South West Pinnacle Exploration Limited

Energy — Oil & Gas Equipment & Services · NSE

₹202.00+₹3.65 (+1.84%)

DalalBaazaar Score

78 / 100

🟢 Good

Verdict

ATTRACTIVE

Risk

Moderate

Driven by 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, 7:47 pm

Understanding the Business

Company site ↗

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

What does this company do?

South West Pinnacle Exploration Limited, together with its subsidiaries, provides drilling, exploration, and allied services to coal, ferrous, non-ferrous, atomic, and base metal mining; and water and unconventional energy industries in India and internationally.

IndustryOil & Gas Equipment & Services

SectorEnergy

Employees803

Annual revenue₹243 Cr

How does it make money?

Turns over ₹243 Cr a year. Of every ₹100 of sales, about ₹14 reaches shareholders as profit, with ₹27 left at the operating level before interest, tax and depreciation. Each of its 803 employees supports ₹30.3 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹30.3 lakh

Who are its competitors?

The closest listed comparisons in its industry are RELIANCE INDUSTRIES LTD, OIL AND NATURAL GAS CORP., BHARAT PETROLEUM CORP LT, INDIAN OIL CORP 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 22.7% 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 ROE15.4%

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +96% while net margin moved +88% 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+96%

Margin effect+88%

DalalBaazaar Score

78/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of -0.17 — historically steadier than the index
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

84/ 100

Excellent

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

Valuation

63/ 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.

Historical Valuation

Current P/E

15.4x

3Y Median

37.4x

40 monthly readings · mean 37.9x · range 16.9x–54.3x

Sector Median

6.9x

median of 4 sector peers

🟢Current valuation is approximately 59% below its 3y median of 37.4x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

⚠️Against its sector it trades 125% above the peer median of 6.9x.

vs. its own history

Cheap

37.4x median over 40 months · -59%

vs. sector peers

Expensive

6.9x median of 4 peers · +125%

vs. generic bands

Fair

15x–35x

EV/EBITDA

11.4x

PEG

0.28

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 18.7% to 26.6% over 3 years.
Return on equity is rising
ROE has improved from 7.9% to 16.2%.
Return on capital is rising
ROCE has improved from 12.9% to 22.7%.
High return on capital employed
ROCE of 22.7% 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

3 items require attention · 2 high · 1 watch

🔴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.
🔴Receivables growing faster than salesFinancial
Receivables up 146% against revenue up 96% — sales are being booked faster than they are collected.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹35 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 22.7% 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 18.7% to 26.6%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 59% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
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?

Sales are being booked faster than collected
Receivables are up 146% against revenue up 96%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
A premium to the sector to defend
It trades 125% above the peer median. That premium needs a reason that persists, or it closes.
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

1Revenue growth stays above 19% a year✓ 25.1% CAGR
Latest reported year was 53.4%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 25%✓ 26.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹35 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.2x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 20%✓ 22.7%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

9 / 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

6 good · 4 neutral · 1 weak

Market Cap

₹660 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

15.4x

Fair

Fairly valued against the generic band

P/B Ratio

2.96x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹13.09

Profitable

Profitable on a per-share basis

ROE

16.2%

Strong

Strong capital efficiency

ROCE

22.7%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.39x

Low

Conservative leverage

Revenue Growth (YoY)

53.4%

Healthy

Healthy top-line growth

Profit Growth (YoY)

287.3%

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

-₹35 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

19.2%

Good

Healthy core-business profitability

Net Margin

15.1%

Good

Strong bottom-line conversion

Current Ratio

1.84

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

-0.17

Defensive

Steadier than the market

52W Range Position

51%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

191.3 / 206.4

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

62.4

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹124 Cr	₹133 Cr	₹180 Cr	₹243 Cr	+25.1%
EBITDA	₹23 Cr	₹28 Cr	₹38 Cr	₹65 Cr	+40.7%
EBITDA Margin	18.7%	20.7%	21.4%	26.6%	—
PAT (Net Profit)	₹9 Cr	₹8 Cr	₹16 Cr	₹33 Cr	+54.4%
EPS	₹3.21	₹2.96	₹5.84	₹10.82	+49.9%
ROE	7.9%	6.8%	9.6%	16.2%	—
ROCE	12.9%	12.0%	15.6%	22.7%	—
Total Debt	₹65 Cr	₹93 Cr	₹65 Cr	₹80 Cr	+7.5%
Free Cash Flow	-₹11 Cr	-₹19 Cr	₹21 Cr	-₹35 Cr	—

🟢 Revenue has grown at 25.1% a year over 3 years.

🟢 EBITDA has grown at 40.7% a year over 3 years.

🟢 EBITDA Margin has risen from 18.7% to 26.6% over 3 years (+7.9 pts).

🟢 PAT (Net Profit) has grown at 54.4% a year over 3 years.

🟢 EPS has grown at 49.9% a year over 3 years.

🟢 ROE has risen from 7.9% to 16.2% over 3 years (+8.3 pts).

🟢 ROCE has risen from 12.9% to 22.7% over 3 years (+9.8 pts).

🔴 Total Debt has grown at 7.5% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹332 Cr

Total Liabilities

₹129 Cr

Cash & Equivalents

₹1 Cr

Operating Cash Flow

₹12 Cr

Capex

-₹48 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

63.6%

Corporate Actions

Ex-Dividend Date

20 Sept 2024

Peer Comparison

Company	P/E	ROE
RELIANCE INDUSTRIES LTD	21.9x	8.3%
OIL AND NATURAL GAS CORP.	6.4x	11.7%
BHARAT PETROLEUM CORP LT	7.3x	17.1%
INDIAN OIL CORP LTD	5.3x	15.4%

Recent News

2 mixed4 general

Multibagger stock, which surged 354% in five years, jumps 9% after strong Q1FY27 results

Livemint, 21 JulResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Impressive Earnings May Not Tell The Whole Story For South West Pinnacle Exploration (NSE:SOUTHWEST)

Simply Wall Street, 12 MayResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

South West Pinnacle Exploration Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 31 Aug

South West Pinnacle identifies 12 copper-gold prospects in Oman block

scanx.trade, 14 Oct

South West Pinnacle Exploration Share Price Forecast to 2030

Univest, 29 Jul

Volume Gainers Today, October 14, 2026 at 12:00 PM

HDFC Sky, 14 Oct

Watch Items

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

DalalBaazaar Thesis

StrongBusiness Quality · Financial Health · Growth · Profitability · Valuation

WeakRisk

Points for each in the Score ↑

Good business at a fair price

A sound business at a reasonable valuation. Suitable for a long-term holding, with the valuation and the direction of margins worth watching rather than the business itself. 2 high-severity red flags sit above this conclusion and should be read first.

1 of 5 tripwires tripped — Free cash flow remains positive · see Key things to watch ↑