RKEC Projects Ltd. (RKEC) AI Stock Analysis

• Market Cap: ₹932.99M
• Dividend Yield: N/A
• Average Volume (3M): 73.51K
• Price to Earnings (P/E): 20.3
• Beta (1Y): 1.22
• Revenue Growth: -12.26%
• EPS Growth: -36.87%
• Country: IN
• Employees: 481
• Sector: Services
• Sector Strength: N/A
• Industry: Engineering & Construction
• EPS (TTM): 0.66
• Shares Outstanding: 23,990,600
• 10 Day Avg. Volume: 33,835
• 30 Day Avg. Volume: 73,506
• PEG Ratio: 22.15
• Price to Book (P/B): 0.85
• Price to Sales (P/S): 0.38
• P/FCF Ratio: -2.26
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 49 Neutral
• Price Target: ₹39.00 ▼(-28.73% Downside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

The score is primarily weighed down by weak cash generation and deeply negative free cash flow despite moderate profitability and manageable leverage. Technicals also remain soft with the price below key longer-term moving averages and a negative MACD, while valuation (P/E ~12.9) is a modest offset.

Positive Factors

Sustainable operating margins

Reported gross margins (~21%) and EBIT margins (~11.7%) show durable operating profitability for a contracting firm. Consistent margins provide a structural buffer against input cost swings, support reinvestment in project delivery capability, and underpin medium-term earnings resilience if volumes recover.

Manageable leverage

Debt-to-equity near 0.9, improving from ~1.04, indicates a capital structure that is leveraged but not excessive for an engineering contractor. This relative balance affords flexibility to bid and execute projects and reduces immediate refinancing pressure, supporting medium-term operational continuity.

Prior multi-year revenue expansion

A track record of multi-year revenue growth through FY2025 indicates the company can win and scale projects, reflecting competitive positioning and execution capability. This historical ability to grow provides a foundation for recovery and supports longer-term prospects if orderflow normalizes.

Negative Factors

Deeply negative free cash flow

Persistently negative free cash flow materially weakens internal funding ability and forces reliance on external financing. For a working-capital heavy contractor, ongoing FCF deficits elevate liquidity and refinancing risk, constrain investment in backlog delivery, and can compress margins over multiple quarters.

Weak operating cash flow

Very weak OCF and a prior-year negative result signal poor cash conversion from revenue, likely from working-capital timing or project execution. Structural OCF weakness undermines resilience to contract delays, increases dependence on credit, and impairs sustainable cash reinvestment into project capabilities.

Recent sharp revenue decline

A sharp TTM revenue decline reduces predictability of backlog, utilization and margins. For a cyclical engineering contractor, volatile top-line performance raises execution and margin risk, complicates workforce and capex planning, and makes earnings recovery dependent on consistent order wins.

RKEC Projects Ltd. Business Overview & Revenue Model

Company Description

RKEC Projects Limited operates as an engineering construction company in India. The company constructs marine structures, such as wharves, berths, jetties, mooring dolphins, intake structures break waters, and coastal-shore protection works; and roads and bridges, as well as steel girders/PSU girders, and composite girders. It also undertakes building and infrastructure works, including civil works for power and refinery projects port development works, transmission lines, sports complex, buildings works, water intake systems, heavy RCC pre-stressed concrete and steel structures, and framed warehouses/industrial sheds; and rural electrification and LT/HT works. The company was incorporated in 2005 and is based in Visakhapatnam, India.

How the Company Makes Money

RKEC Projects Ltd. Financial Statement Overview

Summary

Operating profitability is moderate (TTM gross margin ~21%, EBIT margin ~11.7%, net margin ~4.4%) and leverage is manageable (TTM debt-to-equity ~0.91). However, the key drag is cash conversion: operating cash flow is very weak in TTM and free cash flow is deeply negative (TTM -394.9m; FY2025 -708.8m), alongside a sharp TTM revenue decline (-23.5%).

Income Statement

Profitability is moderate and relatively steady: TTM (Trailing-Twelve-Months) gross margin is ~21% with EBIT margin ~11.7% and net margin ~4.4%, broadly in line with FY2025 net margin (~4.7%). However, growth has turned volatile—after strong multi-year expansion (FY2023–FY2025), revenue declined sharply in TTM (Trailing-Twelve-Months) (-23.5%), and net income in TTM is well below FY2024/FY2025 levels, suggesting softer project execution/volume and a less favorable mix.

Balance Sheet

Leverage looks manageable but not conservative. TTM (Trailing-Twelve-Months) debt-to-equity is ~0.91 (improved vs FY2025 ~1.04), supported by a larger equity base. Returns on equity are mid-single to low-double digit (TTM ~8.3%; FY2025 ~10.6%), indicating acceptable but not standout efficiency. Key weakness is that the balance sheet remains meaningfully debt-funded for a cyclical, working-capital-heavy contracting business, which can amplify downturn risk.

Cash Flow

Cash generation is the primary concern. Operating cash flow is very weak in TTM (Trailing-Twelve-Months) (~9.2m) and was negative in FY2025, pointing to working-capital strain and/or project cash timing issues. Free cash flow is deeply negative in both TTM (Trailing-Twelve-Months) (-394.9m) and FY2025 (-708.8m) with continued deterioration, implying funding needs despite reported profitability. While FY2024 showed stronger operating cash flow, the recent reversal raises liquidity and execution risk if it persists.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	2.81B	4.22B	3.53B	2.78B	2.11B	2.08B
Gross Profit	562.00M	650.93M	1.06B	772.97M	660.16M	571.44M
EBITDA	397.69M	583.24M	509.31M	519.58M	294.44M	289.99M
Net Income	95.11M	200.38M	199.58M	124.27M	71.19M	127.64M
Balance Sheet
Total Assets	5.74B	5.81B	4.66B	4.40B	3.67B	3.78B
Cash, Cash Equivalents and Short-Term Investments	504.25M	470.60M	130.47M	67.91M	261.45M	8.43M
Total Debt	1.93B	1.95B	1.50B	1.16B	1.41B	1.11B
Total Liabilities	3.64B	3.92B	2.97B	2.92B	2.30B	2.48B
Stockholders Equity	2.10B	1.89B	1.69B	1.49B	1.37B	1.30B
Cash Flow
Free Cash Flow	-394.90M	-708.75M	-19.73M	-107.25M	104.03M	-631.57M
Operating Cash Flow	9.15M	-128.16M	241.27M	160.28M	117.18M	-367.71M
Investing Cash Flow	-271.92M	-439.38M	-310.50M	52.07M	-15.18M	31.84M
Financing Cash Flow	174.59M	370.02M	131.79M	-405.88M	151.01M	301.87M

RKEC Projects Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 54.72
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IN:RKEC, the sentiment is Negative. The current price of 54.72 is above the 20-day moving average (MA) of 43.10, above the 50-day MA of 46.48, and below the 200-day MA of 62.84, indicating a bearish trend. The MACD of -2.03 indicates Positive momentum. The RSI at 35.46 is Neutral, neither overbought nor oversold. The STOCH value of 25.98 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IN:RKEC.

RKEC Projects Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	55 Neutral	$13.29B	17.42	10.03%	0.93%	7.13%	-12.93%
BRNL	50 Neutral	₹1.48B	2.58	―	―	-57.13%	―
RKEC	49 Neutral	₹932.99M	20.28	―	―	-12.26%	-36.87%
SADBHAV	46 Neutral	₹1.50B	-0.64	―	―	―	―
ARSSINFRA	43 Neutral	₹1.25B	-678.38	―	―	-75.03%	-17499.32%
SADBHIN	43 Neutral	₹1.07B	-0.31	―	―	4.63%	67.17%