RKEC Projects Faces Financial Challenges Amidst Rising Costs and Declining Profits

RKEC Projects, a microcap player in the construction industry, has recently undergone a financial trend adjustment reflecting its ongoing challenges. The company's financial performance for the quarter ending June 2025 has been marked by a negative trajectory, with its score showing a slight improvement over the past three months.
Key metrics reveal significant hurdles for RKEC Projects. The profit after tax (PAT) for the latest six months stands at Rs 6.09 crore, reflecting a decline of 43.66%. Similarly, profit before tax (PBT) less other income for the quarter is reported at Rs 4.08 crore, down by 42.86%. The company has also seen a notable rise in interest expenses, which have grown by 21.44% over the past nine months, contributing to a challenging financial landscape.

Additionally, the return on capital employed (ROCE) is at a low of 12.87%, and the debt-equity ratio has reached its highest point at 1.04 times. Net sales for the quarter are reported at Rs 76.07 crore, the lowest in recent times.

In terms of market performance, RKEC Projects has faced a stark contrast compared to the Sensex, with a year-to-date stock return of -28.93% against the Sensex's positive return of 4.17%. Over the past year, the stock has declined by 52.46%, while the Sensex has shown a modest gain of 2.02%. However, the company has demonstrated resilience over a three-year period, with a return of 51.53%, outperforming the Sensex's 39.17% return.