Ajmera Realty & Infra India Faces Debt Concerns Amid Strong Profit Growth and Cash Flow

Ajmera Realty & Infra India has recently undergone an adjustment in evaluation, reflecting a reassessment of its market position and financial metrics. The company, which operates in the construction and real estate sector, has demonstrated a compound annual growth rate (CAGR) of 10.17% in operating profits over the past five years. However, concerns have been raised regarding its debt servicing capabilities, as indicated by a Debt to EBITDA ratio of 6.71 times.
The company's average Return on Equity (ROE) is reported at 8.20%, suggesting challenges in generating profitability relative to shareholders' funds. Furthermore, Ajmera Realty's Return on Capital Employed (ROCE) stands at 15, accompanied by an enterprise value to capital employed ratio of 2.7, which may imply a higher valuation relative to its earnings potential.

Despite these challenges, Ajmera Realty has achieved a notable return of 104.19% over the past year, with profits increasing by 81.7%, resulting in a PEG ratio of 0.4. The company has also reported positive operating cash flow, reaching Rs 219.74 crore, marking its highest performance to date over four consecutive quarters.

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