3i Infotech Limited

Technology — Information Technology Services · NSE

₹22.30−₹0.17 (−0.76%)

DalalBaazaar Score

56 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Moderate

Driven by negative free cash flow, micro-cap size, which brings thin liquidity, falling profits.

In simple words: Reasonable but unspectacular business quality, though profits are falling even as sales grow. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:49 pm

Understanding the Business

Company site ↗

The 60-second version of 3i Infotech Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

3i Infotech Limited provides information technology services and solutions in India and internationally. It operates through the Application, Automation, Analytics (AAA); Infrastructure services (IS); Business process services (BPS); and Other segments.

IndustryInformation Technology Services

SectorTechnology

Employees3,153

Annual revenue₹693 Cr

How does it make money?

Turns over ₹693 Cr a year. Of every ₹100 of sales, about ₹5 reaches shareholders as profit, with ₹11 left at the operating level before interest, tax and depreciation. Each of its 3,153 employees supports ₹22.0 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹22.0 lakh

Who are its competitors?

The closest listed comparisons in its industry are TATA CONSULTANCY SERV LT, INFOSYS LIMITED, HCL TECHNOLOGIES LTD, WIPRO LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 11.6% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE32.0%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -5% while net margin moved +2622% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect-5%

Margin effect+2622%

DalalBaazaar Score

56/ 100

Moderate

Weighted across six categories. Every point is explained below.

✓ Beta of -0.28 — historically steadier than the index
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

56/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

72/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

12.5x

3Y Median

0.9x

40 monthly readings · mean 5.6x · range 0.4x–17.1x

Sector Median

16.5x

median of 4 sector peers

⚠️Current valuation is approximately 1234% above its 3y median of 0.9x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

🟢Against its sector it trades 24% below the peer median of 16.5x.

vs. its own history

Expensive

0.9x median over 40 months · +1234%

vs. sector peers

Cheap

16.5x median of 4 peers · -24%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

6.8x

PEG

0.06

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 6.2% to 10.7% over 3 years.
Debt is being paid down
Total debt is down 38% over 3 years.
Return on equity is rising
ROE has improved from 0.2% to 9.3%.
Return on capital is rising
ROCE has improved from 1.8% to 11.6%.
Very low debt
Debt/Equity of 0.16x leaves the balance sheet with plenty of headroom.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

2 items require attention · 1 high · 1 watch

🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹45 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 6.2% to 10.7%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Deleveraging frees up earnings
Debt is down 38% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Cheaper than its peers
It trades 24% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.

🔴 Bear CaseWhat could go wrong?

The price already assumes success
The stock trades 1234% above its own median multiple. At this level the business has to deliver just to stand still, and a stumble is repriced twice — lower earnings on a lower multiple.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 9%✓ 10.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹45 Cr
Profit that never becomes cash eventually stops being profit.
3Debt / EBITDA stays below 2x✓ 0.8x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4ROCE stays above 9%✓ 11.6%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Valuation vs its own median of 0.9x✗ 12.5x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

5 / 11 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✗ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

4 good · 5 neutral · 2 weak

Market Cap

₹463 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

12.5x

Cheap

Cheap against the generic band

P/B Ratio

1.25x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹1.78

Profitable

Profitable on a per-share basis

ROE

9.3%

Moderate

Moderate capital efficiency

ROCE

11.6%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.16x

Low

Conservative leverage

Revenue Growth (YoY)

4.3%

Modest

Modest growth

Profit Growth (YoY)

-29.5%

Falling

Profits are shrinking

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹45 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

0.3%

Weak

Thin margins leave little room for error

Net Margin

4.9%

Average

Average bottom-line conversion

Current Ratio

1.13

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

-0.28

Defensive

Steadier than the market

52W Range Position

64%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

23.6 / 23.9

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

26.5

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹729 Cr	₹814 Cr	₹726 Cr	₹693 Cr	-1.7%
EBITDA	₹45 Cr	-₹239 Cr	₹40 Cr	₹74 Cr	+18.0%
EBITDA Margin	6.2%	-29.4%	5.6%	10.7%	—
PAT (Net Profit)	₹1 Cr	-₹314 Cr	₹25 Cr	₹35 Cr	+195.8%
EPS	₹49.5	₹-17.61	₹1.35	₹1.82	-66.7%
ROE	0.2%	-106.9%	8.3%	9.3%	—
ROCE	1.8%	-84.0%	5.3%	11.6%	—
Total Debt	₹99 Cr	₹84 Cr	₹64 Cr	₹62 Cr	-14.7%
Free Cash Flow	₹36 Cr	₹11 Cr	₹29 Cr	-₹45 Cr	—

🟡 Revenue has been broadly flat over 3 years (-1.7% a year).

🟢 EBITDA has grown at 18.0% a year over 3 years.

🟢 EBITDA Margin has risen from 6.2% to 10.7% over 3 years (+4.5 pts).

🟢 PAT (Net Profit) has grown at 195.8% a year over 3 years.

🔴 EPS has shrunk at 66.7% a year over 3 years.

🟢 ROE has risen from 0.2% to 9.3% over 3 years (+9.1 pts).

🟢 ROCE has risen from 1.8% to 11.6% over 3 years (+9.9 pts).

🟢 Total Debt has shrunk at 14.7% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹36 Cr to -₹45 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹662 Cr

Total Liabilities

₹284 Cr

Cash & Equivalents

₹20 Cr

Operating Cash Flow

-₹44 Cr

Capex

-₹1 Cr

Shareholding (proxy)

Institutional Holding

0.2%

Insider Holding

14.3%

Corporate Actions

Ex-Dividend Date

07 Jul 2011

Peer Comparison

Company	P/E	ROE
TATA CONSULTANCY SERV LT	17.3x	45.6%
INFOSYS LIMITED	15.8x	32.0%
HCL TECHNOLOGIES LTD	20.4x	24.6%
WIPRO LTD	14.5x	15.9%

Recent News

2 mixed4 general

3i Infotech AGM addendum adds director removal proposal

scanx.trade, 18 Oct

3I Infotech Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 31 Aug

There May Be Underlying Issues With The Quality Of 3i Infotech's (NSE:3IINFOLTD) Earnings

Simply Wall Street, 22 MayResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Stocks To Watch Today, July 8, 2026: ideaForge, 3i Infotech, Capital SFB, Adani Enterprises & Uno Minda

HDFC Sky, 08 Jul

Capital NxT LLP and PAC reach 5.02% stake in 3i Infotech

scanx.trade, 21 Jul

Why Is 3i Infotech Share Price Falling: Key Reasons and Investor Analysis 2026

Univest, 07 MayPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

StrongFinancial Health · Valuation

MiddlingBusiness Quality · Growth · Profitability

WeakRisk

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 1 high-severity red flag sits above this conclusion and should be read first.

2 of 5 tripwires tripped — Free cash flow remains positive; Valuation vs its own median of 0.9x · see Key things to watch ↑