InCred Equities has initiated coverage on SRM Contractors with a BUY rating, projecting a 50% upside potential over an 18-month horizon. The brokerage pegs a target price of INR 854, against the current market price (CMP) of INR 570, citing the company’s robust order book, strong execution track record, and strategic positioning in India’s hilly terrain infrastructure segment.
From Jammu’s Valleys to Himalayan Heights
Founded in 2008, SRM Contractors has evolved from a regional road and bridge builder in Jammu & Kashmir to a specialized infrastructure player with expertise spanning tunnels, slope stabilization, and geotechnical engineering. The company employs over 300 professionals, including terrain-specialized engineers and site experts.
Its order book, as of August 2025, stands at approximately INR 1,476 crore, with marquee clients such as NHAI, BRO, NHIDCL, and various state governments. Around 60% of orders are road and bridge projects, while 29% involve slope stabilization and 11% are tunnel contracts.
InCred Coverage on SRM Contractors: Strong Growth, Solid Margins
SRM has demonstrated remarkable growth momentum. Over the last five years, its revenue and EBIT have grown at 35% and 65% CAGR, respectively. The company closed Q1FY26 with a 2.5x YoY revenue increase to INR 142 crore, and EBIT more than doubled to INR 19 crore, delivering margins of 13.6%.
In its FY25 results, SRM reported:
- Revenue: INR 528.1 crore (up 54% YoY)
- EBIT: INR 67.9 crore (EBIT margin 13%)
- PAT: INR 55 crore (PAT margin 10%)
- EPS: INR 23.97
Debt levels have reduced significantly post-listing, with the gross debt-equity ratio improving from 0.74x in FY23 to 0.09x in FY25. Rating agency CARE Edge upgraded the company’s long-term facilities from CARE BBB+ to CARE A- in July 2025.
New Contract Win Strengthens Order Pipeline
On 30 October 2025, SRM Contractors announced securing a contract worth INR 155.02 crore from the Maharashtra State Infrastructure Development Corporation (MSIDC). The EPC project involves the improvement of the Borande–Uprale–Kasa–Saiwan–Udhava–Talasari–Sanjan Road (SH-73) in Palghar district.
Strategic Expansion and Acquisition
SRM recently acquired a 51% stake in Maccaferri Infrastructure (MIPL) — an Indian subsidiary of the Italian geotechnical major Officine Maccaferri — expanding its presence in slope stabilization, soil retention, and environmental engineering.
MIPL’s INR 211 crore order book is expected to strengthen SRM’s financial position and diversify its business portfolio.
This acquisition also enables SRM to tap into advanced geosynthetics and tunneling systems, supporting its long-term plan to expand into hydroelectric, mining, and ropeway projects.
Sectoral Tailwinds and Regional Focus
Government infrastructure push remains a key tailwind. In June 2025, the Ministry of Road Transport and Highways approved 19 major projects worth INR 10,637 crore for Jammu & Kashmir, including the Peer-Ki-Gali and Sadhana tunnels, both pivotal for all-weather connectivity.
Similarly, projects worth INR 931 crore in Ladakh and INR 454 crore in Uttarakhand under the Central Road Infrastructure Fund (CRIF) reinforce the opportunity landscape for terrain-specialized contractors like SRM.
SRM Contractors Post-IPO Performance: A Multibagger in the Making
SRM Contractors was listed on 3 April 2024, following an IPO that opened from 26–28 March 2024. The INR 130.20 crore issue was 86.44x subscribed, reflecting overwhelming investor demand. The stock was allotted at INR 210 and debuted at INR 226, marking a 7.62% listing gain.
As of 31 October 2025, SRM trades at INR 574, translating to a 173% gain from its allotment price — reinforcing its image as a multibagger post-IPO success story. The stock also hit its 52-week high of INR 574 on the same day.
Valuation and Outlook
InCred Equities projects SRM’s EBIT to grow at a 41% CAGR over FY25–FY28, valuing it at 12x FY28F P/E, implying an exit market cap of INR 2,000 crore. The brokerage emphasizes SRM’s steady 13%+ margins, robust order visibility, and strategic positioning in high-entry-barrier terrains.
Key Forecasts (FY26–FY28):
| Metric | FY26E | FY27E | FY28E |
|---|---|---|---|
| EBIT (INR Cr) | 150 | 187 | 228 |
| PAT (INR Cr) | 105 | 133 | 163 |
| PAT Margin | 10% | 10% | 10% |
| EPS (INR) | 46 | 58 | 71 |
The Road Ahead
With strong project execution, prudent financial management, and expanding technical capabilities, SRM Contractors is poised to become a pan-India terrain infrastructure leader. Its disciplined approach — focusing on clustering projects geographically, backward integration, and in-house engineering — ensures operational efficiency and sustainable margins.
From constructing India’s highest reinforced soil wall for the USBRL project in Reasi to completing the nation’s longest precast cut-and-cover tunnel in Leh, SRM Contractors continues to live up to its moniker: “Building the Backbone of India’s Toughest Terrains.”
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