1. At a Glance
ISGEC Heavy Engineering is that overachieving old-timer of the engineering world — born in 1933 making sugar machinery, now juggling boilers, presses, turnkey projects, and even sugar production on the side. Basically, it’s the engineering equivalent of that uncle who runs a factory, a farm, and still finds time to complain about the price of onions.
It’s got a decent₹7,690 Cr market cap, a not-so-cheapP/E of 26.4, and enough debtor days (219) to make even the RBI nervous. The latest quarter? Revenue fell 19% YoY, profit fell 2%, but somehow EPS stayed double digits.
2. Introduction
Let’s set the scene. The Indian infra and capital goods space is buzzing — from metro rails to giant industrial complexes. L&T is busy hoovering up mega projects, KEC and Kalpataru are wiring up the grid, and ISGEC… well, ISGEC is doing a bit of everything, but mostly billing clients who then take seven months to pay.
This is the type of company that’ll deliver your power plant on time, but will also send you an invoice that sits on your desk longer than your Netflix watchlist backlog.
3. Business Model (WTF Do They Even Do?)
ISGEC operates two big buckets:
- Engineering Products & Projects (86% of revenue)– Process equipment, boilers, presses, turnkey plants, EPC contracts. Basically, if it’s big, heavy, and needs an engineering degree to operate, ISGEC might make it.
- Sugar & By-products– Through a subsidiary, they produce sugar, ethanol, and other sweet stuff — possibly to calm investors when debtor days spike.
Geography: Significant global presence — from supplying in India to shipping heavy equipment overseas. Think of it as “Make in India, Wait for Payment Globally.”
4. Financials Overview
Quarterly Performance – Q1 FY26 vs Q1 FY25 vs Q4 FY25
| Metric | Q1 FY26 | Q1 FY25 | Q4 FY25 | YoY % | QoQ % |
|---|---|---|---|---|---|
| Revenue (₹ Cr) | 984 | 1,215 | 1,444 | -19.0% | -31.9% |
| EBITDA (₹ Cr) | 76 | 103 | 103 | -26.2% | -26.2% |
| PAT (₹ Cr) | 87 | 88 | 63 | -1.1% | 38.1% |
| EPS (₹) | 11.78 | 12.04 | 8.59 | -2.2% | 37.2% |
Commentary:Revenue dropped harder than some mid-cap IPOs post-listing, but PAT stayed mostly flat thanks to a magical ₹61 Cr “Other Income” in the quarter (translation: either asset sales or investments bailed them out).
5. Valuation (Fair Value RANGE Only)
Method 1 – P/E Multiple
- EPS (TTM) = ₹39.69
- Reasonable P/E band for capital goods mid-cap: 20x–25x
- FV range = ₹794 – ₹992
Method 2 – EV/EBITDA
- EBITDA (TTM) = ₹384 Cr
- Net Debt = Borrowings ₹277 Cr – Cash ~₹365 Cr = Net Cash ₹88 Cr
- EV = MCap – Net Cash = ₹7,690 Cr – ₹88 Cr = ₹7,602 Cr
- Current EV/EBITDA ≈ 19.8x; fair range = 14x–17x → FV range = ₹561 – ₹681 Cr EV equivalent → per share ~₹906 – ₹1,098
Method 3 – DCF (Conservative Growth)
- Base FCF ~₹300 Cr, growth 8% for 5 years, discount rate 12%
- FV ≈ ₹950
📌 Final FV Range:₹794 – ₹1,098 (Educational purposes only, not investment advice).
6. What’s Cooking – News, Triggers, Drama
