At a Glance
Atal Realtech Ltd, listed on NSE SME, is a government contractor turned stock market sweetheart. With a 111% 1-year return, low float, and ₹95 Cr FY25 revenue — it looks like a growth story. But scratch the surface and you’ll find dilution, falling promoter holding, and erratic cash flows. Is it just another SME trap, or a ₹20 multi-bagger in disguise?
1. 🎬 Introduction – “Pani, Sadak, Stadium – Sab Banayenge”
- Incorporated in 2012, listed in 2020 on NSE Emerge.
- Company handles civil infra projects — roads, bridges, irrigation, government halls, hospitals, mass housing.
- Registered as Class I-A contractor with Govt. of Maharashtra. Basically: “Jo kaam netaon ne announce kiya, yeh banaayega”.
- Stock up 111% in 1 year, CMP ₹20.4. But… P/E = 63.8. Valuation ka cement zyada lag gaya?
2. 🚜 WTF Do They Even Do?
Atal Realtech’s job card:
- 👷 Govt infra contractor (PWD Maharashtra)
- 🔧 EPC & sub-contracting: End-to-end project handling.
- 💧 Specializations:
- Water Supply & Drainage
- Roads & Bridges
- Minor Irrigation Projects
- Stadiums & Cold Storages
- Public buildings, Hospitals, Educational structures
🧱 100% B2G business. Their client is sarkar. Their risk? Sarkari payment cycles.
3. 📈 Financials – Profit, Margins, ROE, Growth
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | ₹40.63 Cr | ₹40.83 Cr | ₹95.73 Cr |
| Net Profit | ₹2.08 Cr | ₹2.14 Cr | ₹3.54 Cr |
| OPM | 11.9% | 12.7% | 7.96% |
| ROE | 6.7% | 6.7% | 7.0% |
| EPS | ₹0.19 | ₹0.19 | ₹0.32 |
📉 ROE is meh.
📈 TTM growth is wild — 134% jump in revenue.
But margins are falling despite higher scale. Why? Dilution? Pricing pressure?
4. 💸 Valuation – Cheap, Meh, or Crack?
| Metric | Value |
|---|---|
| CMP | ₹20.4 |
| Market Cap | ₹226 Cr |
| P/E | 63.8x 😳 |
| P/B | 3.37x |
| Book Value | ₹6.06 |
| Dividend | 0% |
🧮 Fair Value Range Estimate:
- FY25 EPS = ₹0.32
- Assume 20–25x P/E (small-cap infra) = ₹6.4 – ₹8
- Stretch bull case: ₹10
🔺CMP ₹20.4 is fully priced, maybe even hyped.
5. 📢 What’s Cooking – News, Triggers, Drama
- 🧾 Rights Issue (Sep 2024): 3.7 Cr shares to raise ₹27 Cr
- 💰 Preferential Allotment (June 2024): 1.68 Cr shares + 72L warrants @ ₹16
- 🧾 Capital increased to ₹28 Cr
- 🚨 Promoter holding down from 49.2% → 32.8%
- 📈 Sales spike in FY25. But sustainable?
👀 This smells like an operator-heavy, SME-platform capital cycle. Retail lured by “volume spike”, “infra theme”, and “low PE illusion”.
6. 🧾 Balance Sheet – How Much Debt, How Many Dreams?
| Metric | FY25 |
|---|---|
| Equity Capital | ₹22.2 Cr |
| Reserves | ₹45.09 Cr |
| Borrowings | ₹15.83 Cr |
| Other Liabilities | ₹6.51 Cr |
| Total Assets | ₹89.63 Cr |
| Fixed Assets | ₹4.5 Cr |
⚠️ Tiny asset base, small equity. But okay for SME size.
Debt is moderate. But borrowings grew by 72% YoY — they’re clearly raising money to fuel the top-line.
7. 💵 Cash Flow – Sab Number Game Hai
| Year | CFO | CFI | CFF | Net Flow |
|---|---|---|---|---|
| FY25 | -₹14.35 Cr | -₹0.89 Cr | ₹22.92 Cr | ₹7.69 Cr |
| FY24 | ₹1.26 Cr | -₹0.99 Cr | -₹2.05 Cr | -₹1.79 Cr |
🧨 Operating cash = deeply negative
🆘 Survival = external funds, rights issue, equity raises
This company works a lot, but doesn’t get paid fast. Welcome to government contracting.
8. 🧮 Ratios – Sexy or Stressy?
| Ratio | Value |
|---|---|
| ROE | 6.74% |
| ROCE | 10.78% |
| OPM | 7.96% |
| Debtor Days | 10.98 (improved!) |
| Inventory Days | 1,661.7 😵 |
| Working Capital Days | 232 |
🧾 Inventory Days are bizarre — unless they’re stockpiling cement for 10 years, this looks like bad data classification or messy site-level accounts.
9. 📊 P&L Breakdown – Show Me the Money
| Year | Sales | Net Profit | EPS |
|---|---|---|---|
| FY23 | ₹40.63 Cr | ₹2.08 Cr | ₹0.19 |
| FY24 | ₹40.83 Cr | ₹2.14 Cr | ₹0.19 |
| FY25 | ₹95.73 Cr | ₹3.54 Cr | ₹0.32 |
🚨 Despite revenue doubling in FY25, net profit only up 65%
🧮 Why? Margins are compressing.
📉 Fixed costs, high raw material costs, or low-bid projects?
10. 📐 Peer Comparison – Who Else is in the Game?
| Company | CMP | Market Cap | P/E | ROE | Revenue |
|---|---|---|---|---|---|
| DLF | ₹836 | ₹2.06 L Cr | 45.2 | 11.17% | ₹7,993 Cr |
| Godrej Prop | ₹2,304 | ₹69,365 Cr | 49.9 | 10.18% | ₹4,922 Cr |
| Brigade | ₹1,073 | ₹26,226 Cr | 38.5 | 14.6% | ₹5,074 Cr |
| Atal Realtech | ₹20.4 | ₹226 Cr | 63.8x | 6.74% | ₹95 Cr |
📌 Way overvalued compared to even listed players. And those are brand-heavy developers. Atal’s a sub-contractor!
11. 🏛️ Misc – Shareholding, Promoters, SME Stuff
- Promoter holding: Down to 32.84% from 49.25%
- Public holding: Up to 66.6%
- FII/DII negligible
- Dilution via:
- Rights issue
- Preferential allotment
- Warrants
🧨 Float is increasing = less operator control = less pump = more risk for stuck retailers
12. 🚨 Red Flags Checklist
✅ Falling margins despite 2x revenue
✅ Promoter dilution of -18.4%
✅ Rights issue + warrants = retail dilution risk
✅ High P/E (63.8x)
✅ Low promoter skin in the game
✅ SME platform + price spike = 🐍 operator alert
✅ Cash flows deeply negative
13. 🧑⚖️ EduInvesting Verdict™
🏗️ Atal Realtech is a classic small-cap infra sarkari thela. It looks legit, wins projects, but can it scale profitably without burning investor value?
Right now, it’s expensive, over-owned by public, and diluting equity like sugar in chai.
📉 Not a scam, but clearly riding sentiment over fundamentals.
🎯 Fair Value Range: ₹6–₹10
CMP of ₹20+ = Hope Premium + Retail Hype Tax.
✍️ Written by Prashant | 📅 July 5, 2025
Tags: Atal Realtech, SME IPO, Infra stock analysis, government contractor, rights issue, promoter dilution, EduInvesting
