AAA Technologies Limited

Technology — Information Technology Services · NSE

₹113.09−₹0.69 (−0.61%)

DalalBaazaar Score

47 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Moderate

Driven by micro-cap size, which brings thin liquidity, a very high earnings multiple, which leaves little margin for disappointment.

In simple words: The business is earning a fairly low return on the money invested in it, but sales are shrinking. Valuation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:07 pm

Caution warranted. Multiple fundamental metrics — flagged in red below — point to either valuation stretch, leverage risk, or weakening profitability. This doesn't mean avoid the stock outright, but it does mean the burden of proof is on the growth story to justify the current price.

Understanding the Business

Company site ↗

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

What does this company do?

AAA Technologies Limited engages in the provision of IT security audit, cyber security audit, IT assurance and compliance, and IT governance services in India.

IndustryInformation Technology Services

SectorTechnology

Employees107

Annual revenue₹20 Cr

How does it make money?

Turns over ₹20 Cr a year. Of every ₹100 of sales, about ₹10 reaches shareholders as profit, with ₹8 left at the operating level before interest, tax and depreciation. Each of its 107 employees supports ₹19.0 lakh of revenue a year, the signature of a people-led business.

EBITDA margin8.2%

Net margin10.1%

Revenue / employee₹19.0 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.

TATA CONSULTANCY SERV LTP/E 17.3x · ROE 45.6%

INFOSYS LIMITEDP/E 15.8x · ROE 32.0%

HCL TECHNOLOGIES LTDP/E 20.4x · ROE 24.6%

WIPRO LTDP/E 14.5x · ROE 15.9%

What is its competitive advantage?Little sign of one

Returns on capital of 4.4% 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.

ROCE4.4%

ROE6.7%

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 -11% while net margin moved -19% 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-11%

Margin effect-19%

DalalBaazaar Score

47/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 4.0% a year
✗ Profit has declined at 10.4% a year
✗ Latest-year revenue growth of -11.4% is below the longer-term trend — momentum is fading

Quality vs. Valuation

Company Quality

48/ 100

Average

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

Valuation

25/ 100

Expensive

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

68.1x

3Y Median

36.7x

40 monthly readings · mean 40.5x · range 25.4x–70.2x

Sector Median

16.5x

median of 4 sector peers

⚠️Current valuation is approximately 86% above its 3y median of 36.7x. 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 312% above the peer median of 16.5x.

vs. its own history

Expensive

36.7x median over 40 months · +86%

vs. sector peers

Expensive

16.5x median of 4 peers · +312%

vs. generic bands

Expensive

Above 35x

P/E (Trailing)

68.1x

P/B

4.73x

EV/EBITDA

84.5x

PEG

10.81

Dividend Yield

0.88%

What's Good / What's Bad

🟢 What's Going Well1

Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention4

Margins are compressing
EBITDA margin has slipped from 17.8% to 8.2% over 3 years.
Return on equity is falling
ROE has dropped from 11.3% to 6.7% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 15.1% to 4.4% — often a sign of competition or overexpansion.
Valuation above its historical average
At 68.1x the stock trades 86% above its own median of 36.7x.

Red Flags

2 items require attention · 1 high · 1 watch

🔴Significant margin compressionFinancial
EBITDA margin has fallen 9.6 points, from 17.8% to 8.2%.
🟡Profit is decliningFinancial
Net profit is down 28% over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 17.8% to 8.2%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The price already assumes success
The stock trades 86% 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.
Returns on shareholder capital are falling
ROE has dropped from 11.3% to 6.7%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
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 6%✓ 8.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✓ ₹3 Cr
Profit that never becomes cash eventually stops being profit.
3ROCE stays above 8%✗ 4.4%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
4Valuation vs its own median of 36.7x✗ 68.1x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

6 / 10 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✓ 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

2 good · 5 neutral · 4 weak

Market Cap

₹145 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

68.1x

Expensive

Expensive — verify against sector peers

P/B Ratio

4.73x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹1.66

Profitable

Profitable on a per-share basis

ROE

6.7%

Weak

Weak capital efficiency

ROCE

4.4%

Weak

Low return on total capital employed

Debt/Equity

Not available

No data

Source didn't return this field

Revenue Growth (YoY)

-11.4%

Shrinking

Sales are contracting

Profit Growth (YoY)

6.3%

Modest

Slow profit growth

Dividend Yield

0.88%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹3 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹113.09

Operating Margin

17.9%

Good

Healthy core-business profitability

Net Margin

10.6%

Good

Strong bottom-line conversion

Current Ratio

18.86

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.37

Defensive

Steadier than the market

52W Range Position

67%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

100.8 / 96.1

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

62.6

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹23 Cr	₹24 Cr	₹25 Cr	₹20 Cr	-4.0%
EBITDA	₹4 Cr	₹5 Cr	₹4 Cr	₹2 Cr	-25.9%
EBITDA Margin	17.8%	21.7%	14.2%	8.2%	—
PAT (Net Profit)	₹3 Cr	₹3 Cr	₹4 Cr	₹2 Cr	-10.4%
EPS	₹2.24	₹2.5	₹2.74	₹1.61	-10.4%
ROE	11.3%	11.5%	11.4%	6.7%	—
ROCE	15.1%	15.4%	10.2%	4.4%	—
Free Cash Flow	₹4 Cr	₹7 Cr	₹1 Cr	₹3 Cr	-9.2%

🔴 Revenue has shrunk at 4.0% a year over 3 years.

🔴 EBITDA has shrunk at 25.9% a year over 3 years.

🔴 EBITDA Margin has fallen from 17.8% to 8.2% over 3 years (-9.6 pts).

🔴 PAT (Net Profit) has shrunk at 10.4% a year over 3 years.

🔴 EPS has shrunk at 10.4% a year over 3 years.

🔴 ROE has fallen from 11.3% to 6.7% over 3 years (-4.6 pts).

🔴 ROCE has fallen from 15.1% to 4.4% over 3 years (-10.7 pts).

🔴 Free Cash Flow has shrunk at 9.2% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹33 Cr

Total Liabilities

₹2 Cr

Total Debt

—

Cash & Equivalents

₹4 Cr

Operating Cash Flow

₹3 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

73.0%

Corporate Actions

Dividend Rate

₹1

Ex-Dividend Date

23 Sept 2026

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

3 mixed3 general

AAA Technologies Share Price Rise Streak After 12.01% Move

Univest, 06 OctPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

AAA Technologies Share Price rises 9.96%: valuation view

Univest, 05 OctPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

AAA Technologies: M7 Global Fund દ્વારા મોટા પાયે વેચવાલી, 7.65 લાખ શેર બજારમાં ઠાલવ્યા

Whalesbook, 08 Oct

AAA Technologies Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 31 Aug

AAA Technologies Share Price Falls on Weak Momentum

Kalkine India, 17 SeptPrice 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.

NOVA Global buys 3.12% stake in AAA Technologies via open market

scanx.trade, 29 Sept

Watch Items

Revenue growth is negative (-11.4%) on the latest reported period — check if this is one-off or a trend.
Cross-check against the company's latest quarterly filing / investor presentation before acting.
1 metric couldn't be retrieved for this stock — this is more common for smaller or thinly-covered listings.

DalalBaazaar Thesis

🔴Business QualityWeak7.5/20

🟢Financial HealthStrong17.3/20

🔴GrowthWeak4.1/20

🟡ProfitabilityModerate6.9/15

🔴ValuationDemanding4.9/15

🟡RiskModerate6.2/10

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.

This thesis breaks if

✓EBITDA margin holds above 6%8.2%
✓Free cash flow remains positive₹3 Cr
✗ROCE stays above 8%4.4%
✗Valuation vs its own median of 36.7x68.1x today