ACS Technologies Limited

Technology — Information Technology Services · NSE

₹66.24+₹1.29 (+1.99%)

DalalBaazaar Score

53 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Moderate

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

In simple words: The business is earning a fairly low return on the money invested in it, 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 ACS Technologies Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

ACS Technologies Limited provides system integration, security and surveillance, IOT solutions, and software products and services in India and internationally.

IndustryInformation Technology Services

SectorTechnology

Employees271

Annual revenue₹264 Cr

How does it make money?

Turns over ₹264 Cr a year. Of every ₹100 of sales, about ₹3 reaches shareholders as profit, with ₹7 left at the operating level before interest, tax and depreciation. Each of its 271 employees supports ₹97.5 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹97.5 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 9.6% 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?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +280% while net margin moved -23% 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+280%

Margin effect-23%

DalalBaazaar Score

53/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROE of 6.4% is weak

Quality vs. Valuation

Company Quality

55/ 100

Average

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

Valuation

46/ 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

34.1x

Sector Median

16.5x

median of 4 sector peers

⚠️Against its sector it trades 106% above the peer median of 16.5x.

vs. its own history

Not enough price and earnings history

vs. sector peers

Expensive

16.5x median of 4 peers · +106%

vs. generic bands

Fair

15x–35x

EV/EBITDA

27.5x

PEG

0.79

What's Good / What's Bad

🟢 What's Going Well2

Return on capital is rising
ROCE has improved from 5.3% to 9.6%.
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

5 items require attention · 3 high · 2 watch

🔴Debt has risen sharplyFinancial
Total debt is up 154% over 3 years, from ₹18 Cr to ₹47 Cr.
🔴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.
🔴Inventory building faster than salesFinancial
Inventory up 451% against revenue up 280% — stock may not be moving.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹42 Cr in the latest year.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 5348% over 3 years — each existing share owns a smaller slice of the company.

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?

A premium to the sector to defend
It trades 106% above the peer median. That premium needs a reason that persists, or it closes.
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 42% a year✓ 56.1% CAGR
Latest reported year was 244.3%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 5%✓ 7.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA stays below 2x✗ 2.4x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4Free cash flow remains positive✗ -₹42 Cr
Profit that never becomes cash eventually stops being profit.
5ROCE stays above 8%✓ 9.6%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

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
✓ 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

Price history

Quick Metrics

4 good · 5 neutral · 2 weak

Market Cap

₹493 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

34.1x

Fair

Fairly valued against the generic band

P/B Ratio

2.91x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹1.94

Profitable

Profitable on a per-share basis

ROE

6.4%

Weak

Weak capital efficiency

ROCE

9.6%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.35x

Low

Conservative leverage

Revenue Growth (YoY)

244.3%

Healthy

Healthy top-line growth

Profit Growth (YoY)

364.3%

Healthy

Profits growing at a healthy clip

Dividend Yield

None

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

Free Cash Flow

-₹42 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

6.7%

Average

Average margins

Net Margin

3.4%

Average

Average bottom-line conversion

Current Ratio

2.09

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.15

Defensive

Steadier than the market

52W Range Position

50%

Mid-range

Technical Snapshot

RSI (14)

6.2

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹69 Cr	₹82 Cr	₹127 Cr	₹264 Cr	+56.1%
EBITDA	₹6 Cr	₹11 Cr	₹10 Cr	₹20 Cr	+47.2%
EBITDA Margin	8.8%	12.8%	7.9%	7.4%	—
PAT (Net Profit)	₹3 Cr	₹4 Cr	₹5 Cr	₹9 Cr	+43.2%
EPS	₹0.61	₹0.74	₹0.8	₹1.4	+31.9%
ROE	3.5%	4.5%	4.9%	6.4%	—
ROCE	5.3%	5.6%	6.9%	9.6%	—
Total Debt	₹18 Cr	₹16 Cr	₹27 Cr	₹47 Cr	+36.4%
Free Cash Flow	-₹66 Cr	-₹3 Cr	₹5 Cr	-₹42 Cr	—

🟢 Revenue has grown at 56.1% a year over 3 years.

🟢 EBITDA has grown at 47.2% a year over 3 years.

🔴 EBITDA Margin has fallen from 8.8% to 7.4% over 3 years (-1.4 pts).

🟢 PAT (Net Profit) has grown at 43.2% a year over 3 years.

🟢 EPS has grown at 31.9% a year over 3 years.

🟢 ROE has risen from 3.5% to 6.4% over 3 years (+2.8 pts).

🟢 ROCE has risen from 5.3% to 9.6% over 3 years (+4.3 pts).

🔴 Total Debt has grown at 36.4% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹247 Cr

Total Liabilities

₹112 Cr

Cash & Equivalents

₹1 Cr

Operating Cash Flow

-₹36 Cr

Capex

-₹5 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

53.2%

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

6 general

ACS TECHNOLOGIES Lower Circuit Streak: Day 6 Price and Data

Univest, 16 Oct

ACS Technologies Ltd is Rated Buy by MarketsMOJO

MarketsMojo, 18 Oct

ACS Technologies (ACSTECH.NS) Slips 1.99% to ₹73.29 as Stock Retreats Toward Support - Cup and Handle

https://www.siam.in/, 07 Oct

BSE grants in-principle approval for ACS Technologies preferential issue

scanx.trade, 30 Sept

ACS TECHNOLOGIES LIMITED Upper Circuit Today: Price, Data and Peers

Univest, 25 Sept

ACS Technologies Boosts Working Capital with ₹4.09 Crore New Term Loan Approval

Sahi, 25 Jun

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 · Growth

MiddlingValuation

WeakBusiness Quality · Profitability · Risk

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

2 of 5 tripwires tripped — Debt / EBITDA stays below 2x; Free cash flow remains positive · see Key things to watch ↑