Chavda Infra Ltd (CHAVDA)

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

Key Financials

Strengths

• Sales growth of 42.30% shows strong demand for civil construction services
• Profit growth of 64.15% outpaced revenue, indicating operating leverage
• ROCE of 17.84% demonstrates efficient use of capital
• Piotroski F-Score of 7/9 suggests healthy financial fundamentals
• Promoter holding of 55.12% aligns management interests with shareholders

Concerns

• Latest quarter net margin is thin: ₹2 Cr profit on ₹49 Cr sales
• No dividend yield — investors rely entirely on price appreciation
• Insufficient data on book value, debt/equity, and ROE prevents a full margin-of-safety analysis
• Civil construction is cyclical and competitive, with potential margin volatility

AI Analysis

When I look at Chavda Infra, I see a civil construction company growing at a pace that would catch anyone's eye. Sales are up 42.30% and profits jumped 64.15% — that tells me the operating leverage is working in their favor. At ₹104, the market cap is ₹356 Cr, so I am paying 17.44 times earnings. That is not cheap like a cigar butt, but when I factor in the PEG ratio of 0.33, the market is not fully pricing in this growth. Still, I have to be careful. The latest quarter shows sales of ₹49 Cr but a net profit of only ₹2 Cr — that is roughly a 4% margin, which is thin for a construction business. ROCE of 17.84% is respectable, and a Piotroski F-Score of 7 out of 9 suggests the balance sheet is in decent shape. But I am troubled by what I do not know. There is no book value, no debt-to-equity ratio, no return on equity figure. That is insufficient data for a Graham-style margin of safety. I cannot calculate downside protection without knowing assets and liabilities. The promoter holding of 55.12% is encouraging — owners have skin in the game. But there is no dividend, and in construction, margins can be volatile and orders lumpy. This is a fast grower, not a stalwart. I would want to see a longer track record and better disclosure before treating it as a permanent holding. Growth is real, but in this cyclical industry, today's compounder can become tomorrow's capital trap. I would keep it on the watchlist and demand proof that this growth is sustainable and profitable over a full cycle.

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