Aarvi Encon Limited

Industrials — Staffing & Employment Services · NSE

₹139.36+₹0.36 (+0.26%)

DalalBaazaar Score

60 / 100

🟢 Good

Verdict

NEUTRAL

Risk

Low

Driven by micro-cap size, which brings thin liquidity.

In simple words: Strong business and financial position, with both sales and profits growing well. Thin profit margins are the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:02 pm

Understanding the Business

Company site ↗

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

What does this company do?

Aarvi Encon Limited offers manpower supply and consultancy services in India and internationally.

IndustryStaffing & Employment Services

SectorIndustrials

Employees277

Annual revenue₹644 Cr

How does it make money?

Turns over ₹644 Cr a year. Of every ₹100 of sales, about ₹3 reaches shareholders as profit, with ₹4 left at the operating level before interest, tax and depreciation. Each of its 277 employees supports ₹2.32 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹2.32 Cr

Who are its competitors?

The closest listed comparisons in its industry are LARSEN & TOUBRO LTD., SIEMENS LTD, ABB 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 15.1% 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 ROE15.2%

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 +50% 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+50%

Margin effect-19%

DalalBaazaar Score

60/ 100

Good

Weighted across six categories. Every point is explained below.

• ROE of 12.4% is moderate

Quality vs. Valuation

Company Quality

55/ 100

Average

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

Valuation

76/ 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

10.7x

3Y Median

15.6x

40 monthly readings · mean 16.1x · range 11.6x–23.3x

Sector Median

88.8x

median of 3 sector peers

🟢Current valuation is approximately 31% below its 3y median of 15.6x. 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 88% below the peer median of 88.8x.

vs. its own history

Cheap

15.6x median over 40 months · -31%

vs. sector peers

Cheap

88.8x median of 3 peers · -88%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

9.0x

PEG

1.60

What's Good / What's Bad

🟢 What's Going Well3

Cash generation is improving
Free cash flow is up 23% over 3 years.
Very low debt
Debt/Equity of 0.19x 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

1 item require attention · 1 high

🔴Debt has risen sharplyFinancial
Total debt is up 685% over 3 years, from ₹3 Cr to ₹27 Cr.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 31% 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 88% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹7 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.
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 11% a year✓ 14.4% CAGR
Latest reported year was 14.1%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 2%✓ 3.9%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✓ ₹7 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.1x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 12%✓ 15.1%
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

8 good · 3 neutral · 0 weak

Market Cap

₹207 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

10.7x

Cheap

Cheap against the generic band

P/B Ratio

1.45x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹12.99

Profitable

Profitable on a per-share basis

ROE

12.4%

Moderate

Moderate capital efficiency

ROCE

15.1%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.19x

Low

Conservative leverage

Revenue Growth (YoY)

14.1%

Healthy

Healthy top-line growth

Profit Growth (YoY)

42.8%

Healthy

Profits growing at a healthy clip

Dividend Yield

1.44%

Modest

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

Free Cash Flow

₹7 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

2.3%

Weak

Thin margins leave little room for error

Net Margin

2.9%

Weak

Very little revenue reaches the bottom line

Current Ratio

2.05

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

-0.07

Defensive

Steadier than the market

52W Range Position

45%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

137.9 / 144.0

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

57.4

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹430 Cr	₹400 Cr	₹504 Cr	₹644 Cr	+14.4%
EBITDA	₹20 Cr	₹15 Cr	₹16 Cr	₹25 Cr	+8.6%
EBITDA Margin	4.5%	3.7%	3.1%	3.9%	—
PAT (Net Profit)	₹15 Cr	₹11 Cr	₹10 Cr	₹18 Cr	+6.7%
EPS	₹9.79	₹7.65	₹6.73	₹11.79	+6.4%
ROE	13.4%	9.7%	8.0%	12.4%	—
ROCE	16.0%	11.4%	10.8%	15.1%	—
Total Debt	₹3 Cr	₹10 Cr	₹27 Cr	₹27 Cr	+98.7%
Free Cash Flow	₹6 Cr	₹2 Cr	-₹12 Cr	₹7 Cr	+7.3%

🟢 Revenue has grown at 14.4% a year over 3 years.

🟢 EBITDA has grown at 8.6% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 3.9% over 3 years.

🟢 PAT (Net Profit) has grown at 6.7% a year over 3 years.

🟢 EPS has grown at 6.4% a year over 3 years.

🔴 ROE has fallen from 13.4% to 12.4% over 3 years (-1.0 pts).

🟡 ROCE has held roughly flat at 15.1% over 3 years.

🔴 Total Debt has grown at 98.7% a year over 3 years.

🟢 Free Cash Flow has grown at 7.3% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹237 Cr

Total Liabilities

₹95 Cr

Cash & Equivalents

₹9 Cr

Operating Cash Flow

₹8 Cr

Capex

-₹1 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

78.3%

Corporate Actions

Dividend Rate

₹2

Ex-Dividend Date

07 Aug 2026

Peer Comparison

Company	P/E	ROE
LARSEN & TOUBRO LTD.	30.1x	15.2%
SIEMENS LTD	88.8x	10.5%
ABB INDIA LIMITED	92.6x	19.1%

Recent News

1 positive2 mixed3 general

With EPS Growth And More, Aarvi Encon (NSE:AARVI) Makes An Interesting Case

Simply Wall Street, 27 May

Aarvi Encon Share Price Target 2027 to 2030: Analyst Outlook

Univest, 17 AugAnalyst view

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

Aarvi Encon Wins ₹30.63 Crore MGL Order; Shares Edge Lower

HDFC Sky, 20 AugPrice 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.

Aarvi Encon Limited schedules 33rd AGM on August 14, 2026

scanx.trade, 14 Aug

Aarvi Encon vs Nifty 50: Share Price Performance Compared

Univest, 07 Sept

Aarvi Encon fixes Aug 7 record date for dividend payment

scanx.trade, 13 JulCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Watch Items

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

DalalBaazaar Thesis

StrongFinancial Health · Valuation

MiddlingBusiness Quality · Growth · Risk

WeakProfitability

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.

All 5 tripwires holding · see Key things to watch ↑