Shervani Industrial Syndicate Limited

Real Estate — Real Estate - Development · NSE

₹312.00₹0.00 (0.00%)

DalalBaazaar Score

43 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Moderate

Driven by 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, 7:47 pm

Understanding the Business

Company site ↗

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

What does this company do?

Shervani Industrial Syndicate Limited engages in the real estate business in India. The company develops residential projects and commercial facilities. It is also involved in information technology activities, as well as the manufacture of biscuits.

IndustryReal Estate - Development

SectorReal Estate

Employees31

Annual revenue₹21 Cr

How does it make money?

Turns over ₹21 Cr a year. Of every ₹100 of sales, about ₹-3 reaches shareholders as profit, with ₹20 left at the operating level before interest, tax and depreciation. Each of its 31 employees supports ₹68.9 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹68.9 lakh

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 1.3% 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 -20% while net margin moved -104% 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-20%

Margin effect-104%

DalalBaazaar Score

43/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 7.2% a year
✗ Latest-year revenue growth of -36.7% is below the longer-term trend — momentum is fading

Quality vs. Valuation

Company Quality

41/ 100

Weak

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

Valuation

32/ 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

305.9x

Sector Median

30.2x

median of 3 sector peers

⚠️Against its sector it trades 914% above the peer median of 30.2x.

vs. its own history

Not enough price and earnings history

vs. sector peers

Expensive

30.2x median of 3 peers · +914%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

27.8x

PEG

—

What's Good / What's Bad

🟢 What's Going Well1

Cash generation is improving
Free cash flow is up 357% over 3 years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 16.3% to -0.5% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 16.8% to 1.3% — often a sign of competition or overexpansion.

Red Flags

3 items require attention · 3 high

🔴Debt has risen sharplyFinancial
Total debt is up 4483% over 3 years, from ₹2 Cr to ₹72 Cr.
🔴The company is lossmakingFinancial
Net profit of -₹1 Cr in the latest reported year.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 75.8 points, from 95.6% to 19.8%.

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 95.6% to 19.8%. 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 17.0x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
A premium to the sector to defend
It trades 914% above the peer median. That premium needs a reason that persists, or it closes.
Returns on shareholder capital are falling
ROE has dropped from 16.3% to -0.5%. 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.
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 18%✓ 19.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 17.0x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Free cash flow remains positive✓ ₹30 Cr
Profit that never becomes cash eventually stops being profit.
4ROCE stays above 8%✗ 1.3%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

5 / 10 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

Price history

Quick Metrics

5 good · 2 neutral · 4 weak

Market Cap

₹80 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

305.9x

Expensive

Expensive — verify against sector peers

P/B Ratio

0.61x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹1.02

Profitable

Profitable on a per-share basis

ROE

-0.5%

Weak

Weak capital efficiency

ROCE

1.3%

Weak

Low return on total capital employed

Debt/Equity

0.54x

Low

Conservative leverage

Revenue Growth (YoY)

-36.7%

Shrinking

Sales are contracting

Profit Growth (YoY)

292.4%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.80%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹30 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

8.2%

Average

Average margins

Net Margin

1.4%

Weak

Very little revenue reaches the bottom line

Current Ratio

2.08

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.78

Defensive

Steadier than the market

52W Range Position

17%

Mid-range

Technical Snapshot

RSI (14)

32.6

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹27 Cr	₹143 Cr	₹48 Cr	₹21 Cr	-7.2%
EBITDA	₹26 Cr	₹33 Cr	₹4 Cr	₹4 Cr	-45.1%
EBITDA Margin	95.6%	22.9%	9.2%	19.8%	—
PAT (Net Profit)	₹24 Cr	₹31 Cr	-₹10 Cr	-₹1 Cr	—
EPS	₹86.85	₹114.25	₹-36.91	₹-2.82	—
ROE	16.3%	20.1%	-6.9%	-0.5%	—
ROCE	16.8%	19.7%	-4.4%	1.3%	—
Total Debt	₹2 Cr	₹32 Cr	₹51 Cr	₹72 Cr	+257.9%
Free Cash Flow	₹7 Cr	-₹16 Cr	₹6 Cr	₹30 Cr	+66.0%

🔴 Revenue has shrunk at 7.2% a year over 3 years.

🔴 EBITDA has shrunk at 45.1% a year over 3 years.

🔴 EBITDA Margin has fallen from 95.6% to 19.8% over 3 years (-75.8 pts).

🔴 PAT (Net Profit) has turned negative, from ₹24 Cr to -₹1 Cr.

🔴 EPS has turned negative, from ₹86.85 to ₹-2.82.

🔴 ROE has fallen from 16.3% to -0.5% over 3 years (-16.9 pts).

🔴 ROCE has fallen from 16.8% to 1.3% over 3 years (-15.4 pts).

🔴 Total Debt has grown at 257.9% a year over 3 years.

🟢 Free Cash Flow has grown at 66.0% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹344 Cr

Total Liabilities

₹211 Cr

Cash & Equivalents

₹35 Cr

Operating Cash Flow

₹45 Cr

Capex

-₹15 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

81.6%

Corporate Actions

Dividend Rate

₹2.5

Ex-Dividend Date

18 Sept 2026

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

1 positive1 negative4 general

Shervani Industrial Syndicate approves FY26 results and dividend at AGM

scanx.trade, 28 SeptCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Shervani Industrial Syndicate Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 31 Aug

Vivid Mercantile Ltd leads losers in 'B' group

Business Standard, 29 Sept

Shervani Industrial Syndicate Ltd. Financials – Balance Sheet, Profit & Loss, Cash Flow

Value Research, 04 Sept

Varroc Engineering consolidated net profit declines 26.45% in the June 2026 quarter

Business Standard, 07 AugResults

🔴Potentially negativeReported deterioration, which feeds the growth and margin inputs on this page directly.

Trade Setup for Today: Crude Oil Plunge and Tech Rally Set Stage for Volatile Open as of September 18, 2026

scanx.trade, 18 Sept

Watch Items

Revenue growth is negative (-36.7%) 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

StrongFinancial Health

MiddlingValuation

WeakBusiness Quality · Growth · Profitability · 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 4 tripwires tripped — Debt / EBITDA falls below 3x; ROCE stays above 8% · see Key things to watch ↑