Ircon Intl. (IRCON)

FairStock Score: 34/100 — RISKY

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

Key Financials

Strengths

• Promoter holding of 65.17% provides stability and alignment with government infrastructure priorities.
• Five-year revenue CAGR of 15.03% demonstrates proven ability to grow during an upcycle.
• Latest quarter sales of ₹2,119 Cr show meaningful scale in civil construction.
• Dividend yield of 1.85% and Piotroski F-Score of 6/9 show some financial discipline despite the weakness.

Concerns

• Sales and profit declined 5.11% and 14.92% respectively; latest quarter net margin is only around 4.7%.
• Free cash flow is -₹1,056 Cr, meaning reported profits are not being converted into cash.
• Altman Z-Score of 1.34 and negative EV/EBITDA signal financial stress risk.
• Valuation is rich: P/E of 21.97 and P/B of 2.29 against ROE of 9.72%, with margin of safety at -44.46%.

AI Analysis

At ₹154, Ircon International is priced for quality the numbers don't support. Promoter holding of 65.17% gives stability, and the five-year revenue CAGR of 15.03% shows it rode the infrastructure wave. But I invest on what I see today. Sales have fallen 5.11% and profit has dropped 14.92%. The latest quarter's net profit of ₹100 Cr on sales of ₹2,119 Cr is a thin margin, and the trend is not reassuring. The balance sheet is not something Ben Graham would admire. Debt/equity of 0.80 may be acceptable for an infrastructure firm, but free cash flow is minus ₹1,056 Cr. Reported earnings are not being converted into cash. The Altman Z-Score of 1.34 puts it in the distress zone, and the negative EV/EBITDA is a red flag that demands explanation. Book value is ₹67.26, Graham number is ₹99.41, giving a negative margin of safety of -44.46%. At P/B of 2.29 and ROE of only 9.72%, I am paying more than twice book for a mediocre return. At P/E of 21.97 for declining earnings, there is no bargain. This is a cyclical business. Government infrastructure spending moves in waves, and Ircon appears to be in an off-year. The historical growth proves it can compound when orders flow, but the latest operating trends show slowing activity and weak cash generation. I need to see revenue return to growth, positive free cash flow, and an improving Altman Z-Score before I reconsider. The FairStock score of 13/100 says risky, and from these figures I agree. At this price, the risk/reward is unfavorable; patience is better than paying up for a business whose financial health is deteriorating.

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