IRCON - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.8
| Stock Code | IRCON | Market Cap | 14,315 Cr. | Current Price | 152 ₹ | High / Low | 226 ₹ |
| Stock P/E | 22.2 | Book Value | 68.7 ₹ | Dividend Yield | 1.74 % | ROCE | 14.7 % |
| ROE | 11.6 % | Face Value | 2.00 ₹ | DMA 50 | 143 ₹ | DMA 200 | 159 ₹ |
| Chg in FII Hold | 0.24 % | Chg in DII Hold | 0.07 % | PAT Qtr | 91.2 Cr. | PAT Prev Qtr | 185 Cr. |
| RSI | 60.7 | MACD | 5.47 | Volume | 25,55,449 | Avg Vol 1Wk | 26,74,447 |
| Low price | 114 ₹ | High price | 226 ₹ | PEG Ratio | 2.52 | Debt to equity | 0.00 |
| 52w Index | 33.9 % | Qtr Profit Var | -35.2 % | EPS | 6.85 ₹ | Industry PE | 18.5 |
Core Financials:
IRCON shows solid fundamentals. ROE is 11.6% and ROCE 14.7%, reflecting decent efficiency. EPS at ₹6.85 is moderate, supported by strong revenue base. Debt-to-equity is 0.00, highlighting a debt-free balance sheet. However, quarterly PAT dropped sharply (₹91.2 Cr vs ₹185 Cr, -35.2%), raising concerns about earnings consistency.
Valuation:
Stock P/E of 22.2 is slightly above industry average (18.5), suggesting mild overvaluation. PEG ratio of 2.52 indicates stretched growth expectations. Price-to-book is ~2.2, moderately expensive. Dividend yield of 1.74% provides some income support.
Business Model & Health:
IRCON operates in infrastructure and railway construction, benefiting from government contracts and project execution expertise. Competitive advantage lies in its debt-free structure and strong order book. However, earnings volatility and valuation risks limit upside.
Entry Zone:
Ideal entry zone: ₹140–₹150. Current price ₹152 is near fair entry. Long-term holding is viable given debt-free status and sector tailwinds, but investors should monitor earnings stability.
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Positive
- Debt-free balance sheet (0.00 debt-to-equity)
- Healthy ROCE (14.7%) and ROE (11.6%)
- Dividend yield of 1.74%
- FII (+0.24%) and DII (+0.07%) holdings increased
Limitation
- Quarterly PAT contraction (-35.2%)
- P/E (22.2) above industry average (18.5)
- PEG ratio (2.52) suggests overvaluation
- EPS moderate at ₹6.85
Company Negative News
- Sharp decline in quarterly PAT
- Valuation concerns due to premium multiples
Company Positive News
- Debt-free structure supports financial stability
- Institutional confidence improved (FII/DII increases)
- Technicals show bullish momentum: RSI 60.7, MACD 5.47
Industry
Infrastructure sector trades at industry P/E of 18.5, supported by government spending and railway expansion. Peer firms with stronger earnings growth may offer better valuation, but IRCON’s debt-free balance sheet is a key differentiator.
Conclusion
IRCON is fundamentally strong with a debt-free balance sheet and decent efficiency. Rating: 3.8. Entry near ₹140–₹150 is preferable. Long-term holding is justified by sector tailwinds, but investors should monitor earnings volatility. Exit strategy around ₹210–₹220 if fundamentals stagnate.
Would you like me to also prepare a side-by-side HTML peer comparison (IRCON vs IRB vs KNR Constructions) so you can benchmark valuation, ROE, and debt levels in one reusable template?