Two interesting counters.
~Sumon Mukhopadhyay
Research Report on SEPC Ltd.
Introduction:
SEPC Ltd. (formerly Shriram EPC Ltd, Rs.11.32), listed on the NSE and BSE, is a well-known Indian infrastructure and engineering company. Established in 2000, SEPC offers turnkey solutions for large-scale projects, including industrial, commercial, and residential developments.
Its core expertise lies in project engineering, procurement, construction (EPC), and project management services across sectors such as water treatment and transmission, renewable energy, thermal power, cement, aluminum, copper, material handling, and cooling towers.
With a market capitalization of about ₹2,202.08 Cr (as of August 28, 2025), SEPC is categorized as a small-cap stock. Its operations are strengthened by strategic joint ventures and a growing focus on renewable energy and infrastructure development.
Stock Overview:
As of August 28, 2025, SEPC Ltd.’s share price was ₹11.35, down 15.3% in the last six months and 53.86% over the past year. The stock’s 52-week range was ₹10.91 (low) to ₹31.58 (high).
With a Price-to-Earnings (PE) ratio of 39.83 and a Price-to-Book (PB) ratio of 0.83, the stock trades at a relatively low valuation compared to its book value.
Financial Performance:
Q4FY25 (Quarter Ended March 31, 2025):
Revenue: Standalone net sales were ₹117.80 Cr, down 20.31% YoY from ₹147.80 Cr. Consolidated total income stood at ₹161.77 Cr.
Net Profit: Consolidated net profit was ₹10.02 Cr, a sharp turnaround from previous years’ losses. PBT was ₹6.67 Cr.
EPS: ₹3.05 for the quarter, reflecting a high figure likely due to share count adjustments or dividends.
Expenses: Total expenses were ₹155.11 Cr. Interest costs formed 7.49% of operating revenue, while employee expenses were 5.47%.
Observation: Despite lower revenue, SEPC turned profitable, showing better cost control. The successful ₹350 Cr rights issue (oversubscribed 2.12x) provided funds for debt repayment and working ca
Q1FY26 (Quarter Ended June 30, 2025):
Revenue: ₹203.79 Cr, up 26.0% from Q4FY25 and significantly higher than ₹165.53 Cr in Q1FY25.
Net Profit: PAT was ₹16.55 Cr, up 104.8% YoY and 148.1% QoQ. PBT was ₹19.05 Cr, up 185.6% QoQ.
EPS: ₹0.11, down 96.4% from Q4FY25 but up 83.3% YoY due to increased share capital post-rights issue.
Expenses: Total expenses were ₹184.75 Cr, up 19.1% QoQ.
Observation: Strong revenue and profit growth, aided by lower tax outgo (45.7% YoY decline). Appointment of new KMP and secretarial auditor noted, along with auditor qualifications regarding deferred tax assets and receivables.
Annual Performance (FY25):
Revenue: ₹597.65 Cr, up 6% YoY.
Net Profit: ₹24.84 Cr, up 9% YoY.
ROE: 1.64%, down slightly from 1.88% in FY24.
Debt-to-Equity: Improved to 0.24 from 0.37, reflecting stronger balance sheet.
BVPS: ₹9.63 (up from ₹8.60).
Latest Developments:
Rights Issue (June 2025): Raised ₹350 Cr through oversubscribed rights issue (2.12x) to reduce debt and fund operations.
Solar EPC Contract: Won ₹650 Cr project under PM-KUSUM scheme for 133 MW solar plant in Maharashtra. Stock saw short-term decline due to profit booking.
Order Book: Secured contracts worth over ₹1,043 Cr, improving future revenue visibility.
Joint Ventures: Includes partnerships with Leitner B.V. (wind turbines) and Hamon Shriram Cottrell Inc. (air pollution control), bolstering renewable focus.
Market Sentiment: Currently bearish; trading below key moving averages. Some analysts expect a breakout, with speculative long-term targets between ₹35–₹50.
Shareholding Pattern:
Promoters: Down from 33.37% (Mar 2025) to 27.35% (Jun 2025). 33.95% of promoter shares remain pledged.
FII: 0.65% (slight increase from 0.64%).
DII: 0.01% (unchanged).
Retail/Public: Majority holding, indicating limited institutional participation.
Other Key Details:
Market Cap: ₹2,202.08 Cr (Aug 2025).
Peers: Competes with L&T, RVNL, NBCC, IRB Infra, KEC International. SEPC’s 3-year return is 55.93%, far lower than RVNL’s 1116.8%, but its 5-year return of 511.59% stands out.
Dividend History: Last dividend was in 2012 (₹1.2 per share).
Technical View: Below key moving averages; RS rating 8 (poor), EPS rank 35. Support at ₹12–₹22, resistance at ₹31–₹42.
Risks: Revenue volatility, sharp share price drop, high PE, auditor concerns, and low institutional interest remain key red flags.
Conclusion:
SEPC Ltd. has made strides in expanding its renewable energy portfolio, improving financial performance, and reducing debt. The successful Rs.650 crore solar contract and oversubscribed Rights Issue are notable achievements, alongside international expansion in Saudi Arabia and the UAE.
SEPC Ltd shows a clear turnaround story, with improved profitability, stronger balance sheet, and a robust order pipeline. However, the steep price decline, pledged promoter shares, and limited institutional interest pose risks.
Investors should watch execution progress and margin stability before considering fresh entry. This remains a high-risk, potentially high-reward small-cap play for long-term investors with a strong risk appetite.
TRF Ltd – A Legacy of Engineering Excellence and Resurgence
TRF Limited (Rs.311.40), established in November 1962 in Jamshedpur, is a Tata-promoted engineering powerhouse originally conceived through the collaboration of Tata Steel and ACC Limited .
Specialization and Capabilities:
TRF has earned its reputation as a trusted provider of turnkey electromechanical solutions, industrial structures and fabrication, and comprehensive life-cycle services. Its core strength lies in handling bulk material handling equipment – including wagon tipplers, stacker-reclaimers, traveling wagon loaders, crushers, and screens – tailored for industries like steel, power, cement, ports, mining, and more .
Facilities and Innovation:
The company’s facility in Jamshedpur spans over 22 acres, featuring six covered manufacturing bays (about 21,250 m²) and an advanced in-house design and engineering team. Utilizing state-of-the-art tools and methodologies, TRF continually enhances its product efficiency, reliability, and productivity .
A Trusted Partner Across Key Industries:
Over the years, TRF has delivered value-added systems and services to esteemed clients such as Tata Steel, Tata Power, NTPC, SAIL, NMDC, BHEL, and Krishnapatnam Port. Its commitment to delivering quality and minimizing cost of ownership has been unwavering .
Strategic Turnaround and Support:
In early 2024, Tata Steel decided not to proceed with a planned merger with TRF, citing a remarkable turnaround in TRF’s performance. This turnaround was supported by operational and financial backing from Tata Steel, including order placements and capital infusion. The result? A revitalized TRF, proudly standing strong as an associate, capable of navigating challenging times with resilience.
Why TRF Is Insulated from US Tariffs:
🔹Minimal export exposure—TRF’s client base is heavily domestic, centered around Indian industrial and infrastructure projects.
🔹Tata Group support provides strategic stability and offsets external market pressures.
🔹Domestic infrastructure momentum sustains demand for TRF’s services regardless of global trade shifts.
Corporate Ethos and Culture:
With nearly six decades of experience, TRF is guided by the core Tata values — agility, passion, and integrity. Its vision is to lead internationally in material handling equipment and services by continuously upgrading skills, engineering processes, manufacturing practices, and project management techniques.
Key Highlights & Considerations:
🔹Tata Group affiliation brings strategic clout and client access.
🔹Strong alignment with domestic capex and core infrastructure sectors.
🔹Promoter holding remains robust at ~34%. Limited promoter pledging
In summary, TRF Ltd. stands out as a bedrock of engineering excellence in India's industrial landscape. With a rich heritage, robust infrastructure, deep technical expertise, and meaningful recovery trajectories, it remains an inspiring example of how a company can thrive through innovation, strategic support, and unwavering commitment to core values.
For savvy investors, TRF may offer selective value if domestic infrastructure rebounds, but it remains a high-risk small-cap, requiring careful monitoring of project flow and execution trends.
Disclaimer: This report is for informational purposes only and not investment advice. Investors must conduct their own due diligence and consult financial advisors before making decisions.
.jpeg)
Comments