Market Performance and Price Trends
On the day of reporting, Deepak Builders & Engineers India Ltd’s share price fell by 2.86%, underperforming the Sensex which declined by 0.91%. Despite this, the stock marginally outperformed its sector, Construction - Real Estate, which dropped 2.7%. However, the broader trend remains negative with the stock trading below all key moving averages – 5-day, 20-day, 50-day, 100-day, and 200-day – indicating persistent bearish momentum.
Over various time horizons, the stock’s performance has been notably weak. It has declined by 11.13% over the past week, 24.75% over the last month, and a substantial 41.00% over the past three months. The one-year return stands at a negative 48.64%, starkly contrasting with the Sensex’s positive 6.58% gain over the same period. Year-to-date, the stock has lost 21.77%, while the Sensex has fallen by 4.30%. Over three and five years, the stock has shown no appreciable gains, remaining flat, whereas the Sensex has delivered returns of 33.83% and 66.86% respectively. The ten-year performance is similarly stagnant at 0.00%, compared to the Sensex’s impressive 233.77% growth.
Financial Results and Profitability Metrics
The company’s recent financial disclosures have underscored the severity of its challenges. In the quarter ending September 2025, Deepak Builders & Engineers India Ltd reported a sharp decline in operating profit by 48.83%, contributing to a “Very Negative” rating for the period. This marks the third consecutive quarter of negative results, highlighting a sustained downturn in financial health.
Net sales for the quarter stood at ₹45.05 crores, down 69.1% compared to the average of the previous four quarters. Profit after tax (PAT) also contracted significantly, falling 65.4% to ₹4.98 crores relative to the prior four-quarter average. The operating profit to interest coverage ratio reached a low of 2.27 times, signalling tighter financial leverage and reduced capacity to service debt obligations comfortably.
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Long-Term Performance and Valuation Considerations
Deepak Builders & Engineers India Ltd’s long-term performance has been below par relative to benchmark indices and sector peers. The stock has underperformed the BSE500 index over the last three years, one year, and three months, reflecting persistent challenges in generating shareholder value. Despite this, the company has demonstrated healthy growth in operating profit on an annualised basis, with a rate of 51.41%, indicating some underlying operational expansion.
From a valuation standpoint, the company maintains a Return on Capital Employed (ROCE) of 14.9%, which is considered very attractive. The enterprise value to capital employed ratio stands at 1, suggesting a valuation that may be reasonable relative to the capital base. However, these positives have not translated into share price appreciation, as profits have declined by 6% over the past year, coinciding with the steep share price depreciation.
Shareholding and Market Sentiment
The majority shareholding remains with the promoters, indicating concentrated ownership. The company’s Mojo Score has deteriorated to 29.0, with a corresponding Mojo Grade of Strong Sell as of 18 Dec 2025, downgraded from a previous Sell rating. This grading reflects the cumulative impact of financial underperformance, declining profitability, and market sentiment.
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Sector Context and Comparative Analysis
The construction sector, particularly the real estate segment, has experienced volatility, with the sector index declining by 2.7% on the reporting day. Deepak Builders & Engineers India Ltd’s sharper declines relative to the sector and broader market indices underscore the company’s specific difficulties. The stock’s consistent underperformance across multiple time frames highlights the challenges faced in regaining investor confidence and market positioning.
While the company’s valuation metrics such as ROCE and enterprise value to capital employed ratio remain favourable, the persistent decline in sales and profits over recent quarters has weighed heavily on the stock price. The operating profit to interest coverage ratio at 2.27 times is the lowest recorded, indicating increased financial strain compared to historical levels.
Summary of Key Financial Metrics
• Net Sales (Quarterly): ₹45.05 crores, down 69.1% versus previous four-quarter average
• PAT (Quarterly): ₹4.98 crores, down 65.4% versus previous four-quarter average
• Operating Profit decline (Sep 2025 quarter): -48.83%
• Operating Profit to Interest Coverage (Quarterly): 2.27 times (lowest)
• Mojo Score: 29.0 (Strong Sell)
• Market Cap Grade: 4
• Share price proximity to 52-week low: 0.96% above ₹92.85
• Yearly stock return: -48.64% versus Sensex +6.58%
The data collectively illustrates a company facing significant headwinds, with financial results and market performance reflecting a challenging environment. The stock’s all-time low closing price is a clear indicator of the severity of the situation as of January 2026.
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