Semac Construction Ltd Reports Very Positive Quarterly Financial Performance Amidst Challenging Market Returns

Quarterly Financial Performance: A Closer Look

In the latest six months, Semac Construction reported net sales of ₹116.26 crores, reflecting a robust growth rate of 47.97% compared to the previous period. This surge in sales is a key driver behind the company’s improved financial trend score, which has risen sharply from 14 to 22 over the past three months. The company’s operating profit to net sales ratio also reached its highest quarterly level at 2.58%, signalling better cost control and operational leverage.

Profitability metrics further underscore this positive momentum. The Profit Before Depreciation, Interest and Tax (PBDIT) for the quarter hit a peak of ₹1.52 crores, while the operating profit to interest coverage ratio improved to 1.05 times, the highest recorded in recent quarters. This indicates that Semac Construction is better positioned to service its interest obligations, a critical factor given the construction sector’s capital-intensive nature.

On the bottom line, the company posted a Profit After Tax (PAT) of ₹1.40 crores, the highest quarterly figure to date, supported by an Earnings Per Share (EPS) of ₹4.49. These figures represent a significant turnaround from previous quarters and highlight the company’s ability to convert revenue growth into tangible shareholder returns.

Balance Sheet and Liquidity Strength

Semac Construction’s liquidity position has also improved significantly. Cash and cash equivalents at the half-year mark stood at ₹63.20 crores, the highest level recorded in recent history. This strong cash position provides the company with a buffer to navigate the cyclical nature of the construction industry and invest in growth opportunities.

However, the company’s debt-equity ratio has also risen to 0.66 times, the highest in recent periods, signalling increased leverage. While this level remains moderate, it warrants close monitoring given the sector’s sensitivity to interest rate fluctuations and economic cycles.

Non-Operating Income and Profitability Nuances

One notable aspect of the quarter is the composition of Semac Construction’s profit before tax (PBT). Non-operating income accounted for 121.62% of PBT, indicating that a significant portion of the company’s profitability is derived from sources outside its core operations. This reliance on non-operating income could introduce volatility in future earnings and should be factored into any investment decision.

Stock Price Movement and Market Comparison

Semac Construction’s stock price closed at ₹266.35 on 6 February 2026, up 9.61% from the previous close of ₹243.00. The stock traded within a narrow intraday range of ₹265.85 to ₹267.30. Despite this recent uptick, the stock remains well below its 52-week high of ₹567.00, reflecting broader market scepticism.

When compared to the Sensex, Semac Construction’s returns have been disappointing over multiple time horizons. The stock outperformed the Sensex over the past week with a 12.12% gain versus the benchmark’s 0.91%, but it underperformed over the one-month (-11.29% vs. -2.49%), year-to-date (-13.73% vs. -2.24%), one-year (-10.70% vs. 6.44%), three-year (-75.12% vs. 36.94%), five-year (-55.32% vs. 64.22%), and ten-year (-58.38% vs. 238.44%) periods. This long-term underperformance highlights the challenges the company faces in regaining investor confidence despite recent operational improvements.

Mojo Score and Analyst Ratings

Reflecting these mixed signals, Semac Construction’s Mojo Score currently stands at 23.0, categorised as a Strong Sell. This represents a downgrade from the previous Sell rating on 8 December 2025, underscoring the cautious stance of analysts despite the company’s improved financial trend. The market capitalisation grade remains low at 4, consistent with the company’s micro-cap status and limited liquidity.

Sector Context and Outlook

The construction sector remains highly cyclical and sensitive to macroeconomic factors such as interest rates, government infrastructure spending, and raw material costs. Semac Construction’s recent financial improvements are encouraging, but the company must sustain revenue growth and margin expansion to overcome sector headwinds and improve its market standing.

Investors should weigh the company’s strong quarterly performance against its elevated leverage and reliance on non-operating income. The stock’s long-term underperformance relative to the Sensex also suggests that a cautious approach is warranted until consistent operational improvements translate into sustained earnings growth and valuation re-rating.

Conclusion

Semac Construction Ltd’s latest quarterly results mark a significant positive shift in its financial trajectory, with strong revenue growth, improved profitability, and enhanced liquidity. However, the company’s elevated debt levels and dependence on non-operating income introduce risks that investors must consider. While the recent stock price rally is a positive signal, the company’s long-term underperformance relative to the broader market and its current Strong Sell Mojo Grade indicate that further progress is needed before a more favourable outlook can be established.

For investors tracking mid-cap construction stocks, Semac Construction’s evolving financial trend merits close attention, but a balanced view that incorporates both the opportunities and challenges is essential.

Upgrade at special rates, valid only for the next few days. Claim Your Special Rate →