At a Glance
A2Z Infra Engineering was once an ambitious infra-EPC player focused on power and telecom transmission. Today, it’s a stock trading at 7.7x book value despite a 12-year loss-making streak, ₹366 Cr in contingent liabilities, a recent CARE D credit rating, and 99.7% promoter pledging. Revenues are declining, GST notices are flying, and the only green thing in their business is the Excel color for “Other Income.”
1. 💥 Introduction with Hook
From ₹400 Cr IPO dreams in 2010 to GST demand nightmares in 2025, A2Z has had a true Bharat-to-zero arc.
Yes, the stock has tripled from 52-week lows of ₹6.85 to ₹19.7.
Yes, they technically posted a profit in FY25 of ₹1 Cr.
But no — this isn’t a turnaround story. It’s a turnaround illusion, powered by other income, low volumes, and debt haircuts.
2. 🏗️ WTF Do They Even Do? (Business Model)
A2Z is in the EPC game (Engineering, Procurement, Construction) for:
- 🔌 Power Transmission & Distribution
- 📡 Telecom Infra (Optical fiber lines, towers)
- 🧹 Facility maintenance (earlier focus, now minimal)
They used to do municipal solid waste management and facility management — now exited. Core focus today? Winning any power infra contract they can while dodging auditors and tax demands.
3. 📊 Financials – Profit, Losses, Margins
| FY | Revenue (₹ Cr) | Net Profit (₹ Cr) | OPM | EPS |
|---|---|---|---|---|
| FY22 | ₹353 | ₹-180 | -43% | ₹-10.22 |
| FY23 | ₹349 | ₹-126 | 0% | ₹-6.98 |
| FY24 | ₹388 | ₹-7 | -23% | ₹-0.32 |
| FY25 | ₹336 | ₹+1 | 2% | ₹0.51 |
🎯 First “profit” in years — driven by ₹16 Cr other income, not operations
📉 5Y Sales CAGR: -13.6%
⚰️ 10Y PAT: Net loss ₹1,500 Cr+
4. 💸 Valuation – Cheap, Meh or Crack?
- CMP: ₹19.7
- EPS: ₹0.51
- P/E: 223x
- Book Value: ₹2.56 → P/BV: 7.7x
- ROE: 4%
🧮 EduFair Value Range™
If we apply 10–12x earnings (and pretend this profit is sustainable):
→ FV Range = ₹5 – ₹6.2
If we go by 1x Book: ₹2.5
📛 Conclusion: Current price is 4x to 8x overvalued, unless this suddenly becomes Kalpataru.
5. 🔥 What’s Cooking – News & Chaos
- 📉 CARE D credit rating for bank facilities
- ⚖️ GST demand notices worth ₹40+ Cr received in FY25
- 💼 Senior management exit (President – Projects)
- 💸 One-Time Settlement with Union Bank (₹9 Cr)
- 🧾 Other income ballooned → actual operations still loss-making
This is a debt negotiation drama, not a business revival.
6. 🧾 Balance Sheet – How Much Debt, How Many Dreams?
| FY | Borrowings | Reserves | Net Worth |
|---|---|---|---|
| FY22 | ₹394 Cr | ₹-17 Cr | ₹159 Cr |
| FY24 | ₹198 Cr | ₹-144 Cr | ₹32 Cr |
| FY25 | ₹92 Cr | ₹-131 Cr | ₹45 Cr |
✅ Debt reduced from ₹394 Cr → ₹92 Cr
❌ Negative reserves since FY22
🚨 Net worth dangerously low. They’re surviving on cash settlements.
7. 💸 Cash Flow – Sab Number Game Hai
| FY | CFO | CFI | CFF | Net Cash |
|---|---|---|---|---|
| FY24 | ₹95 Cr | ₹-11 Cr | ₹-94 Cr | ₹-9 Cr |
| FY25 | ₹54 Cr | ₹-12 Cr | ₹-39 Cr | ₹+3 Cr |
✅ Operational cash generation surprisingly positive
❌ But financing cash flow reflects loan write-offs, not fresh capital
⚠️ No free cash flow story here
8. 📊 Ratios – Sexy or Stressy?
| Metric | FY25 |
|---|---|
| ROE | 4.1% |
| ROCE | 13.8% |
| OPM | 2% |
| D/E | 2.0x |
| P/BV | 7.7x |
| Debtor Days | 114 |
⚠️ Debtor days still high
🚩 ROE and margins artificially inflated via non-operating income
📛 Negative net worth until this year
9. 📉 P&L Breakdown – Show Me the Money
- FY25 Sales: ₹336 Cr
- FY25 EBITDA: ₹7 Cr
- Other Income: ₹16.3 Cr
- Actual core EBIT = still negative
- All profit = accounting magic
And somehow this company trades at ₹350 Cr market cap.
10. ⚔️ Peer Comparison – Who’s in the Game?
| Company | P/E | ROE | OPM | MCap (₹ Cr) |
|---|---|---|---|---|
| L&T | 32x | 16.6% | 13.4% | ₹4.9 Lakh Cr |
| NBCC | 51x | 25.9% | 5.1% | ₹31,000 Cr |
| KEC | 41x | 12.1% | 6.9% | ₹23,600 Cr |
| A2Z | 223x | 4.1% | 2% | ₹352 Cr |
Even the worst infra peers like Ircon or Rail Vikas look like bluechips compared to A2Z.
11. 📉 Miscellaneous – Promoters, Pledges, Red Flags
- Promoter Holding: 28.1%
- Promoter Pledging: 99.7%
- FIIs + DIIs: Combined < 2%
- No dividend history
- Auditors flagged “going concern doubts” in FY25 report
- Company may be capitalizing interest
🚨 This is a 101 case study in financial distress
12. 🧑⚖️ EduInvesting Verdict™
This is not a turnaround. This is a delusion priced at ₹19.
If you’re holding this stock, just know:
- The company has been loss-making for 10 of last 12 years
- EPS is positive only because of other income
- P/E is >200
- Credit rating is D (Default)
- GST dept. sends love letters every quarter
🎯 FV Range: ₹2 – ₹6
❌ CMP: ₹19.7
🚨 Verdict: “One-Time Profit, Full-Time Problem”
✍️ Written by Prashant | 📅 July 8, 2025
Tags: A2Z Infra, infra EPC stock, turnaround trap, GST penalty stocks, pledged promoter shares, EduInvesting
