Desco Infra. (544387)

Score breakdown: P/E: 3/3 · ROCE: 2/2 · Growth: 2/2 · Dividend: 0/1

Key Financials

Strengths

• Revenue and profit growth are exceptional: 85.77% and 89.85% respectively.
• P/E of 9.44 and PEG of 0.11 suggest the market is pricing in little growth.
• ROCE of 31.18% indicates strong capital efficiency for a construction firm.
• Piotroski F-Score of 7/9 points to generally sound fundamentals.
• Latest quarter net margin is around 14% (₹6 Cr profit on ₹42 Cr sales), healthy for the industry.

Concerns

• Critical data missing: no book value, ROE, debt/equity, or promoter holding disclosed.
• Zero dividend yield; minority shareholders get no cash return while data opacity remains.
• Civil construction is cyclical and intensely competitive; rapid growth may not be durable.
• Small market cap of ₹113 Cr can mean higher volatility and limited institutional participation.

AI Analysis

I have to be honest with you: Desco Infra looks interesting at first glance, but it also raises my hackles. The numbers show a civil construction company growing at extraordinary speed—sales up 85.77%, profit up 89.85%. At a P/E of just 9.44, the market is attaching hardly any premium to that growth. The PEG of 0.11 screams value. ROCE of 31.18% is genuinely impressive; it suggests management is allocating capital better than most construction firms. Latest quarter sales of ₹42 Cr with net profit of ₹6 Cr gives a net margin around 14%, solid for the trade. A Piotroski score of 7/9 supports the idea that the financials aren't deteriorating. So why do I hesitate? Because in construction, growth is often bought, not earned. A company can show spectacular revenue and profit growth for a few quarters, then get squeezed by receivables, delayed projects, and rising working capital. I don't know its debt/equity, book value, ROE, or promoter holding. Graham would say: if you can't see the balance sheet clearly, you're not analysing—you're speculating. Zero dividend means the shareholder is relying entirely on management to create value. At ₹147.35 with a market cap of only ₹113 Cr, this is a small-cap in a cyclical, competitive industry. The earnings yield is around 10.6%, which offers some margin of safety. But margin of safety must extend to the balance sheet, not just the income statement. I need order book visibility, cash flow conversion, and debt picture before I can call it a Buffett-style buy. For now, it's a fast grower on my watchlist, not yet a position.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer