1. At a Glance
R J Shah & Co just reported a ₹0.18 Cr profit on ₹0 revenue. Yes, you read that right. Most of its earnings came from “Other Income” — which, for this company, is as predictable as its quarterly sales droughts. The stock’s up 5%, P/E is a hilarious 2.55, and Book Value is ₹1,459. What sorcery is this?
2. Introduction with Hook
Picture this: A company founded in 1957 that builds hydro tunnels and atomic shafts… but reports near-zero revenue for years, while sitting on a book value that could make a real estate tycoon blush.
Meet R J Shah & Company — a civil engineering relic trading at 0.36x book, 2.5x earnings, and possibly 100x confusion.
Also: ₹530 stock price on ₹207 TTM EPS. Even your CAs can’t ignore that math.
3. Business Model (WTF Do They Even Do?)
R J Shah doesn’t build villas. It builds tunnels, caverns, shafts, and hydro-mechanical structures for:
- Hydro Power Projects
- Railways
- Atomic Energy Stations
- Irrigation departments
Clientele: Government + Semi-government bodies
Typical deal: EPC contracts or Civil + Hydro-Mechanical works
Think of them as the engineer in the shadows — not flashy, but crucial when the water starts flowing uphill.
4. Financials Overview
| Quarter | Revenue | PAT | EPS | OPM | Other Income |
|---|---|---|---|---|---|
| Q1 FY26 | ₹0.00 Cr | ₹0.18 Cr | ₹6.43 | NA | ₹0.64 Cr |
| Q4 FY25 | ₹10.46 Cr | ₹5.37 Cr | ₹191.72 | 65.2% | ₹0.42 Cr |
| Q1 FY25 | ₹0.00 Cr | ₹0.12 Cr | ₹4.28 | NA | ₹0.51 Cr |
Commentary:
- Operating income barely exists
- All the action is in “Other Income” (mostly interest, dividend, rent?)
- Q4 FY25 was a unicorn — they booked ₹10.46 Cr sales out of nowhere
- Otherwise, it’s mostly a sleepy office with fat reserves and interest income
5. Valuation
Fair Value Estimate:
| Method | Basis | FV Range |
|---|---|---|
| P/E Basis | 5x TTM EPS of ₹207 | ₹1,000 – ₹1,200 |
| Book Value Basis | 0.5–0.7x BV of ₹1,459 | ₹730 – ₹1,020 |
Current Price: ₹530
Verdict: Dirt cheap. But also: zero growth, zero predictability. It’s like buying an old bungalow in Lonavala — high value, zero footfall.
6. What’s Cooking – News, Triggers, Drama
- Q1 FY26 result: Zero revenue again.
- EPS ₹6.43 — thanks to rent/dividends or sheer luck.
- Appointment of Secretarial Auditor: Not spicy, but it’s something.
- Still no word on new orders or fresh execution.
- Last real project revenues were seen in FY17 and FY20.
This isn’t a drama show. It’s a government contractor in semi-retirement.
7. Balance Sheet
FY25 Snapshot (₹ Cr):
| Item | Value |
|---|---|
| Equity Capital | ₹0.28 Cr |
| Reserves | ₹40.59 Cr |
| Borrowings | ₹1.23 Cr |
| Total Liabilities | ₹44.76 Cr |
| Fixed Assets | ₹0.73 Cr |
| Investments | ₹0.50 Cr |
| Other Assets (Cash, Receivables) | ₹43.53 Cr |
Takeaway:
- Nearly all the assets are liquid or near-liquid
- Fixed assets are negligible. This is a cashbox company now.
- Book value: ₹1,459 per share
- Borrowings? More like pocket change.
8. Cash Flow – Sab Number Game Hai
| Year | CFO | CFI | CFF | Net |
|---|---|---|---|---|
| FY23 | ₹-1.06 Cr | ₹1.41 Cr | ₹-0.21 Cr | ₹+0.15 Cr |
| FY24 | ₹-4.63 Cr | ₹4.89 Cr | ₹-0.21 Cr | ₹+0.05 Cr |
| FY25 | ₹-1.80 Cr | ₹1.76 Cr | ₹-0.21 Cr | ₹-0.25 Cr |
They invest money. They earn interest. They pay negligible expenses. That’s it.
The cash flows are less business, more bond fund.
9. Ratios – Sexy or Stressy?
| Metric | Value |
|---|---|
| ROCE | 20% |
| ROE | 15.1% |
| OPM | 57.84% (TTM) |
| D/E | 0.03 |
| P/E | 2.55 |
| Price / Book | 0.36 |
Verdict:
Everything screams value… until you realise there’s no actual business happening. ROE looks great only because capital employed is so low.
10. P&L Breakdown – Show Me the Money
| Year | Revenue | EBITDA | PAT | EPS |
|---|---|---|---|---|
| FY23 | ₹0.27 Cr | ₹-0.74 Cr | ₹0.58 Cr | ₹20.71 |
| FY24 | ₹0.00 Cr | ₹-0.72 Cr | ₹3.74 Cr | ₹133.52 |
| FY25 | ₹10.46 Cr | ₹6.13 Cr | ₹5.75 Cr | ₹205.28 |
| TTM | ₹10.46 Cr | ₹6.05 Cr | ₹5.82 Cr | ₹207.79 |
FY25 was an outlier. Most of the time, it’s Other Income Theatre.
11. Peer Comparison
| Company | Revenue (₹ Cr) | PAT (₹ Cr) | P/E | ROE |
|---|---|---|---|---|
| DLF | 52,578 | 2,389 | 44.1 | 16.9% |
| Lodha | 13,779 | 2,764 | 47.9 | 14.7% |
| Oberoi | 4,869 | 2,062 | 30.9 | 14.7% |
| RJ Shah | 10.46 | 5.82 | 2.55 | 15.1% |
Looks like an overachiever in a class it doesn’t belong to. ROE like a big boy, business like a sleepy co-op society.
12. Miscellaneous – Shareholding, Promoters
| Category | Holding (%) |
|---|---|
| Promoters | 52.52% |
| DIIs | 1.79% |
| Public | 45.70% |
| No. of Shareholders | 249 |
Takeaways:
- Flat promoter holding for years
- Public float is high for a ₹15 Cr company — prone to wild swings
- No dilution, no fancy moves. It’s been sitting quietly, like an old Lala waiting for tenders.
13. EduInvesting Verdict™
R J Shah is a microcap with mega numbers, but no real business pulse. You get a ₹1,459 Book Value stock at ₹530, with 2.5x earnings — but 99% of the time, it’s just milking interest income.
It’s not a construction company. It’s a dividend-holding fund disguised as an EPC contractor.
Great for valuation junkies. Not so great for growth chasers.
A basement bargain. But don’t expect boardroom fireworks.
Metadata:
Written by EduInvesting Team | 24 July 2025
Tags: R J Shah, Tunneling, Value Stock, BSE Microcap, EduInvesting Premium
