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Check Before You Invest : Kanoria Energy & Infrastructure Ltd

BSE: 539620 NSE: ISIN: INE534E01020
  |   Sector:  Construction & Infrastructure   |   Industry:  Cement & Construction Materials

Snapshot

Q.1 Which industry/sub-sector does Kanoria Energy & Infrastructure Ltd belong to?
Kanoria Energy & Infrastructure Ltd belongs to the Construction & Infrastructure sector, operating specifically within the Cement & Construction Materials segment.
Q.2 Is Kanoria Energy & Infrastructure Ltd a good quality company?
Kanoria Energy & Infrastructure 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 Kanoria Energy & Infrastructure Ltd undervalued or overvalued?
Kanoria Energy & Infrastructure Ltd appears Undervalued, as its key valuation ratios are lower 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 - 20.14
Price to Book 1.53 2.20
Price to Sales 0.55 0.63
EV to EBITDA 14.41 12.99
Q.4 Is Kanoria Energy & Infrastructure Ltd a good buy now?
Kanoria Energy & Infrastructure Ltd is not a good buy now, based on weak price trend analysis suggesting prices may fall. 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 Kanoria Energy & Infrastructure Ltd?
Kanoria Energy & Infrastructure Ltd revenue growth is -14.2% for FY-2025, which is below its 5-year CAGR of 3.72%, indicating slower growth.

Q.2 Gross Profit margin of Kanoria Energy & Infrastructure Ltd?
Kanoria Energy & Infrastructure Ltd Gross profit margin which is the profit after deduction of direct costs, is 3.1% for FY-2025, which is below its 5-year median of 4.2%, indicating decreasing margins.

Q.3 Operating Profit Margin of Kanoria Energy & Infrastructure Ltd?
Kanoria Energy & Infrastructure Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 6.21% for FY-2025, which is below its 5-year median of 7.23% indicating decreasing margins.

Q.4 Net Profit Margin of Kanoria Energy & Infrastructure Ltd?
Kanoria Energy & Infrastructure Ltd Net Profit Margin is 1.19% for FY-2025, is below its 5-year median of 2.32%, indicating decreasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 3.1 4.2
Operating Profit Margin (%) 6.21 7.23
Net Profit Margin (%) 1.19 2.32

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Kanoria Energy & Infrastructure Ltd?
Kanoria Energy & Infrastructure Ltd Return on Asset is 1.23%, which is below its 5-year historical median of 2.92%, indicating deteriorated asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Kanoria Energy & Infrastructure Ltd?
Kanoria Energy & Infrastructure Ltd Return on capital employed is 8.18% for FY-2025, which is below its 5-year historical median of 12.2%. 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 Kanoria Energy & Infrastructure Ltd?
Kanoria Energy & Infrastructure Ltd Return on equity is 3.94% for FY-2025, which is below its 5-year historical median of 10.79%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of Kanoria Energy & Infrastructure Ltd?
Kanoria Energy & Infrastructure Ltd Cash conversion cycle is 136 days, above its 5-year historical median of 98 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 1.03 1.26
ROE (%) 3.94 10.79
ROCE (%) 8.18 12.2
Cash Conversion Cycle 136 days 98 days

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

Q.9 Debt to Equity ratio of Kanoria Energy & Infrastructure Ltd?
Kanoria Energy & Infrastructure Ltd Debt-to-Equity ratio is 1.26, which is above the industry average of 0.36, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Kanoria Energy & Infrastructure Ltd?
Kanoria Energy & Infrastructure Ltd Debt to cash flow from operations is 5.15, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Kanoria Energy & Infrastructure Ltd?

Q.1 Promoter shareholding and pledge status of Kanoria Energy & Infrastructure Ltd?
Promoters hold 73.95% of the Kanoria Energy & Infrastructure Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Kanoria Energy & Infrastructure Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Kanoria Energy & Infrastructure Ltd vs industry peers?
Kanoria Energy & Infrastructure Ltd revenue CAGR is 3.72%, compared to the industry median CAGR of 5.89%, indicating slower growth and losing its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) -14.2 5.9
Gross Profit Growth (%) -35.7 -0.6
Operating Profit Growth (%) -26.9 -2.5
Net Profit Growth (%) -50 -8.8
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 1.03 0.82
ROE (%) 3.94 7.28
ROCE (%) 8.18 9.38
Cash Conversion Cycle (days) 135.57 17

Valuation & price assessment

Q.1 Stock return of Kanoria Energy & Infrastructure Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 27% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
27% 8.3% -6.8% -30.3%
Q.2 Valuation ratios of Kanoria Energy & Infrastructure Ltd vs historical?
The current P/E ratio of 0 is lower than its historical median of 20.14, indicating that the stock is trading below 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 - 20.14 22.88
Price to Book 1.53 2.20 1.92
Price to Sales 0.55 0.63 1.41
EV to EBITDA 14.41 12.99 11.61

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