Semac Construct (SEMAC)

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

Key Financials

Strengths

• Sales growth of 28.03% shows strong top-line momentum.
• Profit growth of 204.48% and Piotroski F-score of 6/9 indicate improving fundamentals from a low base.
• Promoter holding of 62.85% aligns management with minority shareholders.
• Debt/equity of 0.62 is moderate and manageable for a construction business.

Concerns

• Negative ROCE of -1.53% suggests core operating capital is not earning an acceptable return.
• ROE of 6.30% is weak; latest quarter profit of ₹2 Cr on ₹59 Cr sales gives only a ~3% net margin.
• P/E of 22.16 and P/B of 1.39 leave little margin of safety for the low quality of returns.
• Trading at ₹289.31 after hitting ₹568 in the past year and paying no dividend adds uncertainty and weak shareholder returns.

AI Analysis

At first glance, Semac Construct looks like a growth story. Sales grew 28.03%, profits jumped 204.48%, and the stock trades at a PEG of 0.19. But I learned long ago not to confuse accounting columns with a great business. This is a civil construction company earning only 6.30% on equity, and its ROCE is negative at -1.53%. In other words, the capital employed in operations is not yet earning an acceptable return. The latest quarter tells the tale: ₹59 Cr in sales produced just ₹2 Cr in net profit — about a 3% margin. That is thin, cyclical, and vulnerable. The market price of ₹289.31 gives a P/E of 22.16 and a P/B of 1.39. I am paying more than book value for a business whose core returns are poor. That is not what Graham would call a margin of safety. Promoter holding of 62.85% is a plus, and a debt-to-equity ratio of 0.62 is manageable for construction. The F-score of 6/9 gives some evidence of improving fundamentals. Still, the 52-week range of ₹205 to ₹568 shows volatility far beyond a predictable compounding machine. The profit growth looks huge, but it is from a small base, and a negative ROCE reminds me that growth without returns can destroy value. I would need to see ROCE turn positive and stay positive, margins widen, and returns on equity move closer to 12-15% before I put permanent capital to work here. As of today, this is a turnaround candidate, not a stalwart.

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