Aartech Solonics Limited

Industrials — Electrical Equipment & Parts · NSE

₹47.25+₹1.39 (+3.03%)

DalalBaazaar Score

70 / 100

🟢 Good

Verdict

REASONABLE

Risk

Moderate

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

In simple words: Strong business and financial position, with both sales and profits growing well. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:58 pm

Understanding the Business

Company site ↗

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

What does this company do?

Aartech Solonics Limited operates as a system solution oriented research and development enterprise in the field of specialized and selected energy appliances in India and internationally.

IndustryElectrical Equipment & Parts

SectorIndustrials

Employees76

Annual revenue₹41 Cr

How does it make money?

Turns over ₹41 Cr a year. Of every ₹100 of sales, about ₹10 reaches shareholders as profit, with ₹16 left at the operating level before interest, tax and depreciation. Each of its 76 employees supports ₹53.8 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹53.8 lakh

Who are its competitors?

The closest listed comparisons in its industry are SIEMENS LTD, ABB INDIA LIMITED, HAVELLS INDIA LIMITED. 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?Some evidence

ROCE of 18.7% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

Peer median ROE17.1%

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +89% while net margin moved +48% 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+89%

Margin effect+48%

DalalBaazaar Score

70/ 100

Good

Weighted across six categories. Every point is explained below.

• Beta of 0.90 — moves roughly with the market
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

76/ 100

Good

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

Valuation

73/ 100

Cheap

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

A good business currently available at an undemanding price — the combination this framework is built to look for.

Historical Valuation

Current P/E

30.7x

3Y Median

115.0x

40 monthly readings · mean 107.8x · range 37.6x–197.5x

Sector Median

88.8x

median of 3 sector peers

🟢Current valuation is approximately 73% below its 3y median of 115.0x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 65% below the peer median of 88.8x.

vs. its own history

Cheap

115.0x median over 40 months · -73%

vs. sector peers

Cheap

88.8x median of 3 peers · -65%

vs. generic bands

Fair

15x–35x

EV/EBITDA

22.6x

PEG

0.75

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 11.9% to 16.5% over 3 years.
Return on equity is rising
ROE has improved from 4.9% to 11.3%.
Return on capital is rising
ROCE has improved from 7.6% to 18.7%.
Very low debt
Debt/Equity of 0.16x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 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

🔴Debt has risen sharplyFinancial
Total debt is up 102% over 3 years, from ₹3 Cr to ₹6 Cr.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹1 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 18.7% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Margin expansion has further to run
EBITDA margin has risen from 11.9% to 16.5%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 73% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Cheaper than its peers
It trades 65% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
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?

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

1Revenue growth stays above 18% a year✓ 23.5% CAGR
Latest reported year was 68.0%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 14%✓ 16.5%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹1 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.8x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 16%✓ 18.7%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

8 / 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

5 good · 5 neutral · 1 weak

Market Cap

₹150 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

30.7x

Fair

Fairly valued against the generic band

P/B Ratio

4.84x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹1.54

Profitable

Profitable on a per-share basis

ROE

11.3%

Moderate

Moderate capital efficiency

ROCE

18.7%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.16x

Low

Conservative leverage

Revenue Growth (YoY)

68.0%

Healthy

Healthy top-line growth

Profit Growth (YoY)

145.0%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.28%

Modest

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

Free Cash Flow

-₹1 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

10.4%

Average

Average margins

Net Margin

10.6%

Good

Strong bottom-line conversion

Current Ratio

2.85

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.90

Market-like

Moves roughly in line with the market

52W Range Position

44%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

48.8 / 49.2

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

37.4

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹22 Cr	₹33 Cr	₹36 Cr	₹41 Cr	+23.5%
EBITDA	₹3 Cr	₹1 Cr	₹6 Cr	₹7 Cr	+37.8%
EBITDA Margin	11.9%	3.0%	17.2%	16.5%	—
PAT (Net Profit)	₹1 Cr	₹1 Cr	₹3 Cr	₹4 Cr	+40.8%
EPS	₹0.45	₹0.41	₹0.87	₹1.25	+40.9%
ROE	4.9%	4.5%	8.8%	11.3%	—
ROCE	7.6%	9.7%	6.7%	18.7%	—
Total Debt	₹3 Cr	₹4 Cr	₹6 Cr	₹6 Cr	+26.4%
Free Cash Flow	-₹5 Cr	₹1 Cr	-₹2 Cr	-₹1 Cr	—

🟢 Revenue has grown at 23.5% a year over 3 years.

🟢 EBITDA has grown at 37.8% a year over 3 years.

🟢 EBITDA Margin has risen from 11.9% to 16.5% over 3 years (+4.6 pts).

🟢 PAT (Net Profit) has grown at 40.8% a year over 3 years.

🟢 EPS has grown at 40.9% a year over 3 years.

🟢 ROE has risen from 4.9% to 11.3% over 3 years (+6.4 pts).

🟢 ROCE has risen from 7.6% to 18.7% over 3 years (+11.1 pts).

🔴 Total Debt has grown at 26.4% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹51 Cr

Total Liabilities

₹16 Cr

Cash & Equivalents

₹3 Cr

Operating Cash Flow

-₹1 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

70.1%

Corporate Actions

Dividend Rate

₹0.13

Ex-Dividend Date

22 Sept 2026

Peer Comparison

Company	P/E	ROE
SIEMENS LTD	88.8x	10.5%
ABB INDIA LIMITED	92.6x	19.1%
HAVELLS INDIA LIMITED	43.5x	17.1%

Recent News

1 positive2 mixed3 general

Is Now The Time To Put Aartech Solonics (NSE:AARTECH) On Your Watchlist?

Simply Wall Street, 07 Jul

Why Is Aartech Solonics Share Price Falling: Key Reasons and Investor Analysis 2026

Univest, 13 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.

Aartech Solonics Q1 Results: Analyst call scheduled for Aug 14

scanx.trade, 10 AugAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Aartech Solonics Stock Prediction 2026: Expert Analysis, Forecast Scenarios and Full Stock Review

Univest, 19 Jun

Aartech Solonics Q1FY26 revenue up 68% to ₹7.28 crore; PBT rises 63%

scanx.trade, 14 AugResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Aartech Solonics vs Nifty 50: Share Price Performance Compared

Univest, 03 Sept

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongBusiness Quality · Financial Health · Growth · Profitability

MiddlingValuation

WeakRisk

Points for each in the Score ↑

Attractive on both counts

A good business currently available at an undemanding price — the combination this framework exists to look for. The work left is qualitative: whether the advantage the numbers imply is one you can identify and expect to last. 1 high-severity red flag sits above this conclusion and should be read first.

1 of 5 tripwires tripped — Free cash flow remains positive · see Key things to watch ↑