Sadbhav Engineering Limited (SADBHAV) AI Stock Analysis

• Market Cap: ₹1.41B
• Dividend Yield: N/A
• Average Volume (3M): 39.14K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.14
• Revenue Growth: N/A
• EPS Growth: N/A
• Country: IN
• Employees: 217
• Sector: Services
• Sector Strength: N/A
• Industry: Engineering & Construction
• EPS (TTM): -4.23
• Shares Outstanding: 171,570,800
• 10 Day Avg. Volume: 46,217
• 30 Day Avg. Volume: 39,137
• PEG Ratio: 0.01
• Price to Book (P/B): -0.76
• Price to Sales (P/S): 0.18
• P/FCF Ratio: 0.00
• 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: 46 Neutral
• Price Target: ₹8.00 ▼(-26.20% Downside)
• Action: Reiterated Date: 02/21/26
• Date: Action: Reiterated 02/21/26

The score is primarily held back by weak financial performance—continued net losses, very high debt, and negative equity—along with volatile cash generation. Technicals add partial support due to positive near-term momentum, but overbought signals and a weaker long-term trend temper the benefit. Valuation is difficult to justify on earnings due to the negative P/E and lacks a dividend yield reference.

Positive Factors

Improved gross & operating margins

Material improvement in gross and operating margins indicates the core project economics and cost structure are improving. If sustained, higher structural margins can absorb revenue volatility, support cash generation and provide a pathway from operating improvement to eventual profitability and balance-sheet repair.

Sizable asset base

A substantial asset base provides operational capacity and potential collateral for restructuring or refinancing. Over the medium term this tangible footprint supports project execution, asset sales or creditor negotiations, giving the company strategic options to address leverage and preserve operations.

Proven cash generation in strong years

Demonstrated ability to generate strong operating and free cash flow in a prior year shows the business model can convert revenue into cash under favorable conditions. This capability is a durable strength that can help deleverage and fund operations when revenue and execution stabilize.

Negative Factors

Very high leverage and negative equity

Extremely high debt combined with negative shareholder equity materially reduces financial flexibility and raises refinancing, covenant and solvency risk. Over the medium term this constrains investment, increases default probability in downturns, and limits ability to pursue growth or bid on large contracts.

Sustained net losses and revenue decline

Ongoing revenue contraction and recurring net losses erode retained capital and hamper the firm’s ability to self-fund recovery. Persistent negative margins weaken supplier and lender confidence, reduce reinvestment capacity, and make it harder to convert operational margin improvements into lasting profitability.

Volatile cash flows and weak cash conversion

Large swings in operating cash flow and a recent collapse to low/zero free cash flow increase working-capital and funding risk. This volatility undermines planning, forces reliance on external financing, and makes servicing the heavy debt load and sustaining operations much more difficult over the medium term.

Sadbhav Engineering Limited Business Overview & Revenue Model

Company Description

Sadbhav Engineering Limited develops infrastructure projects primarily in India. It undertakes infrastructure projects in the areas of canals, irrigation projects, roads, bridges, and dams that include civil, electrical and mechanical contractor, designer and engineers, structural contractor, and earthwork contractor for repairing, reconstruction, renovation, demolition, and construction. The company also undertakes roads and highway development projects on BOT, DBFOMT, or DBFOT basis, as well as provides engineering, procurement, and construction services for transportation, irrigation, and mining sectors. In addition, it engages in mining activities on contract basis; and energy generation through wind power project. The company was founded in 1988 and is based in Ahmedabad, India.

How the Company Makes Money

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Sadbhav Engineering Limited Financial Statement Overview

Summary

Overall financial quality is weak: revenue declined ~15% in FY2025 and the company still reported a sizable net loss (net margin ~-18%) despite improved gross and operating margins. The balance sheet is highly stressed with very high debt (~37.8B) and negative shareholder equity (FY2025 and FY2024). Cash flows are volatile, with operating cash flow dropping sharply in FY2025 (~0.66B) and free cash flow reported at zero.

Income Statement

Profitability is weak and inconsistent. FY2025 revenue fell ~15%, and while gross and operating profitability improved materially (gross margin ~40% and operating margin ~35%), the company still reported a sizable net loss (net margin ~-18%). The prior years show repeated large losses and volatile operating results, which limits confidence in earnings quality and sustainability.

Balance Sheet

Leverage and capital structure are a major concern. Total debt remains very high (about 37.8B in FY2025), while shareholder equity is negative in FY2025 (and also negative in FY2024), indicating balance-sheet stress and reduced financial flexibility. Although total assets are sizable, the negative equity position makes the debt burden riskier and increases vulnerability to downturns or refinancing pressure.

Cash Flow

Cash generation is volatile. FY2024 showed very strong operating and free cash flow (free cash flow roughly matched net loss in magnitude), but FY2025 operating cash flow dropped sharply to ~0.66B and free cash flow was reported at zero, suggesting weaker cash conversion and/or higher cash needs. Earlier years also show large swings, including a deeply negative operating cash flow in FY2022, which raises execution and working-capital risk.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	10.02B	10.36B	19.23B	17.77B	19.08B	22.34B
Gross Profit	6.22B	4.17B	4.79B	5.78B	3.64B	8.41B
EBITDA	5.69B	4.92B	-1.26B	786.92M	3.57B	9.08B
Net Income	-1.63B	-1.89B	-6.30B	-5.89B	-7.24B	-1.55B
Balance Sheet
Total Assets	66.69B	66.76B	70.49B	98.24B	108.87B	124.84B
Cash, Cash Equivalents and Short-Term Investments	24.61B	24.34B	548.77M	25.36B	1.58B	1.17B
Total Debt	36.76B	37.78B	37.35B	47.75B	57.61B	70.29B
Total Liabilities	68.18B	68.83B	71.64B	94.89B	98.25B	107.00B
Stockholders Equity	-2.23B	-2.41B	-1.25B	1.75B	8.02B	14.45B
Cash Flow
Free Cash Flow	3.68B	0.00	11.44B	17.00B	-30.95B	11.77B
Operating Cash Flow	3.69B	664.37M	11.54B	17.66B	-30.95B	11.84B
Investing Cash Flow	-110.11M	117.88M	717.54M	318.26M	52.52B	1.18B
Financing Cash Flow	-3.35B	-763.86M	-12.83B	-18.48B	-21.07B	-12.88B

Sadbhav Engineering Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RPPINFRA	62 Neutral	₹3.59B	186.32	―	0.47%	-7.32%	-26.92%
Sector *	55 Neutral	$13.29B	17.42	10.03%	0.93%	7.13%	-12.93%
BRNL	47 Neutral	₹1.69B	2.58	―	―	-57.13%	―
SADBHAV	46 Neutral	₹1.41B	-0.64	―	―	―	―
SADBHIN	43 Neutral	₹1.01B	-0.31	―	―	4.63%	67.17%
SICALLOG	39 Underperform	₹13.57B	3.00	―	―	76.34%	94.50%