Hindustan Construction Company Ltd

Price story Before the numbers, the tape. A stock price moves through four repeating seasons: a flat base (stage 1), an advance (2), a top (3), a decline (4). Where the price sits in that cycle frames everything below.

Hindustan Construction Company Ltd trades at ₹22.4, in a confirmed uptrend and 6 weeks into that stage. That is +2.5% against its own 200-day average. It sits at 61% of a 52-week range of ₹15 to ₹27. On relative strength it has been ahead of the NIFTY 500 on a trailing-13-week view for 19 straight weeks.

Today the stock is in a confirmed uptrend — week 6 of stage 2, confirmed. At ₹22.4 it trades +2.5% versus its 200-day average and sits at 61% of its 52-week range (₹15–₹27).

Against the market, two honest reads. Cumulative: over the last 10.3 years the stock moved +55% while the NIFTY 500 moved +274% — behind the index over the full window. Recent form: on a trailing-13-week view the stock has been ahead for 19 straight weeks — the ribbon below is that same metric, week by week.

What would end the trend, mechanically: two Friday closes in a row below the 200-day line. That is the exit rule — no debates.

→ The trend is one thing; the bill is another. Are you paying up for it? Next: the P/E sits at the 65th percentile of its own range.

Valuation P/E is the price of ₹1 of annual profit: how many rupees the market pays for each rupee the company earns in a year.

Hindustan Construction Company Ltd trades at 40.8× P/E, mid-range by its own standards (65th percentile). Its long-run median P/E is 8.8×, measured across 7.0 years of weekly readings. This places the multiple against the stock’s own record, and says nothing about what the business is worth.

Today's P/E of 40.8× is mid-range by its own standards (65th percentile), against a long-run median of 8.8× measured over 7.0 years of weekly readings. This is a comparison against the stock's own history — not a claim about what it is worth.

Why the multiple sits where it does: over the past year annual EPS moved +46.5% against a −6.3% price move — earnings outran the price, pushing the multiple DOWN its own range.

The price move, decomposed: over 5y, of the +16.2%/yr price move, ~+67.0%/yr came from earnings growth and ~−50.8 pp from the multiple (compressing). The split is the honest approximate (price return minus earnings growth); it makes the rally itself visible instead of hiding it behind the percentile.

Put together: the multiple is full against its own past, so the story rests on the earnings line underneath it, not the multiple.

→ Cheap or dear rides on the earnings. Are they actually growing? Next: the fundamental stage — where the business sits in its arc, and how growth has compounded.

Stage: Turning around Every business sits somewhere on a fundamental arc, and this page names the spot before anything else. The last twelve quarters of revenue, profit and EPS growth — plus the return the business earns on its capital — are read as curves: Deteriorating (the curves are falling), Turning around (a trough has just formed and the last few quarters lift off it), Improving (the climb off the trough is sustained), Consistent (steadily positive with healthy returns), Topping out (still high but decelerating from the peak). When the curves genuinely disagree the read is Mixed; too little history is No read. CAGR (compound annual growth rate) is the smooth yearly pace that turns the starting value into the latest one — the fairest way to compare growth across different time spans. Read the columns together: if the 1-year number towers over the 10-year, recent growth is running hotter than the long-run trend. A dash means that window is not held, or the base year was a loss (where a growth rate is not meaningful).

Hindustan Construction Company Ltd reads as turning around on its fundamental arc. Turning around — profit growth swung from −69.4% at the trough to +46.9%, a 3-quarter improving streak, ROCE slipping at 19.1%. The read is built from 12 quarters across 4 curves, on full evidence.

Why it matters: growth inflections are where re-ratings start — the curves say a turn is forming, so the question becomes whether the next quarters confirm it.

→ The stage names the trajectory. Next: the revenue line that produces it, quarter by quarter.

4-Factor Sector Score

49.4/100 — rank 7 of 17 in Infra - Construction & Contracting · 87% evidence confidence

Hindustan Construction Company Ltd scores 49.4 out of 100 against the 17 companies it is compared with in Infra - Construction & Contracting, ranking 7. Balanced evidence: keep at normal research priority and require another comparable period before raising conviction.

The four contributions add to the total exactly: 10.3 + 18.1 + 10.8 + 10.2 = 49.4. This is the SAME number shown on the sector comparison — it is computed once, for the whole peer set, and read here.

What would change it: The read weakens if profit growth turns negative or margin improvement reverses while sector-relative strength deteriorates.

Revenue Revenue is the top line: everything the company billed its customers in the period.

Hindustan Construction Company Ltd reported ₹992 Cr of revenue in the Mar 26 quarter, −27.8% year on year. Over 10 years it has compounded at −7.4% a year. The last full year, FY26, came in at ₹3,970 Cr. The last four reported quarters add to ₹3,969 Cr.

Hindustan Construction Company Ltd reported ₹992 Cr of revenue in the Mar 26 quarter, −27.8% year on year. Over 10 years it has compounded at −7.4% a year. The last full year, FY26, came in at ₹3,970 Cr. The last four reported quarters add to ₹3,969 Cr.

FY26 revenue came in at ₹3,970 Cr (−29.1% on the year), capping 10 years at −7.4% compound. The latest quarter (Mar 26) printed ₹992 Cr, −27.8% year on year.

Pace check: the last four quarters averaged −26.9% growth against the decade's −7.4% — the current year is running slower than its own long-run rate.

Acceleration check: trailing-twelve-month revenue grew −29.2% over the last 4 quarters against −24.7%/yr over the last 8 — rolling over; TTM profit +46.9% vs −41.1%/yr — accelerating.

→ Revenue slipped — did margins hold as it scaled? Next: 17.0% this quarter (−4.0 pp YoY).

Operating margin Operating margin is what is left of every ₹100 of sales after running the business, before interest and tax. It is the cleanest read on pricing power and cost control.

Hindustan Construction Company Ltd's operating margin is 17.0% in the Mar 26 quarter, −4.0 percentage points against the same quarter a year ago. That is the widest this company has ever printed on a full-year basis. Across 13 fiscal years the operating margin has ranged 5.0% to 14.0%. The current quarter is running above every full year in that window.

Hindustan Construction Company Ltd's operating margin is 17.0% in the Mar 26 quarter, −4.0 percentage points against the same quarter a year ago. That is the widest this company has ever printed on a full-year basis. Across 13 fiscal years the operating margin has ranged 5.0% to 14.0%. The current quarter is running above every full year in that window.

The latest quarter's operating margin is 17.0%, −4.0 pp against the same quarter a year ago. Across 13 fiscal years the operating margin has ranged 5.0%–14.0%, and FY26's 14.0% is the top of that band — a record year.

🚨 Why the margin moved: operating margin went −3.8 pp year on year while gross margin went −5.8 pp — the loss came mostly from the gross line: input costs and pricing.

Worth repeating from the valuation section: cheap against its own history on record margins is not the same thing as cheap — a record margin flatters every ratio built on top of it.

→ Margins slipped — did that reach the bottom line? Next: profit −34.4% in the latest quarter.

Net profit Net profit is what survives every cost, interest and tax — the number EPS, dividends and book value all grow from.

Hindustan Construction Company Ltd earned ₹59.0 Cr of net profit in the Mar 26 quarter, −34.4% year on year. Full-year FY26 profit was ₹166 Cr. That is 5.9% of the quarter's revenue. The same quarter a year earlier earned ₹90.0 Cr. 3 of the last 12 reported quarters were loss-making.

Hindustan Construction Company Ltd earned ₹59.0 Cr of net profit in the Mar 26 quarter, −34.4% year on year. Full-year FY26 profit was ₹166 Cr. That is 5.9% of the quarter's revenue. The same quarter a year earlier earned ₹90.0 Cr. 3 of the last 12 reported quarters were loss-making.

Mar 26 profit was ₹59.0 Cr, −34.4% year on year. On the full year, FY26 printed ₹166 Cr (+46.9%).

→ Profit rose — but did the cash follow? Next: 148% of the last 3 years' profit arrived as cash.

Cash flow — the router The P&L says what was earned; the cash-flow statement says what actually arrived. Operating cash flow (CFO) against profit is the cleanest lie detector in the accounts.

Over the last 3 fiscal years 148% of Hindustan Construction Company Ltd's reported profit arrived as operating cash — the cash follows the profit. In FY26 that was ₹892 Cr of operating cash against ₹166 Cr of profit. After ₹44.0 Cr of capital spending, ₹848 Cr was left as free cash.

FY26: operating cash of ₹892 Cr against reported profit of ₹166 Cr, leaving free cash of ₹848 Cr after ₹44.0 Cr of capital spending. Across the last 3 fiscal years the conversion rate is 148% of profit.

Cash-flow readings here are annual — that is the resolution our series carries, so this section moves once a year.

Why conversion sits at 148%: the cash cycle tightened 1,305 days between FY21 and FY26 — cash that used to wait in the cycle now reaches the bank sooner.

Router verdict: no single sink dominates — the next section checks both the working-capital cycle and the capital spending.

→ So follow the cash to where it goes. Next: a −1,106-day cycle and ₹−61.0 Cr of building.

Where the cash goes Working capital is the cash tied up between paying suppliers and getting paid: debtor days (customers owe), inventory days (stock waits), and the cash conversion cycle (the whole loop, in days of sales).

Hindustan Construction Company Ltd's cash conversion cycle runs −1,106 days in FY26, down from 199 days in FY21. Capital spending ran ₹−61.0 Cr over the last 3 years. At FY26 sales of ₹3,970 Cr each day of that cycle holds about ₹10.9 Cr, so roughly ₹−12,030 Cr sits inside the business at any moment.

FY26: debtors at 207 days, inventory at 92 days — roughly 3.0 months of stock waiting to sell; that is where the cash sits while it waits — for a full cycle of −1,106 days, tighter than FY21's 199.

The full loop: cash goes out to suppliers and production on day 0; stock waits 92 days to sell; customers pay about 207 days after that; and suppliers themselves are paid at 1,405 days — netting out to the −1,106-day cycle.

In money terms: at FY26 sales of ₹3,970 Cr, each day of the cycle holds about ₹10.9 Cr — so the −1,106-day loop keeps roughly ₹−12,030 Cr sitting inside the business at any moment.

On the investment side: capital spending of ₹−61.0 Cr over the last 3 fiscal years against ₹296 Cr of depreciation — spending at or below maintenance level. Capital work-in-progress stands at ₹19.0 Cr (FY26) — capacity paid for but not yet earning.

The synthesis: neither the cycle nor the build-out is hoarding the cash — the machine is reasonably clean.

→ Does all this activity actually earn its cost of capital? Next: ROCE is 23% and the ROIC − WACC spread is +5.4 pp.

Return on capital Return on capital employed (ROCE) is the profit the whole business earns on all the money in it — equity and debt together. It is the single best test of whether growth creates value or just size.

Hindustan Construction Company Ltd earns a ROCE of 23% in FY26. That is up from a trough of 6% in FY14. Return on invested capital clears the cost of that capital by +5.4 percentage points, so growth here adds value rather than only size. The wiring behind it is 4.2% net margin on 0.47× asset turns.

FY26 ROCE is 23%, recovered from a FY14 trough of 6% — the full ladder below shows the fall and the climb, undoctored.

Why the return is what it is — the wiring (FY26): 4.2% net margin × 0.47× asset turns × 3.99× balance-sheet leverage ≈ 7.9% on equity. Margin does its share; leverage is a meaningful part of the equation.

The capstone test — ROIC − WACC: 17.4% − 12.0% = a +5.4 pp spread. The 12.0% is a standing assumption for the cost of capital in India, not a per-stock estimate — read the sign and the size of the spread, not the decimals. A spread this wide means every rupee reinvested creates more than a rupee of value — the engine compounds.

→ Returns like these — is the balance sheet borrowing to make them? Next: debt-to-equity is 0.48.

Debt Debt-to-equity says how much of the business is funded by borrowings. Low is the safe corner; the trend matters as much as the level.

Hindustan Construction Company Ltd carries total debt of ₹1,019 Cr against shareholder equity of ₹2,127 Cr as of Mar 26, a debt-to-equity of 0.48. On the annual view that ratio went from −3.06 in FY22 to 0.48 in FY26. Read the returns elsewhere on this page with that leverage in mind.

Mar 26: total debt of ₹1,019 Cr against shareholder equity of ₹2,127 Cr — a debt-to-equity of 0.48. On the annual view, debt-to-equity went from −3.06 (FY22) to 0.48 (FY26). Read the returns on this page with that leverage in mind.

→ Who owns this, and are they adding or leaving? Next: Domestic institutions cut 2.8 points over 8 quarters.

Ownership Who owns the stock, quarter by quarter: promoters (the controlling owners), foreign and domestic institutions, and the public. Steady accumulation by people close to the numbers is a signal; a quiet register is also an answer.

Domestic institutions cut 2.8 points of Hindustan Construction Company Ltd over 8 quarters, the biggest move on the register. That takes domestic institutions to 3.7% of the company. Promoters moved −2.4 points over the same window, to 16.2%. The register is read on the four disclosed classes only; nothing is inferred between filings.

The register over the last two years — Domestic institutions: −2.8 points over 8 quarters to 3.7%; Promoters: −2.4 points over 8 quarters to 16.2%; Foreign institutions: +1.8 points over 8 quarters to 11.4%. Note the structure: promoters hold under 20% — this is a widely-held company where institutions, not a family, set the direction.

Why the register moved: rotation — foreign institutions +1.8 points against domestic institutions −2.8 points over 8 quarters, with promoters −2.4 points — one class of institutions handing the register to the other, not a verdict change by the people closest to the numbers.

→ One last check: does the safety math agree? Next: the balance-sheet safety line.

Safety line The Z-score estimates how far a company sits from balance-sheet distress — above roughly 3 is safe, below roughly 1.8 is the danger zone. It was built for manufacturers, so it is not applied to banks and lenders.

Hindustan Construction Company Ltd: the Z-score reads 0.78. A Z-score above roughly 3 reads as safe and below roughly 1.8 as the distress zone, so this sits inside the distress zone. It is a distance-to-distress estimate from the balance sheet, not a forecast of failure.

🚨 Why it matters: a Z-score of 0.78 is inside the distress zone — the balance sheet is a real risk, not a detail.

The safety line in one sentence: the Z-score reads 0.78.

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