🔍 At a Glance
Likhitha Infrastructure is a smallcap infra player laying gas pipelines across 19 states and 2 UTs. It’s debt-free, has 28% ROCE, 20% ROE, and has grown revenue 5x in 6 years. Yet, the stock is down 34% from its highs, trading at just 16x earnings. Is the market missing something… or is this just boring for a reason?
1. 🎣 Introduction with Hook
Likhitha Infrastructure is one of those rare companies that:
✅ Makes money
✅ Has no debt
✅ Operates in a critical, future-facing sector (oil & gas infra)
✅ But still flies under everyone’s radar
Why?
Because its business model is so boring, even Excel falls asleep while modeling it.
But boring doesn’t mean bad — especially when your financials look like a dream sequence in a PSU officer’s retirement plan.
2. 🛠️ Business Model – WTF Do They Even Do?
Likhitha builds the pipes that carry India’s energy dreams.
🔧 Core Activities:
- Laying oil and gas pipelines (steel + MDPE)
- Constructing associated infrastructure: terminals, bridges, canals
- Maintenance work for oil & gas PSUs
- EPC contracts for CGD (city gas distribution) firms
🚨 Present in 19 states and 2 UTs
📏 1,000+ km of pipelines already laid; 1,500 km ongoing
Clients include GAIL, IOCL, HPCL, and state CGD licensees like Megha, Adani Gas, Torrent.
3. 📊 Financials Overview – Profit, Margins, ROE, Growth
| Metric | FY21 | FY23 | FY25 |
|---|---|---|---|
| Revenue | ₹191 Cr | ₹351 Cr | ₹512 Cr |
| Net Profit | ₹29 Cr | ₹60 Cr | ₹69 Cr |
| ROE | 35% | 36% | 20% |
| ROCE | 35% | 36% | 28% |
| OPM | 21% | 22% | 18% |
📈 Growth Snapshot:
- 5-Year Sales CAGR: 26%
- 5-Year PAT CAGR: 28%
- 3-Year EPS CAGR: 15%
The only recent dip? Margins sliding from 22% → 18%. Partly inflation, partly execution lag.
4. 💸 Valuation – Is It Cheap, Meh, or Crack?
| Metric | Value |
|---|---|
| CMP | ₹289 |
| P/E (TTM) | 16.4x |
| P/B | 3.05x |
| Dividend Yield | 0.52% |
| Market Cap | ₹1,141 Cr |
🧮 Fair Value Range:
Assuming 15% EPS CAGR and PEG of 1.2x on FY26 EPS ~₹21:
FV = ₹320 – ₹360 (P/E 18–20x)
It’s not a bargain-bin steal, but it’s hardly overpriced — especially given its execution history.
5. 🔥 What’s Cooking – News, Triggers, Drama
🧩 Recent Highlights:
- 🧾 Secured new CGD contracts in South & North India
- 🌍 Exploring expansion into Nepal (auditor branch setup there)
- 🧱 Capex-light – no major infra spend required for scaling
- 🧪 No order book disclosures = market can’t project earnings visibility
⚠️ Red Flag: Flat PAT in FY25. YoY growth slowed to 5%. Market punished that with a 34% fall from the highs.
6. 🧾 Balance Sheet – How Much Debt, How Many Dreams?
| Metric | FY25 |
|---|---|
| Net Worth | ₹374 Cr |
| Debt | ₹1 Cr (yes, that’s all) |
| Reserves | ₹354 Cr |
| Fixed Assets | ₹24 Cr |
| Cash/Equivalents | ₹31 Cr |
| Total Assets | ₹424 Cr |
It’s like a contractor that behaves like HDFC Bank. No loans. No funny business.
7. 💰 Cash Flow – Sab Number Game Hai
| Year | CFO | FCF |
|---|---|---|
| FY23 | ₹45 Cr | ₹35 Cr |
| FY24 | ₹7 Cr | ~₹0 Cr |
| FY25 | ₹1 Cr | 😬 |
Working capital absorption hit cash flows hard in FY24–25.
Not a huge problem, but a signal of stress on collections or execution pace.
8. 📐 Ratios – Sexy or Stressy?
| Ratio | Value |
|---|---|
| ROCE | 28% |
| ROE | 20% |
| OPM | 18% |
| Cash Conversion Cycle | 182 days ⚠️ |
| Working Capital Days | 182 ⚠️ |
⚠️ Pipeline infra = high receivables cycle. But CCC used to be 493 days in FY23, so things have improved.
9. 📈 P&L Breakdown – Show Me the Money
FY25 Numbers:
- Revenue: ₹512 Cr
- EBITDA: ₹95 Cr
- Net Profit: ₹69 Cr
- EPS: ₹17.58
- Dividend: ₹1.58 (Payout ~9%)
This is the kind of P&L that doesn’t impress FinTwit… but quietly delivers returns.
10. 🧬 Miscellaneous – Shareholding, Promoters, etc.
| Type | Stake |
|---|---|
| Promoters | 70.25% |
| FIIs | 0.91% |
| Public | 28.83% |
🎯 FII interest slowly rising, promoter holding has stabilised after a 3.8% drop over 3 years.
🧍 Shareholders: 59,274 retail foot soldiers, many from IPO days.
No pledging. No insider scandal. Just boring business, clean structure.
11. 🧠 EduInvesting Verdict™
Likhitha is like the plumbing in your house.
You don’t notice it, it’s never sexy, but when it works, you don’t touch it for 10 years.
✅ Debt-free
✅ Efficient
✅ Profitable
✅ Mid-single digit capex needs
But also:
❌ No visibility on order book
❌ Flat profit = flat stock
❌ Low liquidity = high volatility
🧾 Final Word:
Likhitha Infra is not a rocket ship. But it’s a steady train under the radar. The only question: can it accelerate again?
✍️ Written by Prashant | 📅 June 28, 2025
Tags: Likhitha Infra, smallcap stock, oil and gas infrastructure, pipeline stocks, civil EPC, dividend, ROCE stocks, CGD projects, EduInvesting
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