1. At a Glance
A newly-listed construction juggernaut with a 30% ROCE and a 405-day working capital cycle, Garuda Construction is playing two games at once: record profit growth… and Olympic-level receivables delay.
2. Introduction with Hook
If Garuda Construction were a Bollywood hero, it would be Hrithik Roshan in “Krrish”—fast, debt-free, and flying high… but with creditors chasing him across rooftops.
- Stock up 2.3x since IPO
- ROCE: 30%
- Net Profit CAGR (5 Years): 102%
- Working Capital Days: 405
- Revenue TTM: ₹225 Cr
This isn’t your average contractor—this is the kind that builds a mall before its clients finish paying for the parking lot.
3. Business Model (WTF Do They Even Do?)
Core Service: Civil construction and EPC
Sectors:
- Residential
- Commercial
- Infrastructure
- Industrial
Add-ons:
- Project Planning & Engineering
- MEP services (Mechanical, Electrical, Plumbing)
- O&M (Operations & Maintenance)
- Finishing & Interior Works
Garuda is a full-stack builder with one leg in traditional construction and the other in high-margin private contracts.
4. Financials Overview
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue (₹ Cr) | 161 | 154 | 225 |
| EBITDA (₹ Cr) | 56 | 50 | 66 |
| Net Profit (₹ Cr) | 41 | 36 | 50 |
| EPS (₹) | 32.75 | 4.88* | 5.35 |
| ROE (%) | 81% | 49% | 22% |
| ROCE (%) | 81% | 49% | 30% |
*Note: FY24 EPS drop due to equity dilution post-IPO.
Comment:
Margin muscle + asset-light + zero-debt = textbook IPO bait. But is it sustainable?
5. Valuation
- P/E (TTM): 33x
- Industry Median P/E: ~24x
- Book Value: ₹35.7
- Price to Book: 4.95x
- Fair Value Range (Based on Growth & ROE): ₹130–₹160
EduInvesting Take: Currently trading at ₹177, Garuda is priced for perfection. Any hiccup in execution or collection cycle = down elevator.
6. What’s Cooking – News, Triggers, Drama
- Q1 FY26 results out: Revenue ₹81 Cr, Net Profit ₹18 Cr
- ROCE still flexing at 30%
- IPO proceeds fully utilized — a good sign
- New internal auditor appointed
- Big jump in quarterly sales: ₹21 Cr → ₹81 Cr in 4 quarters
- Stock up 18% intraday (18 Jul) — some serious rerating underway?
But… debtor days still massive, and working capital days >400? We smell some contractor karma here.
7. Balance Sheet
| Metric (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Equity Capital | 12 | 37 | 47 |
| Reserves | 70 | 82 | 285 |
| Borrowings | 0 | 0 | 0 |
| Total Liabilities | 176 | 228 | 406 |
| Fixed Assets | 2 | 2 | 11 |
| Other Assets | 172 | 225 | 393 |
Takeaways:
- Almost debt-free — classic “asset-light EPC”
- Equity base ballooned post-IPO
- ₹285 Cr in reserves = comfort, but asset-heavy growth still lacking
8. Cash Flow – Sab Number Game Hai
| Cash Flow (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Operating CF | ₹12 | ₹-7 | ₹-111 |
| Investing CF | ₹-2 | ₹3 | ₹-50 |
| Financing CF | ₹-12 | ₹0 | ₹162 |
| Net Cash Flow | ₹-2 | ₹-4 | ₹1 |
Note:
They raised ₹162 Cr in FY25… but burned ₹111 Cr in operations. High WC, delayed payments — this isn’t a walk in Cubbon Park.
9. Ratios – Sexy or Stressy?
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROCE (%) | 81 | 49 | 30 |
| ROE (%) | 81 | 49 | 22 |
| Working Capital Days | 127 | 213 | 405 |
| Debtor Days | 175 | 417 | 293 |
| Cash Conversion Cycle | -1587 | -1703 | +124 |
Verdict:
Strong ROCE is literally built on delayed collections. Client gives cheque → Garuda gets it a year later → ROE falls from 81% to 22%.
10. P&L Breakdown – Show Me the Money
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue (₹ Cr) | 161 | 154 | 225 |
| EBITDA (₹ Cr) | 56 | 50 | 66 |
| OPM (%) | 35% | 32% | 30% |
| Net Profit (₹ Cr) | 41 | 36 | 50 |
| NPM (%) | 25.4% | 23.3% | 22.2% |
Analysis:
Garuda’s fat margins are rare in construction — the 30% OPM is L&T-level good. But how long can that last with slow client payments?
11. Peer Comparison
| Company | P/E | ROCE (%) | OPM (%) | Sales (₹ Cr) | Net Profit (₹ Cr) |
|---|---|---|---|---|---|
| L&T | 31.2 | 14.5 | 13.4 | 255,734 | 15,224 |
| KEC Intl | 40.6 | 16.0 | 6.9 | 21,846 | 571 |
| Kalpataru | 36.2 | 15.9 | 9.1 | 22,316 | 562 |
| Techno Electric | 47.3 | 16.5 | 14.9 | 2,269 | 378 |
| Garuda | 33.1 | 30.1 | 30.0 | 225 | 50 |
Conclusion:
Garuda beats all on margin and ROCE… but runs a business where receivables age like whisky — not a compliment in EPC.
12. Miscellaneous – Shareholding, Promoters
| Category | Dec ’24 | Mar ’25 |
|---|---|---|
| Promoters | 67.56% | 67.56% |
| FIIs | 6.65% → 4.53% | |
| DIIs | 1.45% → 0.93% | |
| Public | 24.34% → 26.97% |
Trend:
Promoters stable. FIIs trimmed. Public increased — strong retail buzz post-IPO. But institutional confidence is dipping, and that’s a red flag.
13. EduInvesting Verdict™
Garuda Construction is a classic “Looks-rich-on-paper” smallcap.
✅ 30% ROCE
✅ Debt-free
✅ Profit CAGR > 100%
✅ Fresh IPO fuel
BUT…
❌ 405-day working capital
❌ Debtors older than most startups
❌ Operational cash burn of ₹111 Cr
It’s a great company — but the business model is thirsty. Unless they collect faster and optimize WC, they’ll always need new capital to fund growth.
For now, it’s a high-growth rocket with jammed brakes.
Metadata
– Written by EduInvesting Research Desk | 18 July 2025
– Tags: Garuda Construction, Civil EPC, IPO Watch, High ROCE Stocks, Construction Smallcap, Working Capital Risk
