ASM Technologies Limited

Technology — Information Technology Services · BSE

₹6,602.45−₹34.40 (−0.52%)

DalalBaazaar Score

69 / 100

🟢 Good

Verdict

NEUTRAL

Risk

High

Driven by negative free cash flow, small-cap size, which brings sharper price swings, a very high earnings multiple, which leaves little margin for disappointment.

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 ASM Technologies Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

ASM Technologies Limited provides consulting and product development services in India and internationally.

IndustryInformation Technology Services

SectorTechnology

Employees2,343

Annual revenue₹529 Cr

How does it make money?

Turns over ₹529 Cr a year. Of every ₹100 of sales, about ₹11 reaches shareholders as profit, with ₹20 left at the operating level before interest, tax and depreciation. Each of its 2,343 employees supports ₹22.6 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹22.6 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?Some evidence

ROCE of 23.8% 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%

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +140% while net margin moved +165% 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+140%

Margin effect+165%

DalalBaazaar Score

69/ 100

Good

Weighted across six categories. Every point is explained below.

✗ P/E of 133.8x is demanding — it needs sustained high growth to justify
• P/E is close to its own historical median of 147.0x
✗ P/B of 31.37x is a steep premium to book

Quality vs. Valuation

Company Quality

80/ 100

Excellent

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

Valuation

35/ 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

133.8x

3Y Median

147.0x

40 monthly readings · mean 152.4x · range 48.7x–305.8x

Sector Median

16.5x

median of 4 sector peers

🟡Currently trading close to its 3y median of 147.0x — the market is paying about what it usually pays for this company.

⚠️Against its sector it trades 709% above the peer median of 16.5x.

vs. its own history

Fair

147.0x median over 40 months · -9%

vs. sector peers

Expensive

16.5x median of 4 peers · +709%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

91.9x

PEG

1.57

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 11.9% to 20.1% over 3 years.
Return on equity is rising
ROE has improved from 13.3% to 19.8%.
Return on capital is rising
ROCE has improved from 18.4% to 23.8%.
High return on capital employed
ROCE of 23.8% 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 · 3 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 72% over 3 years, from ₹74 Cr to ₹128 Cr.
🔴Free cash flow negative for 3 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴Inventory building faster than salesFinancial
Inventory up 2062% against revenue up 140% — stock may not be moving.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 33% 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 23.8% 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 11.9% to 20.1%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.

🔴 Bear CaseWhat could go wrong?

A premium to the sector to defend
It trades 709% 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
Small 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 25% a year✓ 33.8% CAGR
Latest reported year was 61.8%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 18%✓ 20.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹25 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.2x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 21%✓ 23.8%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

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

6 good · 2 neutral · 3 weak

Market Cap

₹9,632 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

133.8x

Expensive

Expensive — verify against sector peers

P/B Ratio

31.37x

Rich

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

EPS (TTM)

₹49.34

Profitable

Profitable on a per-share basis

ROE

19.8%

Strong

Strong capital efficiency

ROCE

23.8%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.42x

Low

Conservative leverage

Revenue Growth (YoY)

61.8%

Healthy

Healthy top-line growth

Profit Growth (YoY)

72.4%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.33%

Modest

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

Free Cash Flow

-₹25 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

20.7%

Good

Healthy core-business profitability

Net Margin

11.9%

Good

Strong bottom-line conversion

Current Ratio

2.61

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.90

Market-like

Moves roughly in line with the market

52W Range Position

87%

Near high

Near its 52-week high

Technical Snapshot

SMA 20 / SMA 50

6793.2 / 5885.9

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

37.3

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹220 Cr	₹202 Cr	₹289 Cr	₹529 Cr	+33.8%
EBITDA	₹26 Cr	₹12 Cr	₹53 Cr	₹106 Cr	+59.3%
EBITDA Margin	11.9%	5.9%	18.5%	20.1%	—
PAT (Net Profit)	₹10 Cr	-₹4 Cr	₹26 Cr	₹61 Cr	+85.3%
EPS	₹9.27	₹-6.62	₹17.3	₹51.06	+76.6%
ROE	13.3%	-3.0%	15.9%	19.8%	—
ROCE	18.4%	-0.4%	26.5%	23.8%	—
Total Debt	₹74 Cr	₹82 Cr	₹86 Cr	₹128 Cr	+19.9%
Free Cash Flow	₹1 Cr	-₹3 Cr	-₹50 Cr	-₹25 Cr	—

🟢 Revenue has grown at 33.8% a year over 3 years.

🟢 EBITDA has grown at 59.3% a year over 3 years.

🟢 EBITDA Margin has risen from 11.9% to 20.1% over 3 years (+8.2 pts).

🟢 PAT (Net Profit) has grown at 85.3% a year over 3 years.

🟢 EPS has grown at 76.6% a year over 3 years.

🟢 ROE has risen from 13.3% to 19.8% over 3 years (+6.5 pts).

🟢 ROCE has risen from 18.4% to 23.8% over 3 years (+5.5 pts).

🔴 Total Debt has grown at 19.9% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹1 Cr to -₹25 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹503 Cr

Total Liabilities

₹196 Cr

Cash & Equivalents

₹6 Cr

Operating Cash Flow

₹68 Cr

Capex

-₹93 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

74.4%

Corporate Actions

Dividend Rate

₹21.5

Ex-Dividend Date

12 Aug 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

2 mixed4 general

ASM Technologies Q2 Results 2026 - Find ASM Technologies Q2 Earnings Result | ASM Technologies Q2 results

Livemint, 16 OctResults

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

ASM Technologies sets Oct 4 EGM to approve ₹525.99 crore preferential allotment

scanx.trade, 15 Oct

ASM Technologies - FIIs turn buyers after two quarters of selling; 13 stocks rally up to 665%, 5 become multibaggers

The Economic Times, 03 Aug

ASM Technologies Raises Rs 526 Crore via Preferential Equity Allotment

Whalesbook, 16 OctFunding

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

ASM Technologies Ltd. Peer Comparison – Compare with Others

Value Research, 30 Aug

Mukul Agrawal portfolio stock ASM Tech zooms 49% in 6 days; here's why

Business Standard, 10 Sept

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

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

1 of 5 tripwires tripped — Free cash flow remains positive · see Key things to watch ↑