At a Glance
A B Infrabuild Ltd, a Mumbai-based civil contractor, has gone from small roads to serious rerating. With a 250% stock jump in 1 year and operating margins improving to 16%, the company is now attracting attention — and dilution. But with promoter holding at just 31%, rising debt, and a PE of 65x, is this rally built on concrete or just fly ash?
1. 🪓 Introduction – Why This Is a Screamer
- Stock up 250% in 1 year 🚀
- Operating margins surged from 10% → 16%
- Net profit up >100% YoY, EPS tripled in 2 years
- Rights issue of ₹40 Cr just completed
- Promoter holding down from 59% → 31% in 2 years 🤨
This is your classic infra stock glow-up — now with a twist of leverage, rights dilution, and potential rerating.
2. 🏗 WTF Do They Even Do?
- Full-stack civil construction player — roads, bridges, railways, sidings
- Contracts with MCGM, PWD Maharashtra, and central agencies
- Holds AA-class contractor status
- Active in urban infra, especially Mumbai and Western India
- Holds ISO & OHSAS certifications 🏅
Think NBCC but tiny. Like L&T, but on a budget. They’re executing public infra, but no big PPPs or mega-NHAI highways yet.
3. 📈 Financials – From Kachcha to Pakka?
| Metric | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Revenue (₹ Cr) | 62 | 64 | 122 | 184 | 208 |
| EBITDA Margin | 6% | 8% | 10% | 13% | 16% |
| PAT (₹ Cr) | -2 | 1 | 8 | 11 | 16 |
| ROCE | 8% | 8% | 20% | 22% | 20% |
| ROE | Neg | 0.5% | 4.4% | 1.9% | 2.5% |
🧠 TL;DR: Growth is real. Margins improving, profits growing. But… debt rising, dilution happening, and absolute numbers still tiny.
4. 💸 Valuation – Is This Cheap, Meh, or Crack?
| Valuation Metric | Value |
|---|---|
| Market Cap | ₹1,090 Cr |
| PE (TTM) | 65.7x |
| Price/Book | 9.87x |
| EV/EBITDA (approx) | 20x |
| FV Range (EduEstimate) | ₹100 – ₹125 |
🧨 This is not cheap by infra standards.
Compare this with:
- NBCC at 51x PE, but 25%+ ROE and bigger scale
- IRCON at 25x PE with 12% ROCE
- AB Infra is being valued like a startup, not a dusty contractor
Unless they double profits again, this is priced for perfection.
5. 🍳 What’s Cooking – Orders, Rights, and Rumors
- 🏗 ₹208 Cr revenue in FY25 – up 70% in 2 years
- 🧾 Recent ₹40 Cr rights issue approved
- 💼 Order win from Garden Reach Shipbuilders for marine valves (🚢)
- ⚡Order from Afcons Infra for power systems
- 🤐 Delays in order announcements or mega infra awards still missing
- 🧍♂️ Promoter holding fell from 59% → 31% since FY23
No doubt, business is real — but the stock frenzy is partly fueled by low float, rights hype, and rerating hope.
6. 🏦 Balance Sheet – Kitna Karz, Kitna Aasman?
| Item | Mar 2023 | Mar 2024 | Mar 2025 |
|---|---|---|---|
| Equity Capital | ₹13 Cr | ₹44 Cr | ₹53 Cr |
| Reserves | ₹23 Cr | ₹37 Cr | ₹57 Cr |
| Debt | ₹32 Cr | ₹41 Cr | ₹64 Cr |
📛 Debt has doubled in 2 years.
🧯 Rights issue may temporarily stabilize leverage.
🚩 But no visible reduction in debtor/inventory days — CCC at 192 days still high.
7. 💰 Cash Flow – Sab Number Game Hai
| Year | CFO (₹ Cr) | Capex | FCF |
|---|---|---|---|
| FY23 | ₹15 Cr | ₹13 Cr | ~₹2 Cr |
| FY24 | ₹10 Cr | ₹39 Cr | -₹29 Cr |
| FY25 | -₹24 Cr | ₹3 Cr | Negative |
🚽 FY25 free cash flow is negative. Operating cash deteriorated sharply due to rising receivables, typical infra pain.
8. 📊 Ratios – Sexy or Stressy?
| Metric | Value |
|---|---|
| ROCE | 20% |
| ROE | 17.3% |
| Interest Coverage | ~4x |
| Debt/Equity | 1.1x |
| Cash Conversion Cycle | 192 days |
| Promoter Holding | 30.9% (↓ from 59%) |
😬 Verdict: Profitability ratios look good… but asset churn, working capital, and cash flow are all under pressure.
9. 💵 P&L Breakdown – Show Me the Money
- FY25 Net Profit: ₹16 Cr
- EPS: ₹2.52
- OPM: 16% (highest in company history)
- Tax rate normalized ~25%
- Other income negligible
- Interest cost up 40% YoY
Basically, they’re sweating their small order book hard. Very little room for error.
10. 🧢 Peer Comparison – Same Sector, Different League
| Company | Mkt Cap (Cr) | ROCE | PE | OPM |
|---|---|---|---|---|
| A B Infrabuild | ₹1,091 | 20% | 65.7x | 16% |
| NBCC | ₹31,000 | 33% | 51x | 5% |
| KEC Intl | ₹23,600 | 16% | 41x | 6.9% |
| IRCON | ₹18,441 | 12% | 25x | 7.8% |
| Kalpataru | ₹20,100 | 16% | 35x | 9.1% |
AB Infra’s margin is high, but scale and valuation don’t match its peers. It’s priced above Kalpataru or IRCON, despite being 1/20th their size.
11. 📦 Miscellaneous – Shareholding, Auditors, Promoters
- 👨👩👧👦 Promoters: 31%, post-rights
- 📉 Continuous dilution since FY23
- 🕵️ No FII/DII presence
- 🧾 2000+ retail shareholders now post price surge
- 📚 Auditor: MAHESH CHHEDA & ASSOCIATES (small firm, no red flags noted)
- 🏗 ISO and AA Contractor, but no segmental disclosures
12. 🧠 EduInvesting Verdict™
“Looks like a PMC flyover – flashy from the outside, hollow inside if you dig too deep.”
The fundamentals are improving, yes. Margins are expanding, revenue is growing, and profit has tripled. But the current valuation is bonkers for a microcap civil contractor.
Combine that with:
- 70% non-promoter holding
- Negative cash flow
- Dilution after dilution
- No mega order wins yet
And you get a stock that needs flawless execution just to justify the current price — let alone grow.
Fair Value Range: ₹100 – ₹125
Unless there’s a ₹500 Cr EPC order or a NHAI win, this price level may not hold. High risk, high expectations.
✍️ Written by Prashant | 📅 July 8, 2025
Tags: A B Infrabuild, SME stocks, Infra construction, Rights Issue, Civil Contractors, Microcap India, EduInvesting, Smallcap Infra Stocks, Mumbai Infra Projects, Stock Analysis
