1. At a Glance
Artson Engineering is the “Tank Man” of the Tata infra family—literally. They build tanks, pipes, and steel structures, mostly for Tata Projects. But with razor-thin margins and PE looking like a Bitcoin pump chart, this one’s a penny-stock engineer in a blue-chip jacket.
2. Introduction with Hook
Imagine being the underpaid backstage crew of a blockbuster movie: Artson builds the sets (read: industrial tanks and piping) but the applause goes to Tata Projects. While ROE says “wow” (125%), the PE screams “danger, Will Robinson!”
- PE: 190x
- ROE: 125%
- OPM: A generous… 7.7% (on a good day)
This is not your usual Tata powerhouse—it’s the garage in the back that occasionally fires up a money printer.
3. Business Model (WTF Do They Even Do?)
Artson’s core biz includes:
- Structural fabrication (steel structures, tankages)
- EPC projects (paused independent bidding)
- OEM support for Tata Projects
- Diversification into shipbuilding and manufacturing (because why not?)
Main Client: Tata Projects Ltd (parent company)
Strategy: Don’t chase orders. Let big brother drop some off.
Revenue mix: 95%+ tied to Tata Projects orders, which raises eyebrows (and dependency risk).
4. Financials Overview
| Metric | FY25 | FY24 | FY23 |
|---|---|---|---|
| Revenue | ₹114 Cr | ₹128 Cr | ₹131 Cr |
| Operating Profit | ₹-2 Cr | ₹14 Cr | ₹-11 Cr |
| Net Profit | ₹3 Cr | ₹6 Cr | ₹-24 Cr |
| EPS | ₹0.94 | ₹1.64 | ₹-6.37 |
| OPM | -2% | 11% | -8% |
Observations:
- Sales are on a consistent decline.
- OPMs are the mood ring of the company — swings from +11% to -8% to -2% depending on the quarter.
- Net profit relies heavily on “Other Income” (₹19 Cr in FY25 alone). Suspicious? Absolutely.
5. Valuation
- CMP: ₹179
- PE: 190x
- Book Value: ₹1.27
- Price/Book: 141x (no that’s not a fintech startup, that’s Artson)
Fair Value Estimate:
- Bear Case: ₹45 (if margins crack and other income dries up)
- Base Case: ₹95 (assuming stable orders and Tata support)
- Bull Case: ₹150 (if margin discipline + shipbuilding kick in)
FV Range: ₹70 – ₹130
Right now, priced for perfection in a sector that’s allergic to it.
6. What’s Cooking – News, Triggers, Drama
- Leadership Reshuffle: CFO merry-go-round with 3 CFOs in 6 months. New guy: Manoj Shah (joined April 2025).
- LoI worth ₹61.5 Cr (Jan 2025) – core EPC business still alive.
- Added capacity of 300 MT in Dec 2024 for ₹5 Cr – small but symbolic.
- Sale of Nagpur Division to Tata Projects – restructuring focus or desperation cash grab? You decide.
- Focus on manufacturing and shipbuilding – possibly to hedge cyclic EPC chaos.
7. Balance Sheet
| Item | FY25 | FY24 | FY23 |
|---|---|---|---|
| Equity Capital | ₹4 Cr | ₹4 Cr | ₹4 Cr |
| Reserves | ₹1 Cr | ₹-3 Cr | ₹-19 Cr |
| Borrowings | ₹49 Cr | ₹64 Cr | ₹59 Cr |
| Total Liabilities | ₹175 Cr | ₹151 Cr | ₹156 Cr |
Highlights:
- Reserves finally back in the black after years underwater.
- Debt is sticky – ~₹50 Cr on a ₹114 Cr revenue base = high leverage.
- Net worth positive… barely.
8. Cash Flow – Sab Number Game Hai
| Type | FY25 | FY24 | FY23 |
|---|---|---|---|
| Operating CF | ₹20 Cr | ₹-4 Cr | ₹-4 Cr |
| Investing CF | ₹7 Cr | ₹-1 Cr | ₹-2 Cr |
| Financing CF | ₹-23 Cr | ₹5 Cr | ₹7 Cr |
| Net Cash Flow | ₹5 Cr | ₹-0 Cr | ₹0 Cr |
Analysis:
- OCF positive after years – hallelujah.
- Investing inflow = divestments (Nagpur sale glow-up?)
- Debt repayments ongoing, which is a good sign if sustainable.
9. Ratios – Sexy or Stressy?
| Metric | FY25 | FY24 | FY23 |
|---|---|---|---|
| ROCE | 25% | 23% | -22% |
| ROE | 125% | – | – |
| Debtor Days | 216 | 129 | 149 |
| Inventory Days | 122 | 182 | 245 |
| Cash Conversion Cycle | 32 | -91 | -157 |
Verdict:
ROE inflated due to low equity base. Debtor Days rising = payment delays. CCC rising = bad.
10. P&L Breakdown – Show Me the Money
| Item | FY25 | FY24 | FY23 |
|---|---|---|---|
| Revenue | ₹114 Cr | ₹128 Cr | ₹131 Cr |
| EBITDA | ₹-2 Cr | ₹14 Cr | ₹-11 Cr |
| Interest | ₹10 Cr | ₹10 Cr | ₹10 Cr |
| Net Profit | ₹3 Cr | ₹6 Cr | ₹-24 Cr |
Takeaway:
Interest eats into profit every year. Margins vanish faster than Tata’s patience for non-performing units.
11. Peer Comparison
| Company | CMP (₹) | PE | ROCE | OPM | D/E | Promoter Holding |
|---|---|---|---|---|---|---|
| Kaynes Tech | ₹5,998 | 137x | 14.4% | 15.1% | 0.2x | 53.6% |
| Syrma SGS | ₹678 | 70x | 12.4% | 8.5% | 0.3x | 47.3% |
| Lloyds Engg | ₹81 | 110x | 15.9% | 15.9% | 0.4x | 58.5% |
| Artson Engg | ₹179 | 190x | 24.6% | 7.7% | 1.1x | 75% (Tata Projects) |
Commentary:
ROCE impressive. But Artson’s dependency, valuation, and inconsistent ops mean the premium may not be justified.
12. Miscellaneous – Shareholding, Promoters
- Promoters: 75% (Tata Projects Ltd – enough said)
- FII: 0% (No FOMO here)
- DII: 0.01%
- Public: 25%
- Number of Shareholders: ~19,000 (mostly retail hopefuls and forum prophets)
Fun Fact:
Despite the Tata tag, Artson isn’t covered much in media or brokerage reports. It’s like the middle child in the Tata family—quiet, overlooked, and sometimes surprisingly profitable.
13. EduInvesting Verdict™
Artson Engineering is a classic Tata underdog—technically capable, structurally sound, but financially fragile. If this were a machine, it would be built well, but the engine sputters unless you fill it with “Other Income.” It’s not a scam. It’s not a rocket. It’s… a tiny gear in a big Tata machine.
It may never become L&T. But with Tata’s support, it just might hang around long enough to become something… if they don’t sell it first.
Metadata
– Written by EduInvesting | July 14, 2025
– Tags: Artson Engineering, Tata Projects, Microcap, EPC, Shipbuilding, Structural Fabrication, Infra Stocks, Tata Group, Turnaround Bets, Debt Heavy Stocks
