IL&FS Engineering & Construction Co. Ltd: ₹2,672 Cr Debt, -₹243 Book Value – “Highway Contractor or Financial Accident Site?”

1. At a Glance

Once upon a time, IL&FS Engineering was building metros, highways, and dams. Today, it’s stuck in NCLT’s ICU with a negative net worth of ₹3,300+ Cr, debt of ₹2,672 Cr, and shareholders praying harder than temple queues in Shravan. The stock still trades at ₹34 (market cap ~₹438 Cr) – because in India, hope sells better than cement.

2. Introduction

IL&FS Engineering was incorporated in 1988, back when Rajiv Gandhi was PM and Maruti 800 was still aspirational. Over decades, it built some iconic assets – Mumbai-Pune Expressway, Nagpur Metro, Bangalore Ring Road. But instead of becoming “India’s L&T,” it became “India’s poster child of mismanagement.”

Thanks to the IL&FS group scandal, NCLT restructured the board. The company lost its bidding rights, defaulted on loans, and ended up living off subcontracts like an ex-rich kid working as a part-time Uber driver. Despite this, the company still carries an order book of ~₹635 Cr (mostly Surat Metro), but execution looks like a slow-motion train wreck.

The auditor’s notes? More qualifications than a UPSC topper.

3. Business Model (WTF Do They Even Do?)

In theory, IL&FS E&C is a multi-sector EPC contractor, with projects in:

Roads/Highways – Mumbai-Pune Expressway, ORR Bangalore. Now barely bagging anything.
Rail/Metro – Nagpur Metro completed, Surat Metro ongoing.
Ports – Built Dighi Port terminal.
Buildings – Residentials like Orchid Heights, IIT Madras campus.
Irrigation – 28 ongoing irrigation projects in MP, AP, Telangana.
Oil & Gas Pipelines – Multiple GAIL contracts.
Power – T&D projects, hydro & thermal.

Reality check: 90% of new work is joint ventures/subcontracts. The company itself isn’t winning big EPC mandates anymore.

Question: If you can’t bid, can you even call yourself an EPC contractor?

4. Financials Overview

Source table

Metric	Latest Qtr (Jun’25)	YoY Qtr (Jun’24)	Prev Qtr (Mar’25)	YoY %	QoQ %
Revenue	₹41.2 Cr	₹85.5 Cr	₹102.1 Cr	-51.8%	-59.6%
EBITDA	-₹26.9 Cr	-₹4.6 Cr	-₹42.7 Cr	Worse	Better
PAT	-₹9.3 Cr	-₹3.0 Cr	₹7.3 Cr	-210%	Loss to profit
EPS (₹)	-0.71	-0.23	0.56	—	—

Commentary: Revenue halved, margins more negative than Twitter debates. PAT flipped back to loss. Annualised EPS is negative, so P/E is “Not Applicable” – unless you count “Perpetual Excuses.”

5. Valuation (Fair Value RANGE only)

Let’s not kid ourselves – this is an insolvency story, not a growth story.

P/E Method: Not meaningful (loss-making).
EV/EBITDA: EV ₹2,793 Cr, EBITDA TTM -₹95 Cr → EV/EBITDA = negative infinity.
Book Value Method: Book value is -₹243/share. On paper, worth less than a ₹10 note.

Educational FV Range: ₹0 – ₹10 (yes, “zero” is included).
Disclaimer: This FV range is for educational purposes only and is not investment advice.

6. What’s Cooking – News, Triggers, Drama

Surat Metro order: Balance works of ₹359 Cr bagged through JV. Execution ongoing.
Order Book: ~₹635 Cr as per AGM speech (Aug’25). But with revenue collapsing, even this feels shaky.
Resolution Process: NCLT-led IL&FS resolution continues. CoC reportedly approved a bidder’s financial plan. Translation: company may soon get “adopted.”
Auditors’ notes: Qualified opinion, which in CA language means: “Sir, kuch toh gadbad hai.”

7. Balance Sheet