🟢 1. At a Glance
Prostarm Info Systems started off as a UPS and battery installer, but it’s now morphing into a manufacturing play in energy storage and solar EPC. Solid profit growth, 30% ROE, and ₹1,258 Cr market cap — but with GST show cause notices, working capital stress, and debtor days stuck above 110. Plus, a 1.2 GWh battery plant in Jhajjar? We’ll believe it when we see it.
🎬 2. Introduction with Hook
Welcome to the SME space where:
- You start with inverter sales,
- add solar buzzwords,
- throw in a “1.2 GWh battery storage plant”
- and then quietly receive not one, but two GST show-cause notices 💸
Prostarm is the kind of stock that investors fall for when they hear “energy storage,” but forget to check if the receivables are even coming home.
🔌 3. Business Model – WTF Do They Even Do?
Started as a UPS installer. Now a full-stack power equipment SME.
- 🔋 Core Biz: Power Conditioning Equipment — UPS systems, energy storage (batteries), stabilizers
- ☀️ Diversified into Solar EPC – Rooftop PV installs since 2018
- 🏭 Manufacturing Shift: Now designs and assembles under own brand
- ⚡ Upcoming: ₹25 Cr capex to build a 1.2 GWh BESS (Battery Energy Storage System) facility in Jhajjar, Haryana by FY26
- 🔧 Clients: Enterprises, infra, solar integrators
- 🏷️ Products: Mostly branded industrial energy gear
Basically: The Havells dream, in SME avatar — with GST baggage.
💰 4. Financials Overview – Profit, Margins, ROE, Growth
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue (₹ Cr) | 229 | 256 | 346 |
| Net Profit (₹ Cr) | 21 | 24 | 31 |
| OPM % | 12% | 14% | 14% |
| ROE | 33% | 30% | 30% |
| EPS | ₹4.81 | ₹5.59 | ₹7.12 |
✅ Clean margin improvement
✅ Profit CAGR ~37%
⚠️ EPS momentum needs to match capex hype
💸 5. Valuation – Is It Cheap, Meh, or Crack?
- 📌 CMP: ₹214
- 📌 EPS (TTM): ₹7.12
- 📌 P/E: 41.2x
- 📌 Book Value: ~₹15.6 → P/B: ~13.7x
- 📌 ROE: 30%
🧮 Fair Value Range (EduCalc™):
| Band | Value (₹) |
|---|---|
| 30x EPS | ₹213 |
| 35x EPS | ₹249 |
| 40x EPS | ₹285 |
🎯 Fair Value Range = ₹210 – ₹250
Stock is within its optimism range, but fully priced unless BESS orders start flowing.
🧨 6. What’s Cooking – News, Triggers, Drama
📰 Key Headlines:
- ⚡ ₹25 Cr investment into 1.2 GWh BESS plant by FY26
- 🧾 GST Show Cause Notices totalling ₹1.6 Cr (Jul 2025)
- 💹 Stock up 100% in 6 months
- 👎 Promoter Holding down by 27% QoQ — 👀
- 🧮 5-Year Sales CAGR = 26%, Profits CAGR = 37%
All in all: High voltage headlines… low current reality (so far)
🏦 7. Balance Sheet – How Much Debt, How Many Dreams?
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Equity Capital | ₹43 Cr | ₹43 Cr | ₹43 Cr |
| Reserves | ₹19 Cr | ₹43 Cr | ₹74 Cr |
| Borrowings | ₹24 Cr | ₹43 Cr | ₹67 Cr |
| Fixed Assets | ₹6 Cr | ₹13 Cr | ₹22 Cr |
| Total Assets | ₹146 Cr | ₹200 Cr | ₹244 Cr |
❗Borrowings have almost tripled in 2 years
🏭 Capex creeping in — possibly for the battery plant
💰 Net worth healthy — but leverage uptrend is real
💵 8. Cash Flow – Sab Number Game Hai
| Year | CFO (₹ Cr) | FCF? | Commentary |
|---|---|---|---|
| FY23 | ₹-13 Cr | ❌ | WC absorption, scale pains |
| FY24 | ₹-8 Cr | ❌ | No signs of cash turnaround |
| FY25 | ₹-6 Cr | ❌ | Still burning despite PAT |
🚩 This is the biggest red flag.
PAT ≠ Cash. No free cash = no real growth power. Unless BESS plant is a hit.
📐 9. Ratios – Sexy or Stressy?
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Debtor Days | 107 | 128 | 113 |
| Inventory Days | 78 | 115 | 76 |
| CCC (Days) | 68 | 118 | 113 |
| Working Cap Days | 85 | 129 | 137 |
| ROCE | 45% | 33% | 30% |
⚠️ 113 debtor days = delayed client payments
⚠️ ROCE declining as asset base expands
✅ Still better than most SME energy peers
📊 10. P&L Breakdown – Show Me the Money
- FY25 Revenue: ₹346 Cr
- OPM: 14% → ₹47 Cr EBITDA
- PBT: ₹41 Cr
- Net Profit: ₹31 Cr
- No material “other income” distortion
- Tax rate = consistent 26%
This is a real business. Just cash stuck with clients.
🥊 11. Peer Comparison – Who Else in the Game?
| Company | P/E | ROCE | OPM % | Debtor Days | MCap (₹ Cr) |
|---|---|---|---|---|---|
| Waaree Renewables | 44.6 | 84.9% | 19.4% | 90 | ₹10,373 |
| Shilchar Tech | 43.4 | 71.1% | 29.6% | – | ₹6,376 |
| Genus Power | 37.4 | 19.2% | 19.2% | 40–60 | ₹10,962 |
| Prostarm | 41.2 | 30.0% | 14.0% | 113 | ₹1,258 |
🎯 Reasonable in peer P/E context
📉 Margins and debtor days slightly weaker
📈 Only one with BESS capex trigger
🧬 12. Miscellaneous – Shareholding, Promoters
| Holder | Mar ’25 | Jun ’25 |
|---|---|---|
| Promoters | 100% | 72.82% 🔻 |
| FIIs | 0% | 4.92% ✅ |
| DIIs | 0% | 5.29% ✅ |
| Public | 0% | 16.97% ✅ |
| Shareholders | 0 → 40,735 🧨 |
😱 Promoter dilution of 27.2% in a single quarter
👍 Retail + institutional entry post-IPO
🕵️ Check lock-in expiry dates
🧑⚖️ 13. EduInvesting Verdict™
Prostarm is riding the BESS + Solar + UPS theme with strong numbers — but still feels like it’s one GST raid away from chaos.
✅ Good ROE, margins, and real product play
✅ BESS factory = potential moat
❌ Debtors, CFO negativity, and GST notices = red flags
❌ Promoter offloading ≠ confidence
Fair Value Range: ₹210 – ₹250
Stock is near fair zone — but high P/E assumes flawless execution.
Final Take:
“Great voltage, but the current isn’t flowing yet.”
✍️ Written by Prashant | 📅 10 July 2025
Tags: prostarm info systems, sme energy stocks, battery storage india, gst show cause notice, solar epc, working capital issues, sme ipo bse, fair value prostarm, bess manufacturing, sme ipo tech
