1. At a Glance
SRM Contractors Ltd is what happens when an engineer’s obsession with roads meets the Himalayas’ bad mood. Incorporated in 2008 and now sitting at a market cap of ₹1,383 crore, this company has been literally carving its name into mountains — through tunnels, bridges, and slope stabilization projects that make even BRO veterans nod in approval. As of Q2 FY26 (September 2025), SRM posted a Revenue of ₹192 crore and a PAT of ₹19.4 crore, marking a jaw-dropping 101% YoY growth in sales and a 118% surge in profits.
The stock, currently trading around ₹603, has been on a scenic upward trek — up 82% in one year and 27% in the last three months, leaving investors wondering if they should build a highway to the moon next.
With a P/E of 20, ROCE of 31%, and ROE of 25.6%, SRM is no small-town contractor anymore — it’s a full-blown Himalayan infrastructure powerhouse. And yes, their order book of ₹1,668 crore (4x FY24 revenue) is thicker than the Great Wall of Ladakh. Strap in, this is going to be a high-altitude ride.
2. Introduction
What do you call a company that builds roads where even Google Maps gives up? You call it SRM Contractors. Headquartered in Jammu, this company has made a name out of turning “impossible terrain” into “tender won.” Whether it’s the freezing slopes of Ladakh, the landslides of Uttarakhand, or the winding tunnels of J&K, SRM thrives where most developers prefer a chai break.
In the grand Indian infrastructure circus, where giants like L&T, IRCON, and NBCC fight for headlines, SRM quietly lays down asphalt like a ninja with an excavator. Its projects have spanned 32 road & bridge contracts, 4 tunnels, and 1 slope stabilization marvel — all done with military precision and BRO-level patience.
And yet, it’s not all sweat and concrete. The company runs a tight ship financially — Debt-to-Equity of 0.20, a current ratio of 3.88, and zero promoter pledges — a rare trio in the infra sector. With margins holding steady near 15% OPM and consistent quarterly growth, SRM is not just digging tunnels — it’s digging gold.
So, the real question is: can SRM continue this Himalayan hustle without tumbling down the debt slope? Let’s find out.
3. Business Model – WTF Do They Even Do?
SRM Contractors’ business model is simple — find a mountain, drill through it, and collect the cheque. The company operates across four verticals that make up the backbone of its revenue streams:
a) Roads & Bridges:
The bread and butter. SRM builds, widens, and upgrades roads and bridges in treacherous regions like Jammu, Ladakh, and Himachal. Think of them as the Desi Border Road Organisation’s private cousin.
b) Tunnels:
This is the sexy stuff — designing and constructing tunnels and caverns for avalanche protection and connectivity. Projects like Tunnel T-5 and T-41 for KRCL are among their showpieces.
c) Slope Stabilization:
If roads are glamour, this is the real engineering muscle. SRM designs
reinforced slopes to prevent landslides. In mountain regions, that’s the difference between a national highway and a cliffhanger movie.
d) Other Civil Projects:
Government housing, irrigation, flood control — basically, whatever makes bureaucrats happy and keeps excavators busy.
They operate on EPC and HAM contracts, giving them flexibility in both execution and revenue timing. Plus, they own 300+ heavy construction machines, from batching plants to shotcrete machines — enough to start their own mini army of JCBs.
So next time you see a tunnel in Ladakh or a highway holding up despite snow and slides — chances are, SRM’s logo was there before the first brick.
4. Financials Overview
| Metric | Latest Qtr (Sep 2025) | YoY Qtr (Sep 2024) | Prev Qtr (Jun 2025) | YoY % | QoQ % |
|---|---|---|---|---|---|
| Revenue (₹ Cr) | 192 | 95 | 143 | 101% ↑ | 34% ↑ |
| EBITDA (₹ Cr) | 28 | 15 | 21 | 86% ↑ | 33% ↑ |
| PAT (₹ Cr) | 19.4 | 9 | 13 | 118% ↑ | 49% ↑ |
| EPS (₹) | 8.47 | 3.88 | 5.69 | 118% ↑ | 49% ↑ |
The company is literally doubling itself every year — like a bacteria colony on steroids. EPS annualized comes to ₹8.47 × 4 = ₹33.88, giving a P/E of ~17.8x — fair for an infra player growing at 100% YoY.
Witty Commentary:
Most infra companies take years to complete one road stretch; SRM seems to build both the road and the investor’s confidence simultaneously. Their profit curve looks like a mountain slope — steep and risky, but damn impressive.
5. Valuation Discussion – Fair Value Range Only
Let’s put on our valuation helmets.
a) P/E Method:
EPS (annualized) = ₹33.88
Industry average P/E = 20
Fair value range = ₹33.88 × (18–22) = ₹610 – ₹745
b) EV/EBITDA Method:
EV = ₹1,318 Cr; EBITDA (TTM) = ₹105 Cr
EV/EBITDA = 12.6x
Infra peers average = 10–14x
So, fair EV/EBITDA range translates to ₹580 – ₹720 per share.
c) DCF Method (educational guesstimate):
Assume 20% growth next 3 years, 10% thereafter, discount rate 12%.
DCF fair range = ₹600 – ₹750
✅ Fair Value Range (Educational): ₹580 – ₹750 per share
Disclaimer: This fair value range is for educational purposes only and is not investment advice.
6. What’s Cooking – News, Triggers, Drama
If SRM’s recent announcements were a soap opera, it’d be called “Infrastructure with a
