Ace Software Exports Limited

Technology — Software - Application · BSE

₹193.85+₹1.40 (+0.73%)

DalalBaazaar Score

57 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

Driven by negative free cash flow, 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, 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, 6:09 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 Ace Software Exports Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Ace Software Exports Limited, together with its subsidiaries, provides document management, digital publishing, and data conversion solutions using process engineering and conversion systems in India.

IndustrySoftware - Application

SectorTechnology

Employees37

Annual revenue₹56 Cr

How does it make money?

Turns over ₹56 Cr a year. Of every ₹100 of sales, about ₹8 reaches shareholders as profit, with ₹15 left at the operating level before interest, tax and depreciation. Each of its 37 employees supports ₹1.52 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin15.0%

Net margin7.8%

Revenue / employee₹1.52 Cr

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 5.3% 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.

ROCE5.3%

ROE3.6%

Peer median ROE32.0%

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +443% while net margin moved +451% 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+443%

Margin effect+451%

DalalBaazaar Score

57/ 100

Moderate

Weighted across six categories. Every point is explained below.

✓ Beta of 0.31 — 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

61/ 100

Average

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

Valuation

45/ 100

Fair

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

77.9x

3Y Median

73.9x

40 monthly readings · mean 265.4x · range 20.6x–2220.0x

Sector Median

16.5x

median of 4 sector peers

🟡Currently trading close to its 3y median of 73.9x — the market is paying about what it usually pays for this company.

⚠️Against its sector it trades 370% above the peer median of 16.5x.

vs. its own history

Fair

73.9x median over 40 months · +5%

vs. sector peers

Expensive

16.5x median of 4 peers · +370%

vs. generic bands

Expensive

Above 35x

P/E (Trailing)

77.9x

P/B

2.82x

EV/EBITDA

53.9x

PEG

0.37

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 7.8% to 15.0% over 3 years.
Return on capital is rising
ROCE has improved from 0.9% to 5.3%.
Very low debt
Debt/Equity of 0.12x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention3

Free cash flow is negative
The business is not currently covering its capital spending from operations.
Receivables growing faster than sales
Receivables are up 111333% against revenue growth of 443% — customers are taking longer to pay.
Inventory building faster than sales
Inventory is up 513% against revenue growth of 443% — stock may not be moving.

Red Flags

4 items require attention · 3 high · 1 watch

🔴Free cash flow negative for 4 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴Receivables growing faster than salesFinancial
Receivables up 111333% against revenue up 443% — sales are being booked faster than they are collected.
🔴Inventory building faster than salesFinancial
Inventory up 513% against revenue up 443% — stock may not be moving.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 139% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 7.8% to 15.0%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
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?

Sales are being booked faster than collected
Receivables are up 111333% against revenue up 443%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
A premium to the sector to defend
It trades 370% above the peer median. That premium needs a reason that persists, or it closes.
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.
Several serious flags at once
3 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

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

1Revenue growth stays above 57% a year✓ 75.8% CAGR
Latest reported year was 7.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 13%✓ 15.0%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹40 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.8x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 8%✗ 5.3%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

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

2 good · 4 neutral · 5 weak

Market Cap

₹460 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

77.9x

Expensive

Expensive — verify against sector peers

P/B Ratio

2.82x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹2.49

Profitable

Profitable on a per-share basis

ROE

3.6%

Weak

Weak capital efficiency

ROCE

5.3%

Weak

Low return on total capital employed

Debt/Equity

0.12x

Low

Conservative leverage

Revenue Growth (YoY)

7.9%

Modest

Modest growth

Profit Growth (YoY)

-32.3%

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

-₹40 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹193.85

Operating Margin

6.6%

Average

Average margins

Net Margin

7.4%

Average

Average bottom-line conversion

Current Ratio

2.86

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.31

Defensive

Steadier than the market

52W Range Position

32%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

198.0 / 192.5

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

43.7

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹10 Cr	₹24 Cr	₹32 Cr	₹56 Cr	+75.8%
EBITDA	₹1 Cr	₹1 Cr	₹8 Cr	₹8 Cr	+118.9%
EBITDA Margin	7.8%	5.4%	24.5%	15.0%	—
PAT (Net Profit)	₹0 Cr	₹5 Cr	₹5 Cr	₹4 Cr	+210.5%
EPS	₹0.15	₹3.65	₹5.43	₹3.27	+180.9%
ROE	0.7%	16.4%	5.7%	3.6%	—
ROCE	0.9%	16.8%	7.3%	5.3%	—
Total Debt	—	₹2 Cr	₹6 Cr	₹15 Cr	—
Free Cash Flow	-₹1 Cr	-₹4 Cr	-₹34 Cr	-₹40 Cr	—

🟢 Revenue has grown at 75.8% a year over 3 years.

🟢 EBITDA has grown at 118.9% a year over 3 years.

🟢 EBITDA Margin has risen from 7.8% to 15.0% over 3 years (+7.2 pts).

🟢 PAT (Net Profit) has grown at 210.5% a year over 3 years.

🟢 EPS has grown at 180.9% a year over 3 years.

🟢 ROE has risen from 0.7% to 3.6% over 3 years (+2.9 pts).

🟢 ROCE has risen from 0.9% to 5.3% over 3 years (+4.4 pts).

Balance Sheet & Cash Flow — FY2026

Total Assets

₹149 Cr

Total Liabilities

₹22 Cr

Total Debt

₹15 Cr

Cash & Equivalents

₹21 Cr

Operating Cash Flow

₹5 Cr

Capex

-₹45 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

68.1%

Corporate Actions

Ex-Dividend Date

18 Sept 2008

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

1 mixed1 negative4 general

SRIT INDIA LTD. Stock/Share price , NSE/BSE Forecast News and Live Quotes

Equitymaster, 18 Oct

Ace Software Exports sets Sep 28 AGM date; FY26 profit falls 18%

scanx.trade, 28 SeptResults

🔴Potentially negativeReported deterioration, which feeds the growth and margin inputs on this page directly.

Ace Software Exports Ltd. Key Financial Ratios – Valuation, Profitability & More

Value Research, 30 Aug

Ace Software Exports Ltd. Peer Comparison – Compare with Others

Value Research, 31 Aug

Ace Software Exports publishes Q1FY27 results in Financial Express

scanx.trade, 31 JulResults

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

TECHNVISN Stock Price and Chart — NSE:TECHNVISN

TradingView, 22 Apr

Watch Items

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

DalalBaazaar Thesis

🟡Business QualityAdequate10.2/20

🟢Financial HealthStrong14.5/20

🟢GrowthStrong14.9/20

🔴ProfitabilityWeak6.2/15

🟡ValuationFair6.9/15

🔴RiskHigh4/10

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. 3 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓Revenue growth stays above 57% a year75.8% CAGR
✓EBITDA margin holds above 13%15.0%
✗Free cash flow remains positive-₹40 Cr
✓Debt / EBITDA stays below 2x1.8x
✗ROCE stays above 8%5.3%