IRCON - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 20 Dec 25, 11:15 pm

Fundamental Rating: 3.9

📊 Core Financials:

- Quarterly PAT at ₹185 Cr vs ₹151 Cr previously → growth, though recent quarter shows -8.68% variation.

- ROCE at 14.7% and ROE at 11.6% → moderate efficiency.

- Debt-to-equity ratio at 0.00 → debt-free, strong balance sheet.

- Dividend yield at 1.71% → decent shareholder returns.

💹 Valuation Indicators:

- Current P/E: 20.8 vs Industry P/E: 18.8 → slightly overvalued.

- P/B ratio: ~2.23 (₹153 / ₹68.7) → reasonable.

- PEG ratio: 2.35 → stretched valuation relative to growth.

- Intrinsic value appears lower than CMP, suggesting premium pricing.

🏢 Business Model & Competitive Advantage:

- IRCON International operates in infrastructure development, primarily railways, highways, and construction projects.

- Competitive advantage lies in government contracts, execution expertise, and debt-free status.

- Market cap of ₹14,395 Cr reflects strong presence in infrastructure sector.

📈 Entry Zone & Long-Term Guidance:

- CMP ₹153 is below DMA 50 (₹162) and DMA 200 (₹176), showing short-term weakness.

- RSI at 37.1 and MACD negative → near oversold zone.

- Suggested entry zone: ₹140–₹150.

- Long-term holding recommended for investors seeking exposure to infrastructure growth, supported by government projects.

Positive

• Debt-free balance sheet (Debt-to-equity 0.00).
• Dividend yield of 1.71% provides steady returns.
• Moderate ROCE (14.7%) and ROE (11.6%).
• FII holdings increased by 0.03% and DII holdings by 0.04%.

Limitation

• P/E (20.8) slightly higher than industry average (18.8).
• PEG ratio of 2.35 suggests stretched valuation relative to growth.
• Quarterly profit variation shows -8.68% decline.

Company Negative News

• Stock trading below DMA levels, showing weakness.
• Quarterly PAT decline indicates short-term pressure.

Company Positive News

• EPS of ₹7.38 supports earnings visibility.
• Institutional interest with slight increases in FII and DII holdings.

Industry

• Infrastructure sector is growing with government focus on railways and highways.
• Industry P/E at 18.8 indicates moderate valuation compared to IRCON’s slightly premium pricing.

Conclusion

⚖️ IRCON International is financially stable with debt-free status, moderate returns, and government-backed projects. While valuations are slightly stretched and recent profit variation shows weakness, the long-term outlook remains positive. Entry is favorable around ₹140–₹150 for investors seeking exposure to infrastructure growth.