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Check Before You Invest : Oval Projects Engineering Ltd

BSE: 544498 NSE: ISIN: INE0RTI01017
  |   Sector:  Construction & Infrastructure   |   Industry:  Engineering - Construction

Snapshot

Q.1 Which industry/sub-sector does Oval Projects Engineering Ltd belong to?
Oval Projects Engineering Ltd belongs to the Construction & Infrastructure sector, operating specifically within the Engineering - Construction segment.
Q.2 Is Oval Projects Engineering Ltd a good quality company?
Oval Projects Engineering 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 Oval Projects Engineering Ltd undervalued or overvalued?
Oval Projects Engineering Ltd appears Somewhat 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 3-year
Historic Median
Price to Earnings 11.34 13.34
Price to Book 1.03 1.01
Price to Sales 1.04 1.22
EV to EBITDA 6.83 7.81
Q.4 Is Oval Projects Engineering Ltd a good buy now?
Oval Projects Engineering 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 Oval Projects Engineering Ltd?
Oval Projects Engineering Ltd revenue growth is 31.2% for FY-2025, which is above its 3-year CAGR of 21.7%, indicating faster growth.

Q.2 Gross Profit margin of Oval Projects Engineering Ltd?
Oval Projects Engineering Ltd Gross profit margin which is the profit after deduction of direct costs, is 11.3% for FY-2025, which is above its 3-year median of 8.5%, indicating increasing margins.

Q.3 Operating Profit Margin of Oval Projects Engineering Ltd?
Oval Projects Engineering Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 17.81% for FY-2025, which is above its 3-year median of 12.81% indicating increasing margins.

Q.4 Net Profit Margin of Oval Projects Engineering Ltd?
Oval Projects Engineering Ltd Net Profit Margin is 9.13% for FY-2025, is above its 3-year median of 5.61%, indicating increasing margins.
Current Level 3-year
Historic Median
Gross Profit Margin (%) 11.3 8.5
Operating Profit Margin (%) 17.81 12.81
Net Profit Margin (%) 9.13 5.61

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Oval Projects Engineering Ltd?
Oval Projects Engineering Ltd Return on Asset is 7.54%, which is above its 3-year historical median of 4.9%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Oval Projects Engineering Ltd?
Oval Projects Engineering Ltd Return on capital employed is 22.79% for FY-2025, which is above its 3-year historical median of 19.35%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 14%, indicating value creation.

Q.7 Return on Equity (ROE) of Oval Projects Engineering Ltd?
Oval Projects Engineering Ltd Return on equity is 20.81% for FY-2025, which is in line with its 3-year historical median of 20.81%, indicating the business is making similar use of its shareholders capital.

Q.8 Cash conversion cycle of Oval Projects Engineering Ltd?
Oval Projects Engineering Ltd Cash conversion cycle is 81 days, in line with its 3-year historical median of 81 days, indicating stable working capital management. However, you need to compare this with its peers in the industry.
Current Level 3-year
Historic Median
Asset Turnover (x) 0.97 0.97
ROE (%) 20.81 20.81
ROCE (%) 22.79 19.35
Cash Conversion Cycle 81 days 81 days

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

Q.9 Debt to Equity ratio of Oval Projects Engineering Ltd?
Oval Projects Engineering Ltd Debt-to-Equity ratio is 0.75, which is above the industry average of 0.38, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Oval Projects Engineering Ltd?
Oval Projects Engineering Ltd Debt to cash flow from operations is -2.66, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Oval Projects Engineering Ltd?

Q.1 Promoter shareholding and pledge status of Oval Projects Engineering Ltd?
Promoters hold 53.12% of the Oval Projects Engineering Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Oval Projects Engineering Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Oval Projects Engineering Ltd vs industry peers?
Oval Projects Engineering Ltd revenue CAGR is 21.70%, compared to the industry median CAGR of 15.92%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 3-year
Industry Median
Revenue Growth (%) 31.2 15.9
Gross Profit Growth (%) 75 40.5
Operating Profit Growth (%) 80 34.4
Net Profit Growth (%) 125 53.6
Operating Efficiency
Current Level 3-year
Industry Median
Asset Turnover (x) 0.97 0.82
ROE (%) 20.81 11.66
ROCE (%) 22.79 14.75
Cash Conversion Cycle (days) 81.49 53

Valuation & price assessment

Q.1 Stock return of Oval Projects Engineering Ltd over the last decade?
Over the last - year(s), the stock has delivered a CAGR of N/A% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
- - - -
Q.2 Valuation ratios of Oval Projects Engineering Ltd vs historical?
The current P/E ratio of 11.34 is lower than its historical median of 13.34, indicating that the stock is trading below its historical average valuation.
Q.3 How do the current valuation ratios compare with 3-year historical median and industry numbers?
Valuation Ratios Current 3-year
Historic Median
3-year
Industry Median
Price to Earnings 11.34 13.34 22.41
Price to Book 1.03 1.01 1.92
Price to Sales 1.04 1.22 1.65
EV to EBITDA 6.83 7.81 12.04

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