Umiya Buildcon Ltd Q1 FY26 — Real Estate Rents Meet Router Dreams: ₹15.36 Cr Annual Rentals, 65% Local Content Switches, CFO Musical Chairs, and an Other-Income Comedown Waiting to Happen
1) At a Glance
Umiya Buildcon Ltd (formerly MRO-TEK Realty) wants to be your friendly neighbourhood two-in-one—Bengaluru landlord by day, telecom gear tinkerer by night. Market cap ~₹186 Cr, CMP ₹99.3 (03 Oct close), 3-month return ~18%, and debt ~₹129 Cr (Debt/Equity ~1.72). FY25/TTM shows Sales ~₹51 Cr, reported PAT ~₹36 Cr (bloated by other income ~₹41 Cr — yes, the “Diwali bonus” came early), ROCE ~10%, ROE last year ~8%. Meanwhile, Hebbal property’s fully leased; ₹15.36 Cr/yr rentals from FY25, HDFC Bank + a Tata Group co. as anchor tenants. On the gadgets side, the “CORNUS” 1G switches (65% local content, TEC certified) just launched, plus rail/defence/IP routers, SD-WAN, UTM—basically, a buffet. Oh, and management’s been speed-running the CFO chair. Fun.
Reader check: Two pillars—rentals and routers. Which pillar do you think will actually pay the EMI on time?
2) Introduction
Once upon a time (1984) there was MRO-TEK—remember those LAN party era vibes? Fast-forward to 2025; the name is Umiya Buildcon Ltd (UBL), and the company is doing a “barbell strategy”—steady lease income on one side, “Make-in-India” telecom products on the other, and a side quest in solutions/EMS. That’s like selling samosas in the front and 5G backhaul at the back door; both can be tasty, but the kitchen’s got to be organised.
The real estate leg has started contributing visibly: Hebbal, Bengaluru is fully occupied and minting recurring rentals from FY25. The products leg is suddenly loud: DoT Trusted Source, TEC certifications, and now CORNUS switches boasting 65% local content—timely with government procurement flavours. There’s also a solutions business (managing ~1,200 links across 3 NOCs, hello BSNL) and EMS manufacturing. Somewhere in between, drone-lab MoUs and a defence-system TDMoIP device pop up like unexpected firecrackers.
But here’s the catch: TTM profits look better than they should due to a handsome other-income item. If you take that out, the “core” telecom + rentals engine feels more Alto than AMG. Which is fine—rentals are steady, telecom takes time. The trick is avoiding the classic midcap trap: shiny announcements + weak conversion to cash flows.
Reader check: Rentals: steady. Telecom: s-curve. Which one do you think the market will credit first in FY26?
3) Business Model – WTF Do They Even Do?
Think of UBL as a bi-engine plane:
Engine 1: Real Estate (Bengaluru + Goa)
Hebbal property fully leased from Apr’24; ~₹15.36 Cr annual rentals from FY25.
Goan land procured for development. There’s also a proposed sale of an Electronic City property to relocate electronics manufacturing—capital recycling attempt.
SPV with Indra Hotels (Mysore) Pvt Ltd for a North Bengaluru project (~₹13.32 Cr).
Engine 2: Telecom Products, Solutions & EMS
Products: DoT Trusted Source; TEC-certified routing & switching. Launched CORNUS family 1G switches (65% local content), IP carrier routers for railways/telecom/SIs, SD-WAN, UTM, plus a TDMoIP network interface device for a large defence SI.
Solutions: System-integration + operations—managing ~1,200 links with 3 Network Operation Centres; fresh BSNL order of ~₹2 Cr adds to the base.
EMS: Contract manufacturing of electronic components.
Subsidiary: Mro-Tek Technologies Pvt Ltd (₹19 lakh equity invested in FY24—tiny cheque, but it’s the operating bucket for tech).
Revenue mix FY24: Products ~37%, Solutions ~14%, AMC ~5%, Rentals ~16%, Sale of land ~11%, Interest income ~17% (yes, finance folks, that last one raised an eyebrow). Segment FY24: Products ~41%, Solutions ~26%, Real Estate ~33%.
Reader check: If rentals are one-third today, what should be the ideal split in 2 years for a clean “core” story—50/50, or do you want telecom to dominate?
The PAT/EPS spike is largely other-income driven (TTM other income ~₹41 Cr), not an operational explosion.
Annualised EPS (latest qtr ×4) ≈ ₹67.3—this is not a steady-state; treat with tongs.
Core operations QoQ improved at EBITDA level; YoY EBITDA declined. The topline is flat QoQ, respectable YoY.
Reader check: Would you value a telecom-cum-RE stock on an EPS boosted by “other income”? Or do you discount that like a free dessert that won’t repeat?
5) Valuation Discussion – Fair Value Range only (Education mode)
We’ll triangulate using (A) P/E, (B) EV/EBITDA, and (C) a simple DCF. Because the reported TTM includes large other income, we model two scenarios: Reported vs Core (ex other income).
A) P/E Method
Shares outstanding ≈ 1.87 Cr (as implied by EPS math).
Core PAT estimation: TTM PAT ~₹36 Cr; “other income” ~₹41 Cr pre-tax. Assuming 25% tax, after-tax other-income ≈ ₹30.8 Cr. Core PAT ≈ ₹36 – 30.8 = ₹5.2 Cr.
Core EPS ≈ ₹5.2 Cr / 1.87 Cr shares ≈ ₹2.8.
Core P/E ≈ 99.3 / 2.8 ≈ 35.5×.
Peer P/E context: niche telecom hardware names in India often trade 30–60× when they show visible growth + clean cashflow; rent-heavy hybrids trade lower. We assign a blended P/E range on core EPS: 18×–28× if growth proof emerges (orders, margins, rentals scaling).
Fair Value (P/E on Core EPS ₹2.8):₹50 – ₹78.
If we give partial credit for recurring rentals and a path to product scale, a stretch multiple 28×–35× pushes to ₹78 – ₹98 (upper end assumes steady proof of telecom margin + rentals kickers).
Comparable small-mid Indian comms hardware with growth cues: 12–18× EV/EBITDA; rent-heavy mixed stories: 8–12×.
Apply 10×–14× to a normalized EBITDA band. If EBITDA normalizes to ₹15–20 Cr (ex volatile items, with rentals stabilising and products scaling), EV ₹150–₹280 Cr.
Net debt ≈ ₹129 Cr; equity value EV – Net Debt → ₹21–₹151 Cr.
Per share (1.87 Cr): ₹11 – ₹81. (Yes, wide—because core margin & order conversion are the swing factors.)
C) DCF (back-of-envelope FCFF)
Base FY26E “core” revenue considered at ~₹55–60 Cr (rentals ~₹15–16 Cr + products/solutions/EMS ~₹40–44 Cr).
