At a Glance
PSP Projects just reported its Q1 FY26 results, and the numbers are… as underwhelming as a half-built mall in monsoon. Revenue crashed 17% YoY to ₹518 Cr, PAT fell 99% YoY to ₹0.42 Cr, and margins collapsed to 4.8%. For a company once flaunting strong execution, this quarter looks like a construction site with no workers.
Introduction
PSP Projects was once hailed as Gujarat’s engineering marvel-maker, building institutions, hospitals, and fancy government buildings. Investors loved its execution speed and clean balance sheet. But Q1 FY26? More like a reality check. Delays, cost overruns, and shrinking order flow have crushed profitability. The stock is down 2.5% to ₹774, and with a P/E of 139, it’s priced like an AI startup, not a construction firm.
Business Model (WTF Do They Even Do?)
PSP Projects is a diversified civil construction company engaged in:
- Industrial Projects: Factories, plants.
- Institutional: Hospitals, universities, government complexes.
- Residential & Commercial: Mid to high-scale real estate.
- Infrastructure: Limited exposure.
It also runs a precast facility in Gujarat for sustainable building solutions. Sounds futuristic, but profits have gone missing.
Financials Overview
Q1 FY26 Highlights:
- Revenue: ₹518 Cr (-16.9% YoY)
- EBITDA: ₹25 Cr (margin 4.8%)
- PAT: ₹0.42 Cr (-98.8% YoY)
- EPS: ₹0.11
FY25 Recap:
- Revenue: ₹2,407 Cr
- PAT: ₹22 Cr
- ROE: 5.3% | ROCE: 8.7%
Comment: Profit erosion is real. Execution delays + rising costs = investors crying.
Valuation
- P/E Method
- EPS (TTM): ₹5.59
- Industry P/E: ~20
- Fair Value = ₹5.59 × 20 = ₹112
- EV/EBITDA
- EV ≈ ₹3,088 Cr
- EBITDA (TTM): ₹130 Cr
- EV/EBITDA ≈ 23.7x
- Fair Value ~ ₹200–300
- DCF (Optimistic)
- Assume slow recovery → ₹300–400
🎯 Fair Value Range: ₹200 – ₹400
At ₹774, the stock is like paying luxury prices for a budget flat.
What’s Cooking – News, Triggers, Drama
- Q1 Results: Worst quarter in years.
- Order Book: Pipeline unclear; no major wins reported.
- Debt: Low, but cash flow tight.
- Risk: Rising competition, cost escalations.
Balance Sheet
| (₹ Cr) | Mar 2025 |
|---|---|
| Assets | 2,353 |
| Liabilities | 1,184 |
| Net Worth | 1,209 |
| Borrowings | 272 |
Remarks: Balance sheet still okay, but profit crisis overshadows.
Cash Flow – Sab Number Game Hai
| (₹ Cr) | Mar 2023 | Mar 2024 | Mar 2025 |
|---|---|---|---|
| Operating | 45 | -224 | 53 |
| Investing | -51 | -26 | -106 |
| Financing | 12 | 269 | 20 |
Remarks: Cash flow turned positive but inconsistent.
Ratios – Sexy or Stressy?
| Metric | Value |
|---|---|
| ROE | 5.3% |
| ROCE | 8.7% |
| P/E | 139x |
| PAT Margin | 0.08% |
| D/E | 0.22 |
Remarks: Ratios scream “stress” while the P/E screams “bubble.”
P&L Breakdown – Show Me the Money
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 1,938 | 2,506 | 2,407 |
| EBITDA | 230 | 261 | 130 |
| PAT | 132 | 123 | 22 |
Remarks: Profit trend is falling off a cliff.
Peer Comparison
| Company | Revenue (₹ Cr) | PAT (₹ Cr) | P/E |
|---|---|---|---|
| L&T | 2,64,293 | 15,544 | 32 |
| KEC Intl | 22,357 | 608 | 38 |
| Ircon Intl | 10,759 | 727 | 23 |
| PSP Projects | 2,407 | 22 | 139 |
Remarks: Trades at a P/E 6× peers despite 1/100th the profits.
Miscellaneous – Shareholding, Promoters
- Promoters: 60.1% (down from 70%)
- FIIs: 3.1% (dropping)
- DIIs: 2.3% (tiny)
- Public: 34.4%
Sarcastic Take: Promoters have been quietly selling. Maybe they saw the Q1 results earlier.
EduInvesting Verdict™
PSP Projects is a well-known name in Gujarat’s construction space, but the numbers show cracks. Order book execution delays, weak margins, and falling profits have turned this from a growth stock into a value trap. Unless order inflow improves drastically, this valuation is hard to justify.
SWOT Quickie:
- Strengths: Diversified projects, clean balance sheet.
- Weaknesses: Profit collapse, margin squeeze.
- Opportunities: New government contracts, precast tech adoption.
- Threats: High competition, cost escalations, promoter selling.
Final Word: PSP needs to rebuild its profits before investors can rebuild confidence.
Written by EduInvesting Team | 30 July 2025
SEO Tags: PSP Projects, Q1 FY26 Results, Construction Stocks, Gujarat Builders
