ADC India Communications Limited

Technology — Communication Equipment · BSE

₹2,337.20−₹9.10 (−0.39%)

DalalBaazaar Score

71 / 100

🟢 Good

Verdict

REASONABLE

Risk

Moderate

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

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

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:46 pm

Understanding the Business

Company site ↗

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

What does this company do?

ADC India Communications Limited provides copper and fiber physical connectivity in telecommunications and data networking solutions in India and internationally. It operates through the Telecommunication and IT-Networking segments.

IndustryCommunication Equipment

SectorTechnology

Employees22

Annual revenue₹200 Cr

How does it make money?

Turns over ₹200 Cr a year. Of every ₹100 of sales, about ₹9 reaches shareholders as profit, with ₹12 left at the operating level before interest, tax and depreciation. Each of its 22 employees supports ₹9.08 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹9.08 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.

Compared side by side in Peers ↓

What is its competitive advantage?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 28.2%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 21.8% against a peer median of 32.0% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

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 +40% while net margin moved +66% 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+40%

Margin effect+66%

DalalBaazaar Score

71/ 100

Good

Weighted across six categories. Every point is explained below.

✗ P/E of 47.5x is demanding — it needs sustained high growth to justify
• P/E is close to its own historical median of 40.4x
✗ P/B of 12.40x is a steep premium to book

Quality vs. Valuation

Company Quality

83/ 100

Excellent

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

Valuation

39/ 100

Expensive

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

A good business, but the price already reflects that. The quality is real; the question is whether you are overpaying for it today.

Historical Valuation

Current P/E

47.5x

3Y Median

40.4x

40 monthly readings · mean 43.7x · range 21.2x–117.4x

Sector Median

16.5x

median of 4 sector peers

⚠️Current valuation is approximately 18% above its 3y median of 40.4x. 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 187% above the peer median of 16.5x.

vs. its own history

Fair

40.4x median over 40 months · +18%

vs. sector peers

Expensive

16.5x median of 4 peers · +187%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

40.7x

PEG

1.47

What's Good / What's Bad

🟢 What's Going Well6

Margins are improving
EBITDA margin is up from 8.0% to 12.5% over 3 years.
Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
Return on equity is rising
ROE has improved from 15.7% to 21.8%.
Return on capital is rising
ROCE has improved from 21.2% to 28.2%.
High return on capital employed
ROCE of 28.2% is the mark of a business that converts capital into profit efficiently.
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

🔴Receivables growing faster than salesFinancial
Receivables up 126% against revenue up 40% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 28.2% 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 8.0% to 12.5%. 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 126% against revenue up 40%. 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 187% 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.

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

1Revenue growth stays above 9% a year✓ 11.8% CAGR
Latest reported year was 40.6%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 10%✓ 12.5%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✓ ₹13 Cr
Profit that never becomes cash eventually stops being profit.
4ROCE stays above 25%✓ 28.2%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Valuation vs its own median of 40.4x✓ 47.5x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

8 / 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

6 good · 3 neutral · 2 weak

Market Cap

₹1,075 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

47.5x

Expensive

Expensive — verify against sector peers

P/B Ratio

12.40x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹49.17

Profitable

Profitable on a per-share basis

ROE

21.8%

Strong

Strong capital efficiency

ROCE

28.2%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

Not available

No data

Source didn't return this field

Revenue Growth (YoY)

40.6%

Healthy

Healthy top-line growth

Profit Growth (YoY)

72.5%

Healthy

Profits growing at a healthy clip

Dividend Yield

1.07%

Modest

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

Free Cash Flow

₹13 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

16.9%

Good

Healthy core-business profitability

Net Margin

10.3%

Good

Strong bottom-line conversion

Current Ratio

2.66

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

1.10

Market-like

Moves roughly in line with the market

52W Range Position

78%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

2353.1 / 2360.7

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

46.5

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹143 Cr	₹178 Cr	₹187 Cr	₹200 Cr	+11.8%
EBITDA	₹11 Cr	₹43 Cr	₹33 Cr	₹25 Cr	+29.9%
EBITDA Margin	8.0%	24.2%	17.7%	12.5%	—
PAT (Net Profit)	₹8 Cr	₹21 Cr	₹24 Cr	₹19 Cr	+32.3%
EPS	₹17.77	₹44.97	₹53.17	₹41.15	+32.3%
ROE	15.7%	29.2%	35.0%	21.8%	—
ROCE	21.2%	39.0%	46.4%	28.2%	—
Free Cash Flow	-₹4 Cr	₹19 Cr	₹26 Cr	₹13 Cr	—

🟢 Revenue has grown at 11.8% a year over 3 years.

🟢 EBITDA has grown at 29.9% a year over 3 years.

🟢 EBITDA Margin has risen from 8.0% to 12.5% over 3 years (+4.5 pts).

🟢 PAT (Net Profit) has grown at 32.3% a year over 3 years.

🟢 EPS has grown at 32.3% a year over 3 years.

🟢 ROE has risen from 15.7% to 21.8% over 3 years (+6.1 pts).

🟢 ROCE has risen from 21.2% to 28.2% over 3 years (+7.0 pts).

🟢 Free Cash Flow has turned positive, from -₹4 Cr to ₹13 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹135 Cr

Total Liabilities

₹48 Cr

Total Debt

—

Cash & Equivalents

₹61 Cr

Operating Cash Flow

₹13 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

72.0%

Corporate Actions

Dividend Rate

₹25

Ex-Dividend Date

31 Jul 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 positive2 mixed1 general

ADC India Communications Ltd. Peer Comparison – Compare with Others

Value Research, 30 Aug

ADC India Communications Q1 FY27 Results: Revenue Rs 63 Cr, PAT Rs 8 Cr and Key Highlights

Univest, 13 AugResults

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

ADC India Communications standalone net profit rises 72.64% in the June 2026 quarter

Business Standard, 12 AugResults

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

ADC India recommends Rs 25 dividend; FY26 profit rises

scanx.trade, 21 MayCapital return

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

ADC India Communications Ltd Upgraded to Buy on Strong Financial and Technical Performance

MarketsMojo, 07 OctAnalyst view

🟢Potentially positiveAn analyst opinion changing, which moves the price without changing the business.

ADC India Communications Q1 FY27 Results Preview

Univest, 08 JulResults

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

Watch Items

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

StrongBusiness Quality · Financial Health · Growth · Profitability

WeakValuation · Risk

Points for each in the Score ↑

Good business, demanding price

The quality is real and the price already reflects it. Buying here is a bet that the business keeps compounding for long enough to grow into the multiple — which good businesses often do, but it removes the margin for error that a lower price would have given you. 1 high-severity red flag sits above this conclusion and should be read first.

All 5 tripwires holding · see Key things to watch ↑