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Check Before You Invest : Laxmipati Engineering Works Ltd

BSE: 537669 NSE: ISIN: INE920P01019
  |   Sector:  Construction & Infrastructure   |   Industry:  Ship Building

Snapshot

Q.1 Which industry/sub-sector does Laxmipati Engineering Works Ltd belong to?
Laxmipati Engineering Works Ltd belongs to the Construction & Infrastructure sector, operating specifically within the Ship Building segment.
Q.2 Is Laxmipati Engineering Works Ltd a good quality company?
Laxmipati Engineering Works 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 Laxmipati Engineering Works Ltd undervalued or overvalued?
Laxmipati Engineering Works Ltd appears Fair, as its key valuation ratios are in line with 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 27.08 31.06
Price to Book 20.53 21.54
Price to Sales 3.51 1.48
EV to EBITDA 21.84 12.20
Q.4 Is Laxmipati Engineering Works Ltd a good buy now?
Laxmipati Engineering Works 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 Laxmipati Engineering Works Ltd?
Laxmipati Engineering Works Ltd revenue growth is 24.5% for FY-2025, which is above its 5-year CAGR of 19.16%, indicating faster growth.

Q.2 Gross Profit margin of Laxmipati Engineering Works Ltd?
Laxmipati Engineering Works Ltd Gross profit margin which is the profit after deduction of direct costs, is 11.8% for FY-2025, which is above its 5-year median of 4.4%, indicating increasing margins.

Q.3 Operating Profit Margin of Laxmipati Engineering Works Ltd?
Laxmipati Engineering Works Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 20.1% for FY-2025, which is above its 5-year median of 14.57% indicating increasing margins.

Q.4 Net Profit Margin of Laxmipati Engineering Works Ltd?
Laxmipati Engineering Works Ltd Net Profit Margin is 12.97% for FY-2025, is above its 5-year median of 0.81%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 11.8 4.4
Operating Profit Margin (%) 20.1 14.57
Net Profit Margin (%) 12.97 0.81

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Laxmipati Engineering Works Ltd?
Laxmipati Engineering Works Ltd Return on Asset is 12.41%, which is above its 5-year historical median of 0.59%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Laxmipati Engineering Works Ltd?
Laxmipati Engineering Works Ltd Return on capital employed is 18.57% for FY-2025, which is above its 5-year historical median of 9.83%. 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 Laxmipati Engineering Works Ltd?
Laxmipati Engineering Works Ltd Return on equity is 122.1% for FY-2025, which is above its 5-year historical median of 3.82%, indicating the business is making better use of its shareholders capital.

Q.8 Cash conversion cycle of Laxmipati Engineering Works Ltd?
Laxmipati Engineering Works Ltd Cash conversion cycle is 109 days, in line with its 5-year historical median of 109 days, indicating stable working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 0.96 0.82
ROE (%) 122.1 3.82
ROCE (%) 18.57 9.83
Cash Conversion Cycle 109 days 109 days

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

Q.9 Debt to Equity ratio of Laxmipati Engineering Works Ltd?
Laxmipati Engineering Works Ltd Debt-to-Equity ratio is 5.26, which is above the industry average of 0.43, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Laxmipati Engineering Works Ltd?
Laxmipati Engineering Works Ltd Debt to cash flow from operations is 18.99, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Laxmipati Engineering Works Ltd?

Q.1 Promoter shareholding and pledge status of Laxmipati Engineering Works Ltd?
Promoters hold 73.45% of the Laxmipati Engineering Works Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Laxmipati Engineering Works Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Laxmipati Engineering Works Ltd vs industry peers?
Laxmipati Engineering Works Ltd revenue CAGR is 19.16%, compared to the industry median CAGR of 19.16%, indicating stable growth and maintaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 24.5 19.2
Gross Profit Growth (%) 200 40.4
Operating Profit Growth (%) 66.7 42.1
Net Profit Growth (%) 500 41.2
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.96 0.8
ROE (%) 122.1 4.12
ROCE (%) 18.57 7.58
Cash Conversion Cycle (days) 108.93 76

Valuation & price assessment

Q.1 Stock return of Laxmipati Engineering Works Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 27.4% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
27.4% 65% 104.1% 34.1%
Q.2 Valuation ratios of Laxmipati Engineering Works Ltd vs historical?
The current P/E ratio of 27.08 is lower than its historical median of 31.06, 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 27.08 31.06 32.91
Price to Book 20.53 21.54 6.54
Price to Sales 3.51 1.48 5.01
EV to EBITDA 21.84 12.20 12.87

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