Artificial Electronics Intelligent Material Limited

Technology — Software - Application · BSE

₹40.00−₹1.50 (−3.61%)

DalalBaazaar Score

71 / 100

🟢 Good

Verdict

REASONABLE

Risk

High

Driven by moderate debt load, 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, 6:55 pm

Understanding the Business

Company site ↗

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

What does this company do?

Artificial Electronics Intelligent Material Limited manufactures and sells semiconductors parts in India. It offers sapphire ingots and wafers, silicon carbide ingots and wafers, and silicon ingot and wafers.

IndustrySoftware - Application

SectorTechnology

Annual revenue₹150 Cr

How does it make money?

Turns over ₹150 Cr a year. Of every ₹100 of sales, about ₹24 reaches shareholders as profit, with ₹33 left at the operating level before interest, tax and depreciation.

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?Some evidence

ROCE of 21.5% 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 ROE32.0%

DalalBaazaar Score

71/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.55 — 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

72/ 100

Good

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

Valuation

88/ 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

2.1x

2Y Median

45.6x

28 monthly readings · mean 82.7x · range 3.1x–250.2x

Sector Median

16.5x

median of 4 sector peers

🟢Current valuation is approximately 95% below its 2y median of 45.6x. 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 87% below the peer median of 16.5x.

vs. its own history

Cheap

45.6x median over 28 months · -95%

vs. sector peers

Cheap

16.5x median of 4 peers · -87%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

4.3x

PEG

—

What's Good / What's Bad

🟢 What's Going Well2

Return on equity is rising
ROE has improved from -649.9% to 30.1%.
High return on capital employed
ROCE of 21.5% is the mark of a business that converts capital into profit efficiently.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

4 items require attention · 2 high · 2 watch

🔴Debt has risen sharplyFinancial
Total debt is up 44733% over 3 years, from ₹0 Cr to ₹110 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.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹166 Cr in the latest year.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 2345% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 21.5% 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.
Priced below its own history
The stock trades 95% 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 87% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.

🔴 Bear CaseWhat could go wrong?

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
2 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

1EBITDA margin holds above 31%✓ 33.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA stays below 2x✗ 2.2x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
3Free cash flow remains positive✗ -₹166 Cr
Profit that never becomes cash eventually stops being profit.
4ROCE stays above 19%✓ 21.5%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Valuation vs its own median of 45.6x✓ 2.1x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

9 / 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

7 good · 3 neutral · 1 weak

Market Cap

₹111 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

2.1x

Cheap

Cheap against the generic band

P/B Ratio

0.90x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹18.95

Profitable

Profitable on a per-share basis

ROE

30.1%

Strong

Strong capital efficiency

ROCE

21.5%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.90x

Moderate

Moderate leverage

Revenue Growth (YoY)

644.9%

Healthy

Healthy top-line growth

Profit Growth (YoY)

1108.3%

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

-₹166 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

32.8%

Good

Healthy core-business profitability

Net Margin

25.1%

Good

Strong bottom-line conversion

Current Ratio

6.40

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.55

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

58.6 / 74.9

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

5.4

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	—	₹2 Cr	₹26 Cr	₹150 Cr	—
EBITDA	-₹1 Cr	₹1 Cr	₹4 Cr	₹50 Cr	—
EBITDA Margin	—	23.5%	14.3%	33.1%	—
PAT (Net Profit)	-₹1 Cr	₹0 Cr	₹3 Cr	₹37 Cr	—
EPS	₹-4.61	₹1.53	₹3.43	₹13.06	—
ROE	-649.9%	68.3%	9.0%	30.1%	—
ROCE	—	29.0%	11.7%	21.5%	—
Total Debt	₹0 Cr	₹1 Cr	—	₹110 Cr	+665.4%
Free Cash Flow	-₹1 Cr	₹0 Cr	₹1 Cr	-₹166 Cr	—

🟢 EBITDA has turned positive, from -₹1 Cr to ₹50 Cr.

🟢 EBITDA Margin has risen from 23.5% to 33.1% over 3 years (+9.6 pts).

🟢 PAT (Net Profit) has turned positive, from -₹1 Cr to ₹37 Cr.

🟢 EPS has turned positive, from ₹-4.61 to ₹13.06.

🟢 ROE has risen from -649.9% to 30.1% over 3 years (+680.0 pts).

🔴 ROCE has fallen from 29.0% to 21.5% over 3 years (-7.5 pts).

🔴 Total Debt has grown at 665.4% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹267 Cr

Total Liabilities

₹145 Cr

Cash & Equivalents

₹8 Cr

Operating Cash Flow

-₹158 Cr

Capex

-₹9 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

33.5%

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 positive2 mixed3 general

AEIM Share Price News: Price Action and Peer Comparison

Univest, 07 Aug

Artificial Electronics Intelligent Material Limited Receives BSE Trading Approval for Preferential Issue of 97,53,750 Equity Shares

scanx.trade, 11 MarFunding

🟡Mixed / dependsNew funding changes the capital structure. Debt raises leverage; an equity raise dilutes existing holders.

Artificial Electronics Intelligent Material consolidated net profit rises 1954.10% in the June 2026 quarter

Business Standard, 14 AugResults

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

AEIM Share Price falls as sector comparison comes into focus

Univest, 30 SeptPrice 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.

Artificial Electronics sets book closure for AGM in September

scanx.trade, 20 Aug

Artificial Electronics Intelligent Material (BSE:526443) - Stock Analysis

Simply Wall Street, 14 Jul

Watch Items

Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
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

StrongBusiness Quality · Profitability · Valuation

MiddlingFinancial Health · Growth

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. 2 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 ↑