1. At a Glance
A ₹2 stock that went from selling apartments to claiming software chops. Kretto Syscon Ltd has one foot in real estate and the other in tech, but are they walking or just standing confused at a crossroads?
2. Introduction with Hook
Imagine you walked into a building under construction… and instead of cement, they’re laying down Java code. That’s Kretto Syscon — the only company ambitious enough to mix property development with software solutions.
- 5-year profit CAGR: 107%
- 3-year stock CAGR: 66% (and your cousin thought FD returns were decent!)
But is this growth real, or just RE developer optimism in tech clothing?
3. Business Model (WTF Do They Even Do?)
Kretto Syscon is an all-you-can-eat buffet of business ideas:
- Real Estate: Constructing, buying, selling, and renting residential and commercial properties.
- Software: Design, develop, and deploy software for data centers, networks, enterprise apps.
- IT Consultancy: Because why not? Throw in some offshore development and they’re ready for Silicon Valley… or at least Andheri East.
Verdict: Their core business is unclear. It’s as if they rolled a dice and said, “Tech! No wait—land!”
4. Financials Overview
Quick Summary:
- FY25 Sales: ₹10.97 Cr
- FY25 Net Profit: ₹4.13 Cr
- OPM: ~49%
- ROE: 9.76%
- Market Cap: ₹133 Cr
- P/E: 23.2
- Debt: Virtually nil
They’ve turned around operations in FY24–25, but beware the high receivables and low cash generation.
5. Valuation
With erratic past performance and recent momentum, valuation is more astrology than science.
- P/E of 23.2 is acceptable if growth continues.
- But high working capital needs and low dividend payout = red flags.
Fair Value Range:
₹1.50–₹2.70 (based on P/E range of 15–27 and EPS trend)
6. What’s Cooking – News, Triggers, Drama
- Q1 FY26 Results Out: Net Profit ₹2.09 Cr. Yes, for a ₹2 stock.
- Bonus Announcement: 2:25 bonus shares approved. Expect price volatility.
- Increase in Authorized Capital: Now ₹68 Cr. Smells like fundraising plans ahead.
- Public Shareholding: 100% (Wait… no promoters? Just vibes?)
Drama alert: Watch out for dilution, low transparency, and unexplained “Other Income”.
7. Balance Sheet
| Item | FY25 (₹ Cr) |
|---|---|
| Equity Capital | 62.72 |
| Reserves | 5.16 |
| Borrowings | 1.01 |
| Other Liabilities | 1.64 |
| Fixed Assets | 0.76 |
| Investments | 1.86 |
| Other Assets | 67.91 |
| Total Assets | 70.53 |
Key Points:
- Reserves growing, but still small.
- Asset-light with most of the value in “Other Assets”.
- Low debt = good.
- Transparency on asset composition? Meh.
8. Cash Flow – Sab Number Game Hai
| FY | CFO (₹ Cr) | CFI (₹ Cr) | CFF (₹ Cr) | Net Flow (₹ Cr) |
|---|---|---|---|---|
| FY23 | 0.17 | -0.02 | 0.00 | 0.15 |
| FY24 | -0.39 | 0.00 | 0.00 | -0.39 |
| FY25 | -3.29 | -40.22 | 47.03 | 3.52 |
Takeaway:
Massive negative cash from operations in FY25 offset by financing — bonus issue funded by equity infusion? Watch for sustainability issues.
9. Ratios – Sexy or Stressy?
| Metric | Value |
|---|---|
| ROE | 9.76% |
| ROCE | 12.88% |
| Debtor Days | 253 |
| Working Cap Days | 221.6 |
| Dividend Yield | 0.00% |
| P/E | 23.2 |
Flag: 253 days of debtors? Are they selling property or collecting rent in slow motion?
10. P&L Breakdown – Show Me the Money
| FY | Sales (₹ Cr) | Op Profit (₹ Cr) | PAT (₹ Cr) | OPM % | NPM % |
|---|---|---|---|---|---|
| FY23 | 0.00 | -0.37 | 0.19 | — | — |
| FY24 | -0.05 | -0.34 | 0.25 | — | — |
| FY25 | 10.97 | 4.86 | 4.13 | 44% | 37.7% |
Turnaround story: But don’t miss the fact that FY25 was likely a one-off due to asset monetization or “other income”.
11. Peer Comparison
| Company | CMP (₹) | ROE (%) | OPM (%) | P/E | Mcap (₹ Cr) |
|---|---|---|---|---|---|
| DLF | 844.3 | 11.36 | 26.4 | 44.8 | 208,953 |
| Godrej Prop | 2289.1 | 8.91 | -1.5 | 56.6 | 68,885 |
| Oberoi Realty | 1816.5 | 14.67 | 58.7 | 30.5 | 66,085 |
| Phoenix Mills | 1480.9 | 9.81 | 56.7 | 54.2 | 52,963 |
| Kretto Syscon | 2.12 | 9.76 | 48.98 | 23.2 | 133 |
Conclusion: In terms of margins and ROE, it’s punching above its ₹2 weight class. But liquidity, scale, and governance are big question marks.
12. Miscellaneous – Shareholding, Promoters
- Promoter holding: 0%. Entirely public owned.
- Shareholders: Over 90,000 retail holders and growing.
- Corporate Actions:
- Bonus Issue 2:25 in July 2025
- Authorized capital increased
Red Flag: Absence of promoters = no skin in the game?
13. EduInvesting Verdict™
Kretto Syscon is the penny stock everyone wants to believe in — tech + real estate, zero debt, massive turnaround. But behind the scenes, it’s a high-risk bet with:
- Shaky consistency
- High receivables and working capital issues
- Zero dividend, no promoter, and low transparency
If you’re betting on this, don’t forget — in the world of microcaps, one day it’s a rocket, the next day it’s T+2 regret.
Metadata
– Written by EduInvesting Research | 16 July 2025
– Tags: Kretto Syscon, Penny Stocks, Real Estate-Tech, BSE Small Cap, Turnaround, Bonus Shares, Microcap Analysis
