🪞At a Glance
Falcon, a microcap MEP and civil works firm, listed on NSE SME in 2023 with dreams of becoming the next Voltas for B2B buildings. But post-IPO hype fizzled. Sales have grown 46% TTM, profit margins are decent, and the stock trades at 0.71x book. So why is it down 68% from highs?
🧠 TL;DR
| 🧾 Metric | FY25 (TTM) | Notes |
|---|---|---|
| Sales | ₹18.3 Cr | 🔼 46% TTM growth |
| Net Profit | ₹1.36 Cr | 🔼 53% TTM profit jump |
| EBITDA Margin | 9.0% | Decent for infra services |
| ROE | 17.0% | Surprisingly strong |
| ROCE | 13.8% | Fair |
| Book Value | ₹41.7 | CMP is at a ~30% discount |
| P/E | 11.6x | Low, but reflects SME illiquidity |
| Market Cap | ₹15.8 Cr | Ultra microcap zone ⚠️ |
1️⃣ What Do They Even Do?
Falcon’s core business:
- 🛠️ MEP (Mechanical, Electrical, Plumbing)
- 🔥 Firefighting & Alarm systems
- 🔌 Networking + Surveillance
- ☀️ Solar rooftop installations
- 🚧 Civil construction + fabrication
In short, they are the B2B subcontractor for buildings, factories, and infra setups — but not the main contractor.
2️⃣ Financials: Not Bad, But Not Enough
| FY | Revenue (₹ Cr) | PAT (₹ Cr) | OPM | ROE |
|---|---|---|---|---|
| FY22 | ₹22.9 | ₹1.03 | 9.5% | ~20% |
| FY23 | ₹16.5 | ₹0.90 | 13.9% | ~17% |
| FY24 | ₹11.4 | ₹0.87 | 19.4% | ~13% |
| FY25 (TTM) | ₹18.3 | ₹1.36 | 9.0% | 17% ✅ |
💡 PAT growth = strong
📉 Revenue trend = inconsistent
🧮 Profit quality = decent, but not high-conviction yet
3️⃣ Working Capital Situation = Yeh Loan Nahi, Attitude Hai
| 🧊 Metric | FY24 |
|---|---|
| Inventory Days | 612 days 😬 |
| Debtor Days | 110 days |
| CCC | 618 days ❄️ |
| Working Capital Days | 401 |
Falcon’s working capital is longer than most PSU tender cycles, which means cash flow delays. Despite that, FY24 saw positive CFO (₹0.71 Cr) for the first time in 3 years.
Past cash flows were negative. FY25 showing early improvements.
4️⃣ Valuation: Fundamentally Cheap, Technically Weak
| 📊 Metric | Value |
|---|---|
| CMP | ₹29.5 |
| Book Value | ₹41.7 |
| P/E | 11.6x |
| P/B | 0.71x ✅ |
| EV/EBITDA | Likely <7x |
| Market Cap | ₹15.8 Cr |
It’s clearly not overvalued, and current price implies no growth optimism despite improving fundamentals.
5️⃣ Shareholding? Stable… but Not Buzzing
| Holder | Stake |
|---|---|
| Promoter | 60.81% |
| Public | 39.19% |
| No. of Shareholders | ~868 (Mar ’25) |
No institutional presence, and no insider buying since listing. Retail-driven movement.
6️⃣ Why Did the Stock Fall 68% From ₹91?
- IPO pop took it to unsustainable highs
- No follow-up growth news
- Limited liquidity → any exit = panic selling
- Low visibility, no analyst coverage
- NSE fined Falcon for delay in CS appointment — minor, but hurts perception
Also, FY24 sales dropped 30% YoY (from ₹16.5 Cr in FY23 → ₹11.4 Cr in FY24), before FY25 recovery began.
7️⃣ Fair Value Range 🔍
EduInvesting FV Calculation (FY26E)
- Est. EPS FY26: ₹3.2
- P/E Range: 8x (SME avg) – 14x (smallcap rerating)
🎯 FV Range = ₹26 – ₹45
➡️ CMP ₹29.5 = fairly valued, but room for rerating exists if sales growth sustains above ₹20 Cr+ and margins improve to 11–12%.
🧾 Final Verdict: “Falcon Can Fly — But It Needs Fuel”
Right now, Falcon is a value trap with potential. Solid ROE, improving sales, and cheap valuation make it interesting. But working capital stress, lumpy revenue, and low liquidity make it risky.
Keep it on radar. Not yet a rocket, but not a scam either.
✍️ Written by Prashant | 📅 June 26, 2025
Tags: Falcon Technoprojects, SME Stocks, NSE FalconTech, MEP Services, Infra B2B, Smallcap India, Value Picks, EduInvesting SME Recap, Turnaround Stocks, Deep Value
