 items require attention · 1 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 132% over 3 years, from ₹113 Cr to ₹262 Cr.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹66 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 25.9% 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.
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?

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 25% a year✓ 33.0% CAGR
Latest reported year was 28.2%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 4%✓ 5.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA stays below 2x✗ 2.8x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4Free cash flow remains positive✗ -₹66 Cr
Profit that never becomes cash eventually stops being profit.
5Interest cover stays above 3x✗ 2.4x
How much operating profit can fall before interest stops being comfortably covered.

Investment Checklist

6 / 9 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
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

4 good · 6 neutral · 1 weak

Market Cap

₹471 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

Not available

No data

Source didn't return this field

P/B Ratio

Not available

No data

Source didn't return this field

EPS (TTM)

Not available

No data

Source didn't return this field

ROE

15.2%

Strong

Strong capital efficiency

ROCE

25.9%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

1.35x

Moderate

Moderate leverage

Revenue Growth (YoY)

28.2%

Healthy

Healthy top-line growth

Profit Growth (YoY)

65.2%

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

-₹66 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Gross Margin

8.1%

Proxy

Operating margin unavailable — showing gross margin instead

Net Margin

1.8%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.31

Comfortable

Healthy short-term liquidity

Technical Snapshot

SMA 20 / SMA 50

189.8 / 182.2

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

59.4

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹696 Cr	₹875 Cr	₹1,277 Cr	₹1,637 Cr	+33.0%
EBITDA	₹33 Cr	₹53 Cr	₹56 Cr	₹93 Cr	+41.4%
EBITDA Margin	4.7%	6.0%	4.4%	5.7%	—
PAT (Net Profit)	₹9 Cr	₹12 Cr	₹18 Cr	₹29 Cr	+47.8%
EPS	₹4.46	₹5.21	—	—	—
ROE	10.2%	11.1%	11.6%	15.2%	—
ROCE	17.8%	27.4%	19.5%	25.9%	—
Total Debt	₹113 Cr	₹120 Cr	₹186 Cr	₹262 Cr	+32.3%
Free Cash Flow	₹7 Cr	₹16 Cr	-₹65 Cr	-₹66 Cr	—

🟢 Revenue has grown at 33.0% a year over 3 years.

🟢 EBITDA has grown at 41.4% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 5.7% over 3 years.

🟢 PAT (Net Profit) has grown at 47.8% a year over 3 years.

🟢 ROE has risen from 10.2% to 15.2% over 3 years (+5.0 pts).

🟢 ROCE has risen from 17.8% to 25.9% over 3 years (+8.1 pts).

🔴 Total Debt has grown at 32.3% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹7 Cr to -₹66 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹793 Cr

Total Liabilities

₹545 Cr

Cash & Equivalents

₹5 Cr

Operating Cash Flow

-₹5 Cr

Capex

-₹61 Cr

Recent News

2 mixed4 general

If EPS Growth Is Important To You, Shera Energy (NSE:SHERA) Presents An Opportunity

Simply Wall Street, 23 Jul

Shera Energy Share Price rise: valuation and sector view

Univest, 28 SeptPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Shera Energy Ltd. Peer Comparison – Compare with Others

Value Research, 31 Aug

Shera Energy eyes 25-30% revenue growth in FY27, bets on capacity expansion

Business Standard, 16 AugCapacity

🟡Mixed / dependsCapacity additions can raise revenue over two to three years, but the capital spend usually pressures free cash flow first. Worth checking whether the capex is funded from operations or from borrowing.

Shera Energy allots 45 lakh warrants at ₹118 to raise ₹53.1 crore

scanx.trade, 14 Jul

Shera Energy's (NSE:SHERA) Shareholders May Want To Dig Deeper Than Statutory Profit

Simply Wall Street, 16 Nov

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
Sector/industry classification unavailable — verify manually for peer comparison.
3 metrics couldn't be retrieved for this stock — this is more common for smaller or thinly-covered listings.

DalalBaazaar Thesis

StrongGrowth · Profitability

MiddlingBusiness Quality · Valuation

WeakFinancial Health · Risk

Points for each in the Score ↑

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. 1 high-severity red flag sits above this conclusion and should be read first.

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