Rachana Infra. (RILINFRA)

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

Key Financials

Strengths

• Sales growth of 60.17% and profit growth of 123.33% show strong recent momentum.
• Piotroski F-Score of 7/9 suggests decent fundamental health on available metrics.
• High promoter holding of 68.32% aligns management interest with minority shareholders.
• P/E of 14.94 and PEG of 0.16 appear reasonable if the growth rate is sustainable.

Concerns

• ROCE is only 7.15%, indicating low return on capital and weak competitive moat.
• Latest quarter net margin is thin: ₹1 Cr profit on ₹48 Cr sales, roughly 2%.
• Zero dividend yield; total return depends entirely on uncertain capital gains.
• Critical data like book value, ROE, and debt/equity are missing, making balance-sheet risk unassessable.

AI Analysis

Rachana Infra is a small civil construction player with a market cap of just ₹67 Cr. At first glance the growth numbers are eye-catching: sales up 60.17% and profit up 123.33%, with a P/E of 14.94 and a PEG of 0.16. But as Graham taught, a price that looks cheap can be a value trap if business quality is poor. The latest quarter shows sales of ₹48 Cr but net profit of only ₹1 Cr, roughly a 2% net margin. That is a thin, tender-driven business with little pricing power. ROCE is just 7.15%, below what I would expect from a company with a durable competitive advantage. Civil construction in India is intensely competitive, working-capital heavy, and subject to project delays and cyclical government spending. There is no moat here that I can clearly identify. Positives: promoter holding is high at 68.32%, aligning interests; the Piotroski F-Score of 7 suggests improving fundamentals; and the profit growth is encouraging. However, the absence of book value, ROE, and debt/equity data is a red flag. I cannot intelligently assess balance-sheet risk. A 60% sales growth from a small base can be misleading; one or two large contracts can swing results. The 52-week range of ₹27.60 to ₹47.50 also shows volatility. This looks like a fast grower on paper, but at heart it remains a cyclical contractor with thin margins and no clear competitive shield. I would wait for more data, especially order book, debt levels, and return on equity, before committing capital. If growth continues and margins expand, it may become interesting; today it is too speculative for a Graham-style investor.

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