Shankara Building Products Ltd. (SHANKARA) AI Stock Analysis

• Market Cap: ₹2.53B
• Dividend Yield: 0.68%
• Average Volume (3M): 69.61K
• Price to Earnings (P/E): 51.2
• Beta (1Y): 0.74
• Revenue Growth: -3.36%
• EPS Growth: -6.25%
• Country: IN
• Employees: 725
• Sector: Services
• Sector Strength: N/A
• Industry: Home Improvement
• EPS (TTM): 0.51
• Shares Outstanding: 24,249,327
• 10 Day Avg. Volume: 171,315
• 30 Day Avg. Volume: 69,611
• PEG Ratio: -0.58
• Price to Book (P/B): 0.41
• Price to Sales (P/S): 0.06
• P/FCF Ratio: 9.47
• 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: 76 Outperform
• Price Target: ₹118.00 ▼(-7.67% Downside)
• Action: Upgraded Date: 01/07/26
• Date: Action: Upgraded 01/07/26

The score is driven mainly by strong financial performance (growth, low leverage, improving cash flow) and an attractive valuation (very low P/E). This is partially offset by mixed technicals, with a negative MACD and price still below longer-term moving averages despite short-term strength.

Positive Factors

Revenue growth & gross margin improvement

Sustained top-line expansion with an 18% YoY revenue increase and rising gross margin indicates stronger product mix, scale benefits and improved sourcing. Over 2-6 months this supports durable demand capture, better bargaining with suppliers and potential margin stabilization if mix persists.

Low financial leverage

Very low leverage and a strong equity base give the company financial flexibility to fund store expansion, inventory and working capital without heavy refinancing risk. This balance-sheet strength supports resilience through cyclical construction demand swings over the medium term.

Improving cash generation

Positive free cash flow and good operating cash conversion imply higher quality earnings and reduced reliance on external funding. Durable cash generation enables reinvestment in distribution, inventory management and retail footprint, strengthening long-term operational sustainability.

Negative Factors

Thin net and EBITDA margins

Very low operating and net margins reflect a trading-intensive model with limited pricing power. Over months this constrains internal capital for expansion, makes returns sensitive to input-cost inflation, and reduces buffer against demand slowdowns, pressuring long-term profitability.

Inconsistent growth metrics

Conflicting growth signals and negative multi-period metrics point to volatility in sales and earnings. This suggests cyclical exposure and execution variability that could undermine the durability of recent improvements and complicate planning for sustained expansion over the medium term.

Heavy reliance on commodity categories

A meaningful portion of sales from low-margin commodities increases exposure to raw-material price swings and intense competition. Structurally this limits margin expansion, raises inventory/working-capital needs, and makes long-term profitability sensitive to sector cycles and supplier dynamics.

Shankara Building Products Ltd. Business Overview & Revenue Model

Company Description

Shankara Building Products Limited operates as a retailer of home improvement and building products in India. It operates through Retail, Channel, and Enterprise segments. The company offers structural steel products, cement, TMT bars, hollow blocks, pipes and tubes, roofing solutions, welding accessories, primers, solar heaters, plumbing products, tiles, sanitary ware, water tanks, plywood, kitchen sinks, and lighting, flooring, electricals, interior-exterior finishing, irrigation, and other allied products. It also processes roofing sheets, steel pipes and tubes, cold rolled strips, and color coated roofing sheets, as well as operates as general hardware and wholesale traders. The company serves homeowners, professional customers, and small enterprises; end users, contractors, and OEMs; and other dealers and retailers. As of June 10, 2022, it operated 91 Shankara Buildpro brand stores. The company was formerly known as Shankara Infrastructure Materials Limited and changed its name to Shankara Building Products Limited in July 2006. Shankara Building Products Limited was incorporated in 1995 and is headquartered in Bengaluru, India.

How the Company Makes Money

Shankara makes money primarily by selling building materials and home improvement products through a combination of (1) retail sales via its own stores and (2) B2B/B2C distribution supply to contractors, project customers, and other trade channels. Its revenue model is largely trading/merchandising-based: the company procures products (from manufacturers and brands across categories such as steel, cement, roofing, plumbing/sanitary, electricals, tiles, paints, and allied materials), holds inventory across its network, and earns a gross margin on resale. A meaningful portion of sales typically comes from high-throughput commodity categories (e.g., structural steel and cement), which drive volumes, while complementary/finishing categories (e.g., tiles, sanitaryware, electricals, paints, and other home-improvement items) can contribute higher per-unit margins and help improve basket size. Earnings are influenced by factors such as product mix (commodity vs. value-added categories), ability to source efficiently, inventory management and working-capital discipline, store/distribution scale, and demand conditions in residential construction and renovation. Specific details on segment-wise revenue split, margin by category, or named strategic partnerships are null.

Shankara Building Products Ltd. Financial Statement Overview

Summary

Strong revenue growth (~18% YoY) and improving gross margin support a solid operating picture, backed by low leverage (debt-to-equity 0.12) and a strong equity base (48.17%). Profitability is positive but thin (net margin 1.36%), and while free cash flow has turned positive (₹375.7m), consistency in cash generation still needs monitoring.

Income Statement

Shankara Building Products Ltd. has demonstrated strong revenue growth with a significant increase from ₹48.28 billion in 2024 to ₹56.97 billion in 2025, a growth rate of approximately 18%. The gross profit margin stands at 5.58% in 2025, showing improvement from previous years. The net profit margin is 1.36%, indicating profitability, yet there is room for enhancement. EBIT and EBITDA margins are 4.56% and 2.97% respectively, reflecting solid operational performance. Overall, the income statement indicates robust growth and profitability, albeit with some margin pressure.

Balance Sheet

The company maintains a healthy balance sheet with a debt-to-equity ratio of 0.12 in 2025, signaling low financial leverage. The return on equity is 8.92%, suggesting efficient use of equity to generate profits. The equity ratio is 48.17%, indicating a strong equity base relative to total assets. The company's financial stability is further supported by a consistent increase in stockholders' equity over the years. However, minor fluctuations in total debt levels require monitoring.

Cash Flow

There is a positive trend in cash flow management with free cash flow improving to ₹375.7 million in 2025 from negative figures in 2024. The operating cash flow to net income ratio is 0.82, indicating a good conversion of income into cash flow. The free cash flow to net income ratio is 0.49, demonstrating effective cash generation relative to income. Although free cash flow growth was negative from 2024 to 2025, the overall cash flow position is strengthening.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	50.00B	56.97B	48.28B	40.30B	24.09B	20.32B
Gross Profit	2.82B	3.18B	2.61B	2.24B	1.59B	1.43B
EBITDA	1.51B	1.69B	1.52B	1.25B	876.50M	771.44M
Net Income	733.80M	774.00M	811.30M	630.50M	343.20M	138.50M
Balance Sheet
Total Assets	6.69B	18.02B	15.86B	12.92B	10.41B	9.26B
Cash, Cash Equivalents and Short-Term Investments	95.90M	298.30M	344.00M	58.70M	24.80M	109.04M
Total Debt	636.30M	1.04B	866.50M	878.40M	1.33B	1.69B
Total Liabilities	2.31B	9.34B	7.88B	6.49B	4.85B	4.04B
Stockholders Equity	4.39B	8.68B	7.98B	6.43B	5.56B	5.22B
Cash Flow
Free Cash Flow	-381.00M	375.70M	-204.60M	472.10M	497.10M	1.16B
Operating Cash Flow	-102.90M	636.00M	97.20M	919.60M	696.40M	1.33B
Investing Cash Flow	-282.10M	-263.90M	-272.00M	-452.00M	-183.80M	-81.17M
Financing Cash Flow	100.00K	-423.70M	399.60M	-433.70M	-596.80M	-1.28B

Shankara Building Products Ltd. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 127.80
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IN:SHANKARA, the sentiment is Neutral. The current price of 127.8 is above the 20-day moving average (MA) of 104.83, above the 50-day MA of 106.77, and below the 200-day MA of 177.11, indicating a neutral trend. The MACD of -0.43 indicates Negative momentum. The RSI at 50.95 is Neutral, neither overbought nor oversold. The STOCH value of 54.23 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for IN:SHANKARA.

Shankara Building Products Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SHANKARA	76 Outperform	₹2.53B	51.20	―	0.68%	-3.36%	-6.25%
SBCL	70 Outperform	₹23.89B	27.69	―	0.67%	4.56%	8.11%
UNIPARTS	70 Outperform	₹19.85B	16.41	―	3.06%	-3.81%	14.23%
RAMKY	61 Neutral	₹32.97B	12.27	―	―	-15.09%	-15.98%
CAPACITE	60 Neutral	₹15.20B	10.65	―	―	15.23%	8.61%
Sector *	55 Neutral	$13.29B	17.42	10.03%	0.93%	7.13%	-12.93%

Shankara Building Products Ltd. Corporate Events

Shankara Buildpro Gains BSE and NSE Approval for Equity Listing After Demerger

Shankara Building Products Limited has announced that Shankara Buildpro Limited, the resulting company formed under a court-approved Scheme of Arrangement, has received approvals from both BSE Limited and the National Stock Exchange of India for the listing and trading of its equity shares, effective January 9, 2026. The separate listing of Shankara Buildpro marks a key milestone in the demerger process, potentially providing greater transparency and value discovery for shareholders while allowing each entity to focus more sharply on its core operations and strategic priorities within the building materials and retail space.