Sadbhav Engineering Limited (SEL) is an Indian civil engineering and construction company headquartered in Ahmedabad. Founded in 1988 by Vishnubhai M. Patel, the company has implemented projects in the construction of roads & highways, bridges, mining, and irrigation-supporting infrastructure.
SADBHVA Share Price Current Performance Growth as on 11 June’ 2024:
Sadhbav Engineering Ltd Stock Price Currently at 26.50 INR −0.70 (-2.57%)
- 5 years: -240.05 (-90.06%) past 5 years
- 1 Year: +14.80 (126.50%) past year
- 6 Months: +3.00 (12.77%) past 6 months
- YTD: +4.70 (21.56%) year to date
- 1 Month: -30 (-4.68%) past month
- 5 Days: +1.85 (7.51%) past 5 days
Sadbhav Engineering Ltd- SEL Stock Price is currently trading at a low valuation.
Current Valuation Metrics:
- Market Cap: ₹459.64 Cr (as of June 11, 2024)
- Price-to-Sales Ratio: 0.24 (Considered low)
- Book Value: ₹-7.31 (Negative, indicating potential financial distress)
Some Key Reasons for Low Valuation:
SADBHAV has a substantial debt burden, which has raised concerns about its financial stability and ability to repay its obligations. This has significantly impacted its valuation.
The company has experienced a decline in profitability in recent years, with negative net income in the most recent quarter. Investors are wary of companies with low or negative earnings.
SADBHAV’s sales growth has been underwhelming over the past five years, indicating difficulties in generating revenue and expanding its business.
Despite the current low valuation, the future outlook for SADBHAV is uncertain. The company’s ability to address its debt issues, improve profitability, and secure new projects will be crucial in determining its future valuation.
About Sadbhav Engineering Ltd
Sadbhav Engineering Limited (SEL) is an Indian civil engineering and construction company headquartered in Ahmedabad. Founded in 1988 by Vishnubhai M. Patel, the company has implemented projects in the construction of roads & highways, bridges, mining, and irrigation-supporting infrastructure.
Key Details of Sadhbav Engineering Limited:
- Founded: October 3, 1988
- Founder: Vishnubhai M. Patel
- Headquarters: Ahmedabad, India
- Industry: Infrastructure, Construction & Civil Engineering
- Traded as:
- NSE: SADBHAV
- BSE: 532710
SEL’s Business Activities:
SEL is engaged in the construction of:
- Roads and highways (both state and national)
- Bridges
- Mining infrastructure
- Irrigation-supporting infrastructure
SEL’s Notable Projects:
Some of the notable projects executed by SEL include:
- Ahmedabad-Dholera Expressway
- Eastern Peripheral Expressway (EPE)
- Yamunanagar Panchkula (Haryana)
- Mysore Bellary (Karnataka)
- Delhi Metro Rail Corporation (DMRC) projects
- Sardar Sarovar Narmada Nigam Limited Canal Project
SEL Subsidiary:
SEL has a subsidiary called Sadbhav Infrastructure Project Limited (SIPL) that focuses on Build-Operate-Transfer (BOT) road projects.
Why Sadbhav Engineering Ltd Stock Price is low Valuated?
Sadbhav Engineering Limited (SEL) stock is considered low-rated due to several factors:
Financial Performance:
- High Debt Levels: SEL has a significant debt burden, which has raised concerns about its financial stability and ability to repay its obligations.
- Low Profitability: The company has experienced a decline in profitability in recent years, with negative net income in the most recent quarter.
- Poor Sales Growth: SEL’s sales growth has been underwhelming over the past five years, raising concerns about its ability to generate revenue and grow its business.
Corporate Governance:
- Pledged Promoter Shares: A significant portion of promoter shares are pledged, indicating potential financial stress and raising concerns about the management’s commitment to the company.
- Reduced Promoter Holding: The promoter holding has decreased over the last quarter, which could be interpreted as a lack of confidence in the company’s future prospects.
Operational Issues:
- Project Delays and Cost Overruns: SEL has faced delays and cost overruns in some of its projects, which has impacted its profitability and reputation.
- Contingent Liabilities: The company has a significant amount of contingent liabilities, which could further worsen its financial situation if they materialize.
Market Sentiment:
Negative Investor Sentiment: Due to the above factors, investor sentiment towards SEL is negative, leading to a low rating for its stock.
Sadbhav Engineering performance growth in future:
Predicting the future performance of any stock, including Sadbhav Engineering Limited (SEL), is inherently uncertain. However, we can analyze various factors and trends to gain insights into potential growth:
Challenges for SEL:
- High Debt: SEL’s significant debt burden is a major concern. The company needs to address this issue effectively to improve its financial health and regain investor confidence.
- Weak Financials: Recent financial performance has been weak, with declining profits and negative net income in the most recent quarter. This needs to be turned around for sustainable growth.
- Project Execution Risks: Delays and cost overruns in projects have plagued the company, impacting its profitability and reputation. Effective project management is crucial for future growth.
Opportunities for SEL:
- Government Infrastructure Push: The Indian government’s focus on infrastructure development presents significant opportunities for companies like SEL. However, the company needs to secure new projects and execute them efficiently.
- Debt Restructuring: If SEL can successfully restructure its debt and improve its financial position, it could attract more investors and boost its stock performance.
- Order Book: Although the current order book is not very strong, the company has recently bagged a few new projects, which could contribute to future growth if executed well.
Analysts Views on Sadhbav Engineering Limited Shares:
Analyst opinions on SEL’s future performance are mixed. Some believe that the company’s strong order book and the government’s infrastructure push could drive growth, while others are concerned about its high debt and weak financials.
Key Points from Analysis:
- Low Valuation: Sadbhav Engineering stock is currently trading at a low valuation due to its weak financial performance.
- Growth Concerns: The company’s lack of growth prospects and declining revenue are major concerns for investors.
- Financial Risk: High debt levels and negative net income raise concerns about the company’s financial stability.
Simply Wall St: They’ve done several reports on Sadbhav Engineering, focusing on:
Price vs. Growth: They highlight that while the stock’s price-to-sales ratio is low, it’s justified by the company’s poor revenue performance and lack of growth forecast. (Source: Simply Wall St)
FAQ’s
Sadhbav Engineering Share Price Target 2024 and 2025
At the current scenario the Sadhbav Share Price Target in 2024 and 2025 is unfortunate due to company low valuation. Target price and performance in upcoming duration depends on the overall performance management by the company and then only some analysis can be generate.
Conclusion: Overall, Sadbhav Engineering’s future performance depends on its ability to overcome its current challenges, capitalize on emerging opportunities, and execute projects efficiently. If the company can address its debt issues, improve its financial performance, and secure new projects, it may see a positive growth trajectory in the future.
Refences/source: Simply Wall St, NSE & BSE
Disclaimer: This information is not financial advice. Please conduct your own research and consult with a financial advisor before making any investment decisions. The article is only for educational and information purpose only.