Arihant Academy Limited

Sector n/a · NSE

₹145.05−₹1.95 (−1.33%)

DalalBaazaar Score

72 / 100

🟢 Good

Verdict

REASONABLE

Risk

High

Driven by short-term liabilities exceed short-term assets, micro-cap size, which brings thin liquidity.

In simple words: Strong business and financial position, with both sales and profits growing well. Short-term liquidity is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:49 pm

Understanding the Business

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

How does it make money?

Turns over ₹56 Cr a year. Of every ₹100 of sales, about ₹16 reaches shareholders as profit, with ₹28 left at the operating level before interest, tax and depreciation.

What is its competitive advantage?Some evidence

ROCE of 36.4% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +142% while net margin moved +153% 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+142%

Margin effect+153%

DalalBaazaar Score

72/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast

Quality vs. Valuation

Company Quality

84/ 100

Excellent

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

Valuation

60/ 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.

vs. its own history

Not enough price and earnings history

vs. sector peers

Not enough peers with a usable P/E

vs. generic bands

No P/E available

EV/EBITDA

11.0x

PEG

—

What's Good / What's Bad

🟢 What's Going Well6

Margins are improving
EBITDA margin is up from 20.9% to 27.8% 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 7.6% to 27.1%.
Return on capital is rising
ROCE has improved from 11.7% to 36.4%.
High return on capital employed
ROCE of 36.4% 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

2 items require attention · 1 high · 1 watch

🔴Receivables growing faster than salesFinancial
Receivables up 1656% against revenue up 142% — sales are being booked faster than they are collected.
🟡Short-term liquidity is tightFinancial
Current ratio of 0.91 — near-term obligations exceed near-term assets.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 36.4% 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 20.9% to 27.8%. 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 1656% against revenue up 142%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
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 26% a year✓ 34.3% CAGR
Latest reported year was 37.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 26%✓ 27.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✓ ₹10 Cr
Profit that never becomes cash eventually stops being profit.
4ROCE stays above 33%✓ 36.4%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

6 / 8 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
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

6 good · 5 neutral · 0 weak

Market Cap

₹176 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

Not available

No data

Source didn't return this field

P/B Ratio

Not available

No data

Source didn't return this field

EPS (TTM)

₹15.04

Profitable

Profitable on a per-share basis

ROE

27.1%

Strong

Strong capital efficiency

ROCE

36.4%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

Not available

No data

Source didn't return this field

Revenue Growth (YoY)

37.9%

Healthy

Healthy top-line growth

Profit Growth (YoY)

104.9%

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

₹10 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Gross Margin

83.5%

Proxy

Operating margin unavailable — showing gross margin instead

Net Margin

16.3%

Good

Strong bottom-line conversion

Current Ratio

0.91

Adequate

Adequate, but no real cushion

Technical Snapshot

SMA 20 / SMA 50

253.2 / 390.9

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

45.0

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹23 Cr	₹30 Cr	₹41 Cr	₹56 Cr	+34.3%
EBITDA	₹5 Cr	₹4 Cr	₹8 Cr	₹16 Cr	+47.6%
EBITDA Margin	20.9%	12.1%	18.5%	27.8%	—
PAT (Net Profit)	₹1 Cr	₹2 Cr	₹4 Cr	₹9 Cr	+82.9%
EPS	₹4.82	₹2.56	₹7.34	₹15.04	+46.1%
ROE	7.6%	7.3%	17.8%	27.1%	—
ROCE	11.7%	8.4%	22.1%	36.4%	—
Free Cash Flow	-₹1 Cr	₹3 Cr	₹4 Cr	₹10 Cr	—

🟢 Revenue has grown at 34.3% a year over 3 years.

🟢 EBITDA has grown at 47.6% a year over 3 years.

🟢 EBITDA Margin has risen from 20.9% to 27.8% over 3 years (+6.9 pts).

🟢 PAT (Net Profit) has grown at 82.9% a year over 3 years.

🟢 EPS has grown at 46.1% a year over 3 years.

🟢 ROE has risen from 7.6% to 27.1% over 3 years (+19.6 pts).

🟢 ROCE has risen from 11.7% to 36.4% over 3 years (+24.7 pts).

🟢 Free Cash Flow has turned positive, from -₹1 Cr to ₹10 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹57 Cr

Total Liabilities

₹24 Cr

Total Debt

—

Cash & Equivalents

₹5 Cr

Operating Cash Flow

₹10 Cr

Capex

-₹0 Cr

Recent News

2 positive1 mixed3 general

Arihant Academy Share Price rises: fundamentals and peers

Univest, 31 AugPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Here's Why We Think Arihant Academy (NSE:ARIHANTACA) Might Deserve Your Attention Today

Simply Wall Street, 27 Aug

Arihant Academy Ltd. Key Financial Ratios – Valuation, Profitability & More

Value Research, 30 Aug

Arihant Academy (NSE: ARIHANTACA) Quarterly Sales Rise 14.96%: Profit, ROCE and P/E Explained

Kalkine India, 02 OctResults

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

Bonus issue alert! Last day to buy these 2 microcap stocks for bonus share rewards. Do you own?

The Economic Times, 30 SeptCapital return

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

Arihant Academy Limited Receives Excellence Award at Economic Times Maharashtra Business Awards 2026

scanx.trade, 28 Apr

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
Sector/industry classification unavailable — verify manually for peer comparison.
3 metrics 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

MiddlingValuation

WeakRisk

Points for each in the Score ↑

Good business at a fair price

A sound business at a reasonable valuation. Suitable for a long-term holding, with the valuation and the direction of margins worth watching rather than the business itself. 1 high-severity red flag sits above this conclusion and should be read first.

All 4 tripwires holding · see Key things to watch ↑