PRAENG - Prajay Engineers

📊 NSE: PRAENG 🏢 Construction 📅 Last Updated: 12/14/2025 11:11

💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue for H1 FY26 was INR 28.45 Cr, a decline of 11.2% from INR 32.04 Cr in H1 FY25. Construction and Development revenue fell 30.7% to INR 17.93 Cr, while Hospitality (Hotels and Resorts) grew 18.2% to INR 5.34 Cr. Unallocated Corporate Revenue increased 212% to INR 5.18 Cr.

Geographic Revenue Split

The company is primarily based in Hyderabad, Telangana, which serves as its central hub for construction projects and hospitality operations. Specific regional % splits are not disclosed in available documents.

Profitability Margins

Net profit margin for FY25 improved to (50.18%) from (126.28%) in FY24. However, the company remains loss-making, with a consolidated net loss of INR 9.67 Cr for H1 FY26 compared to a loss of INR 11.58 Cr in H1 FY25.

EBITDA Margin

Standalone EBITDA improved by INR 14.87 Cr YoY to INR (22.22) Cr in FY25. Core profitability remains under pressure due to high operational costs in the construction segment, which recorded a loss of INR 10.94 Cr in H1 FY26.

Capital Expenditure

Capital expenditure for H1 FY26 included the purchase of property, plant, and equipment (PPE) totaling INR 7.26 Cr on a standalone basis.

Credit Rating & Borrowing

The company maintains a debt-equity ratio of 0.23 as of FY25. Finance charges for H1 FY26 were INR 0.22 Cr on total consolidated borrowings of INR 163.98 Cr.

⚙️ Operational Drivers

Raw Materials

Primary raw materials include steel, cement, and bricks for construction projects, and food/beverage supplies for the hospitality segment. Specific % of total cost for each is not disclosed.

Capacity Expansion

The company holds segment assets of INR 600.43 Cr in Construction and INR 133.65 Cr in Hospitality as of September 30, 2025. Specific unit-based capacity expansion plans are not disclosed.

Raw Material Costs

Raw material costs are a significant portion of the Construction segment's expenses; however, specific YoY cost changes and procurement strategies are not detailed beyond general inventory management.

📈 Strategic Growth

Growth Strategy

The company is shifting its strategy toward joint development and development management agreements for its land parcels rather than outright sales. This allows for shared risk and leveraging external expertise to complete residential and commercial projects.

Products & Services

Final products include residential apartments, commercial office spaces, hotel rooms, and resort services.

Brand Portfolio

Prajay Engineers Syndicate Limited.

Market Expansion

The company is focused on the Indian real estate sector, which it believes will emerge stronger with adequate regulatory support.

Strategic Alliances

The company utilizes joint operations and associates for development projects, though specific partner names for new JVs were not listed in the provided text.

🌍 External Factors

Industry Trends

The Indian real estate sector is showing growth compared to the previous year, with a trend toward healthier, long-term sustained growth supported by policy and regulatory frameworks.

Competitive Landscape

Competes with other regional and national real estate developers and hospitality chains in the Telangana region.

Competitive Moat

The company's moat is built on its significant land bank and established brand presence in the Hyderabad region, though sustainability is challenged by high debt and consistent losses.

Macro Economic Sensitivity

Highly sensitive to Indian GDP growth and interest rate cycles, which dictate demand for residential housing and corporate travel for the hospitality segment.

Consumer Behavior

Shift in consumer demand toward branded developers and integrated townships, influencing the company's project planning.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to RERA (Real Estate Regulatory Authority) norms, local building codes, and pollution control standards for construction sites.

Taxation Policy Impact

The company recorded a deferred tax expense of INR 0.59 Cr for H1 FY26. Total deferred tax liabilities stand at INR 17.31 Cr.

⚠️ Risk Analysis

Key Uncertainties

Key risks include fluctuations in earnings, time and cost overruns on construction contracts, and changes in government policies regarding land development.

Geographic Concentration Risk

High geographic concentration in Hyderabad, Telangana, making the company vulnerable to local economic downturns or regulatory changes in that specific state.