TARC Limited

Real Estate — Real Estate - Development · NSE

₹123.40−₹0.29 (−0.23%)

DalalBaazaar Score

37 / 100

🔴 Weak

Verdict

CAUTION

Risk

Very High

Driven by high debt relative to equity, the company is currently loss-making, micro-cap size, which brings thin liquidity.

In simple words: The company is currently losing money, though profits are falling even as sales grow. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:46 pm

Understanding the Business

Company site ↗

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

What does this company do?

TARC Limited engages in real estate development in India.

IndustryReal Estate - Development

SectorReal Estate

Employees412

Annual revenue₹324 Cr

How does it make money?

Turns over ₹324 Cr a year. Of every ₹100 of sales, about ₹6 reaches shareholders as profit, with ₹86 left at the operating level before interest, tax and depreciation. Each of its 412 employees supports ₹78.6 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹78.6 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 2.1% 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 is the outlook?

1 analysts covering the stock expect revenue to grow about 350.0% and earnings to grow about 2527.6% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+350.0%

Est. earnings growth+2527.6%

Analysts1

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 +75% while net margin moved -47% 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+75%

Margin effect-47%

DalalBaazaar Score

37/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ ROE of 1.8% is weak

Quality vs. Valuation

Company Quality

38/ 100

Weak

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

Valuation

31/ 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.

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

EV/EBITDA

19.6x

PEG

—

What's Good / What's Bad

🟢 What's Going Well1

Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.

🔴 What Needs Attention1

Return on capital is falling
ROCE has declined from 6.3% to 2.1% — often a sign of competition or overexpansion.

Red Flags

5 items require attention · 3 high · 2 watch

🔴High leverageFinancial
Debt/Equity of 1.78x — earnings must service borrowings before shareholders see anything.
🔴Thin interest coverageFinancial
Operating profit covers interest only 1.4x — little room if earnings dip.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 6.9 points, from 92.9% to 86.0%.
🟡Debt is increasingFinancial
Total debt is up 37% over 3 years.
🟡Inventory building faster than salesFinancial
Inventory up 117% against revenue up 75% — stock may not be moving.

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 92.9% to 86.0%. 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 6.8x 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
3 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 15% a year✓ 20.6% CAGR
Latest reported year was 186.1%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 84%✓ 86.0%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA falls below 3x✗ 6.8x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
4Interest cover stays above 3x✗ 1.4x
How much operating profit can fall before interest stops being comfortably covered.
5Free cash flow remains positive✓ ₹159 Cr
Profit that never becomes cash eventually stops being profit.

Investment Checklist

6 / 12 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
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

2 good · 3 neutral · 6 weak

Market Cap

₹3,641 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

3.77x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹-0.42

Loss-making

Negative earnings per share — the business is losing money

ROE

1.8%

Weak

Weak capital efficiency

ROCE

2.1%

Weak

Low return on total capital employed

Debt/Equity

1.78x

High

High leverage

Revenue Growth (YoY)

186.1%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-58.2%

Falling

Profits are shrinking

Dividend Yield

None

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

Free Cash Flow

₹159 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

1.8x

Operating Margin

17.5%

Good

Healthy core-business profitability

Net Margin

-2.7%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.37

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.30

Defensive

Steadier than the market

52W Range Position

19%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

125.5 / 125.6

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

41.6

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹185 Cr	₹64 Cr	₹28 Cr	₹324 Cr	+20.6%
EBITDA	₹171 Cr	-₹9 Cr	-₹118 Cr	₹278 Cr	+17.5%
EBITDA Margin	92.9%	-13.8%	-424.9%	86.0%	—
PAT (Net Profit)	₹20 Cr	-₹77 Cr	-₹231 Cr	₹19 Cr	-2.1%
EPS	₹0.69	₹-2.61	₹-7.84	₹0.65	-2.0%
ROE	1.5%	-6.0%	-22.2%	1.8%	—
ROCE	6.3%	-1.1%	-6.9%	2.1%	—
Total Debt	₹1,386 Cr	₹1,393 Cr	₹1,956 Cr	₹1,897 Cr	+11.0%
Free Cash Flow	-₹88 Cr	₹117 Cr	₹5 Cr	₹159 Cr	—

🟢 Revenue has grown at 20.6% a year over 3 years.

🟢 EBITDA has grown at 17.5% a year over 3 years.

🔴 EBITDA Margin has fallen from 92.9% to 86.0% over 3 years (-6.9 pts).

🔴 PAT (Net Profit) has shrunk at 2.1% a year over 3 years.

🟡 EPS has been broadly flat over 3 years (-2.0% a year).

🟡 ROE has held roughly flat at 1.8% over 3 years.

🔴 ROCE has fallen from 6.3% to 2.1% over 3 years (-4.2 pts).

🔴 Total Debt has grown at 11.0% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹88 Cr to ₹159 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹4,600 Cr

Total Liabilities

₹3,537 Cr

Cash & Equivalents

₹77 Cr

Operating Cash Flow

₹191 Cr

Capex

-₹31 Cr

Shareholding (proxy)

Institutional Holding

5.9%

Insider Holding

66.8%

Analyst Consensus

Recommendations

1 Buy · 0 Hold · 0 Sell

Target Price (Mean)

₹275

+122.9% vs CMP

Target Range

₹275 – ₹275

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

4 mixed2 general

TARC Share Price Outlook: Where It Could Be in 3 Years

Univest, 03 Aug

Multibagger TARC shares jump 12% as Q1 pre-sales triple, collections surge 80%

Livemint, 07 JulPrice 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.

TARC shares rise 14% to hit over 2-month high on strong Q1 pre-sales, collections

Moneycontrol.com, 07 JulPrice 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.

TARC's (NSE:TARC) Promising Earnings May Rest On Soft Foundations

Simply Wall Street, 07 JunResults

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

TARC (TARC.NS) Latest Quarter: The Report Supplies Updated Headline Figures on the Day; Price Reaction: The Share Price Sheds 0.81% for the Current Session - Earnings Weakness Phase

https://www.siam.in/, 26 AugResults

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

TARC Q1FY27 PAT jumps 13x QoQ to ₹22.65 crore on Tripundra sales

scanx.trade, 11 Aug

Watch Items

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

DalalBaazaar Thesis

MiddlingFinancial Health · Growth

WeakBusiness Quality · Profitability · Valuation · 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 5 tripwires tripped — Debt / EBITDA falls below 3x; Interest cover stays above 3x · see Key things to watch ↑