Alankit Limited

Technology — Information Technology Services · NSE

₹7.25+₹0.05 (+0.69%)

DalalBaazaar Score

55 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

Driven by high debt relative to equity, 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, but sales are shrinking. Debt is 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 Alankit Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Alankit Limited provides e-governance products and services in India. It operates through four segments: Financial Services, E- Governance Services, E- Governance Trading, and IT Enabled Services.

IndustryInformation Technology Services

SectorTechnology

Employees1,065

Annual revenue₹343 Cr

How does it make money?

Turns over ₹343 Cr a year. Of every ₹100 of sales, about ₹6 reaches shareholders as profit, with ₹13 left at the operating level before interest, tax and depreciation. Each of its 1,065 employees supports ₹32.2 lakh of revenue a year, the signature of a people-led business.

EBITDA margin13.2%

Net margin5.6%

Revenue / employee₹32.2 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.

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 7.0% 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.

ROCE7.0%

ROE6.0%

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 +10% while net margin moved -151% 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+10%

Margin effect-151%

DalalBaazaar Score

55/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue CAGR of only 3.3% — barely ahead of inflation
✗ Latest-year revenue growth of -18.0% is below the longer-term trend — momentum is fading

Quality vs. Valuation

Company Quality

51/ 100

Average

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 reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

10.2x

2Y Median

14.8x

28 monthly readings · mean 15.7x · range 9.3x–28.4x

Sector Median

16.5x

median of 4 sector peers

🟢Current valuation is approximately 31% below its 2y median of 14.8x. 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 38% below the peer median of 16.5x.

vs. its own history

Cheap

14.8x median over 28 months · -31%

vs. sector peers

Cheap

16.5x median of 4 peers · -38%

vs. generic bands

Cheap

Below 15x

P/E (Trailing)

10.2x

P/B

0.61x

EV/EBITDA

4.5x

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from -8.7% to 13.2% over 3 years.
Return on equity is rising
ROE has improved from -21.0% to 6.0%.
Return on capital is rising
ROCE has improved from -18.5% to 7.0%.
Valuation below its historical average
At 10.2x the stock trades 31% below its own median of 14.8x.

🔴 What Needs Attention3

Debt is rising
Total debt is up 43% over 3 years — worth checking what it funded.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Inventory building faster than sales
Inventory is up 589% against revenue growth of 10% — stock may not be moving.

Red Flags

5 items require attention · 2 high · 3 watch

🔴High leverageFinancial
Debt/Equity of 6.35x — earnings must service borrowings before shareholders see anything.
🔴Inventory building faster than salesFinancial
Inventory up 589% against revenue up 10% — stock may not be moving.
🟡Debt is increasingFinancial
Total debt is up 43% over 3 years.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹22 Cr in the latest year.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 21% 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 -8.7% to 13.2%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
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 38% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.

🔴 Bear CaseWhat could go wrong?

Leverage amplifies any setback
Debt/Equity of 6.35x. Interest is payable whether or not the business has a good year.
Growth barely outpaces inflation
Revenue compounding at 3.3% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
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 11%✓ 13.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹22 Cr
Profit that never becomes cash eventually stops being profit.
3Revenue growth stays above 4% a year✗ 3.3% CAGR
Latest reported year was -18.0%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
4Debt / EBITDA stays below 2x✓ 0.4x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 8%✗ 7.0%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

3 / 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

3 good · 3 neutral · 5 weak

Market Cap

₹221 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

10.2x

Cheap

Cheap against the generic band

P/B Ratio

0.61x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹0.71

Profitable

Profitable on a per-share basis

ROE

6.0%

Weak

Weak capital efficiency

ROCE

7.0%

Weak

Low return on total capital employed

Debt/Equity

6.35x

High

High leverage

Revenue Growth (YoY)

-18.0%

Shrinking

Sales are contracting

Profit Growth (YoY)

0.0%

Modest

Slow profit growth

Dividend Yield

None

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

Free Cash Flow

-₹22 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹7.25

Operating Margin

8.7%

Average

Average margins

Net Margin

8.2%

Average

Average bottom-line conversion

Current Ratio

1.96

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.71

Defensive

Steadier than the market

52W Range Position

18%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

7.6 / 7.9

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

31.1

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹312 Cr	₹236 Cr	₹301 Cr	₹343 Cr	+3.3%
EBITDA	-₹27 Cr	₹36 Cr	₹48 Cr	₹45 Cr	—
EBITDA Margin	-8.7%	15.2%	15.8%	13.2%	—
PAT (Net Profit)	-₹34 Cr	₹22 Cr	₹20 Cr	₹19 Cr	—
EPS	₹-2.07	₹0.96	₹0.73	₹0.7	—
ROE	-21.0%	7.8%	6.7%	6.0%	—
ROCE	-18.5%	9.2%	10.4%	7.0%	—
Total Debt	₹13 Cr	₹44 Cr	₹12 Cr	₹19 Cr	+12.6%
Free Cash Flow	-₹76 Cr	-₹71 Cr	₹11 Cr	-₹22 Cr	—

🟢 Revenue has grown at 3.3% a year over 3 years.

🟢 EBITDA has turned positive, from -₹27 Cr to ₹45 Cr.

🟢 EBITDA Margin has risen from -8.7% to 13.2% over 3 years (+21.9 pts).

🟢 PAT (Net Profit) has turned positive, from -₹34 Cr to ₹19 Cr.

🟢 EPS has turned positive, from ₹-2.07 to ₹0.7.

🟢 ROE has risen from -21.0% to 6.0% over 3 years (+27.0 pts).

🟢 ROCE has risen from -18.5% to 7.0% over 3 years (+25.5 pts).

🔴 Total Debt has grown at 12.6% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹462 Cr

Total Liabilities

₹121 Cr

Total Debt

₹19 Cr

Cash & Equivalents

₹34 Cr

Operating Cash Flow

-₹22 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

40.0%

Insider Holding

8.3%

Corporate Actions

Ex-Dividend Date

21 Sept 2022

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

Alankit enters agreement with GLEIF to act as validation agent

scanx.trade, 15 Oct

Alankit Share Price Forecast: 3 Year Outlook to 2030

Univest, 10 Jul

Alankit Ltd (ALANKIT.NS) Edges Higher: Stock Holds Above ₹8 Support Zone - Golden Cross

siam.in, 03 Sept

Alankit Share Price: Buy or Sell

Univest, 04 Sept

Indian Overseas Bank (IOB) embarks on financial inclusion with Alankit

APAC Media, 22 Apr

Alankit promoter Alka Agarwal converts 1.65 crore warrants into equity

scanx.trade, 10 Oct

Watch Items

Revenue growth is negative (-18.0%) on the latest reported period — check if this is one-off or a trend.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🟡Business QualityAdequate11.7/20

🟡Financial HealthAdequate10.6/20

🔴GrowthWeak7.6/20

🟡ProfitabilityModerate8.3/15

🟢ValuationAttractive13.2/15

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

This thesis breaks if

✓EBITDA margin holds above 11%13.2%
✗Free cash flow remains positive-₹22 Cr
✗Revenue growth stays above 4% a year3.3% CAGR
✓Debt / EBITDA stays below 2x0.4x
✗ROCE stays above 8%7.0%