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Check Before You Invest : Hubtown Ltd

BSE: 532799 NSE: HUBTOWN ISIN: INE703H01016
  |   Sector:  Construction & Infrastructure   |   Industry:  Construction - Real Estate

Snapshot

Q.1 Which industry/sub-sector does Hubtown Ltd belong to?
Hubtown Ltd belongs to the Construction & Infrastructure sector, operating specifically within the Construction - Real Estate segment.
Q.2 Is Hubtown Ltd a good quality company?
Hubtown Ltd is a weak quality company, based on a inconsistent multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Hubtown Ltd undervalued or overvalued?
Hubtown Ltd appears Overvalued, as its key valuation ratios are higher than their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 5-year
Historic Median
Price to Earnings 26.18 24.52
Price to Book 1.13 0.42
Price to Sales 9.46 2.92
EV to EBITDA 17 20.84
Q.4 Is Hubtown Ltd a good buy now?
Hubtown Ltd is a good buy now, based on strong price trend analysis suggesting prices may rise. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Hubtown Ltd?
Hubtown Ltd revenue growth is 56.4% for FY-2025, which is above its 5-year CAGR of 1.58%, indicating faster growth.

Q.2 Gross Profit margin of Hubtown Ltd?
Hubtown Ltd Gross profit margin which is the profit after deduction of direct costs, is 44% for FY-2025, which is above its 5-year median of -8.4%, indicating increasing margins.

Q.3 Operating Profit Margin of Hubtown Ltd?
Hubtown Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 15.67% for FY-2025, which is above its 5-year median of -5.3% indicating increasing margins.

Q.4 Net Profit Margin of Hubtown Ltd?
Hubtown Ltd Net Profit Margin is 27.97% for FY-2025, is above its 5-year median of 3.53%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 44 -8.4
Operating Profit Margin (%) 15.67 -5.3
Net Profit Margin (%) 27.97 3.53

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Hubtown Ltd?
Hubtown Ltd Return on Asset is 2.29%, which is above its 5-year historical median of 0.19%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Hubtown Ltd?
Hubtown Ltd Return on capital employed is 6.51% for FY-2025, which is above its 5-year historical median of 1.43%. The current ROCE is below its estimated weighted average cost of capital (WACC) of 14%, indicating value preservation.

Q.7 Return on Equity (ROE) of Hubtown Ltd?
Hubtown Ltd Return on equity is 3.75% for FY-2025, which is above its 5-year historical median of 0.43%, indicating the business is making better use of its shareholders capital.

Q.8 Cash conversion cycle of Hubtown Ltd?
Hubtown Ltd Cash conversion cycle is 1566 days, below its 5-year historical median of 2006 days, indicating improved working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 0.08 0.06
ROE (%) 3.75 0.43
ROCE (%) 6.51 1.43
Cash Conversion Cycle 1566 days 2006 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of Hubtown Ltd?
Hubtown Ltd Debt-to-Equity ratio is 0.10, which is lower the industry average of 0.23, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Hubtown Ltd?
Hubtown Ltd Debt to cash flow from operations is -0.5, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Hubtown Ltd?

Q.1 Promoter shareholding and pledge status of Hubtown Ltd?
Promoters hold 32.84% of the Hubtown Ltd, with 16.07% of their stake pledged, indicating high pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Hubtown Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Hubtown Ltd vs industry peers?
Hubtown Ltd revenue CAGR is 1.58%, compared to the industry median CAGR of 0.00%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 56.4 0
Gross Profit Growth (%) 1,233.3 14.9
Operating Profit Growth (%) 0 10.4
Net Profit Growth (%) 1,166.7 17.2
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.08 0.1
ROE (%) 3.75 1.36
ROCE (%) 6.51 3.88
Cash Conversion Cycle (days) 1566.2 439

Valuation & price assessment

Q.1 Stock return of Hubtown Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 7.8% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
7.8% 70.8% 77.5% 36.4%
Q.2 Valuation ratios of Hubtown Ltd vs historical?
The current P/E ratio of 26.18 is higher than its historical median of 24.52, indicating that the stock is trading above its historical average valuation.
Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median
5-year
Industry Median
Price to Earnings 26.18 24.52 33.43
Price to Book 1.13 0.42 1.53
Price to Sales 9.46 2.92 5.23
EV to EBITDA 17 20.84 14.43

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