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Check Before You Invest : BirlaNu Ltd

BSE: 509675 NSE: BIRLANU ISIN: INE557A01011
  |   Sector:  Construction & Infrastructure   |   Industry:  Cement & Construction Materials

Snapshot

Q.1 Which industry/sub-sector does BirlaNu Ltd belong to?
BirlaNu Ltd belongs to the Construction & Infrastructure sector, operating specifically within the Cement & Construction Materials segment.
Q.2 Is BirlaNu Ltd a good quality company?
BirlaNu Ltd is a average quality company, based on a somewhat consistent 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 BirlaNu Ltd undervalued or overvalued?
BirlaNu 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 - 17.57
Price to Book 0.88 1.81
Price to Sales 0.43 0.96
EV to EBITDA 10.21 11.22
Q.4 Is BirlaNu Ltd a good buy now?
BirlaNu Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. 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 BirlaNu Ltd?
BirlaNu Ltd revenue growth is 3.6% for FY-2025, which is below its 5-year CAGR of 11.83%, indicating slower growth.

Q.2 Gross Profit margin of BirlaNu Ltd?
BirlaNu Ltd Gross profit margin which is the profit after deduction of direct costs, is 4% for FY-2025, which is below its 5-year median of 10%, indicating decreasing margins.

Q.3 Operating Profit Margin of BirlaNu Ltd?
BirlaNu Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 4.19% for FY-2025, which is below its 5-year median of 9.17% indicating decreasing margins.

Q.4 Net Profit Margin of BirlaNu Ltd?
BirlaNu Ltd Net Profit Margin is 3.94% for FY-2025, is below its 5-year median of 6.04%, indicating decreasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 4 10
Operating Profit Margin (%) 4.19 9.17
Net Profit Margin (%) 3.94 6.04

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of BirlaNu Ltd?
BirlaNu Ltd Return on Asset is 4.57%, which is below its 5-year historical median of 8.11%, indicating deteriorated asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of BirlaNu Ltd?
BirlaNu Ltd Return on capital employed is 8.65% for FY-2025, which is below its 5-year historical median of 14.63%. 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 BirlaNu Ltd?
BirlaNu Ltd Return on equity is 7.43% for FY-2025, which is below its 5-year historical median of 12.15%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of BirlaNu Ltd?
BirlaNu Ltd Cash conversion cycle is 45 days, above its 5-year historical median of 33 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) 1.2 1.27
ROE (%) 7.43 12.15
ROCE (%) 8.65 14.63
Cash Conversion Cycle 45 days 33 days

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

Q.9 Debt to Equity ratio of BirlaNu Ltd?
BirlaNu Ltd Debt-to-Equity ratio is 0.23, which is lower the industry average of 0.36, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of BirlaNu Ltd?
BirlaNu Ltd Debt to cash flow from operations is 5.32, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of BirlaNu Ltd?

Q.1 Promoter shareholding and pledge status of BirlaNu Ltd?
Promoters hold 40.57% of the BirlaNu Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

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

Q.1 Revenue growth of BirlaNu Ltd vs industry peers?
BirlaNu Ltd revenue CAGR is 11.83%, compared to the industry median CAGR of 5.89%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 3.6 5.9
Gross Profit Growth (%) -42.7 -0.6
Operating Profit Growth (%) -37.4 -2.5
Net Profit Growth (%) -11.7 -8.8
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 1.2 0.82
ROE (%) 7.43 7.28
ROCE (%) 8.65 9.38
Cash Conversion Cycle (days) 45.34 17

Valuation & price assessment

Q.1 Stock return of BirlaNu Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 10.3% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
10.3% -21.4% -19.6% -41.3%
Q.2 Valuation ratios of BirlaNu Ltd vs historical?
The current P/E ratio of 0 is lower than its historical median of 17.57, 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 - 17.57 22.88
Price to Book 0.88 1.81 1.92
Price to Sales 0.43 0.96 1.41
EV to EBITDA 10.21 11.22 11.61

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