Austere Systems Limited

Technology — Information Technology Services · BSE

₹42.50+₹0.50 (+1.19%)

DalalBaazaar Score

70 / 100

🟢 Good

Verdict

REASONABLE

Risk

Moderate

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

In simple words: Strong business and financial position, though profits are falling even as sales grow. The direction of profits is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:07 pm

Mixed / neutral. No major red flags jump out, but nothing here screams "obviously cheap" either. This is a name that needs a peer comparison and a view on near-term earnings triggers before sizing a position.

Understanding the Business

Company site ↗

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

What does this company do?

Austere Systems Limited operates as a software development, and information technology (IT) services and solutions company in India.

IndustryInformation Technology Services

SectorTechnology

Employees154

Annual revenue₹22 Cr

How does it make money?

Turns over ₹22 Cr a year. Of every ₹100 of sales, about ₹23 reaches shareholders as profit, with ₹35 left at the operating level before interest, tax and depreciation. Each of its 154 employees supports ₹14.5 lakh of revenue a year, the signature of a people-led business.

EBITDA margin34.6%

Net margin22.6%

Revenue / employee₹14.5 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?Some evidence

ROCE of 19.3% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

ROCE19.3%

ROE19.7%

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 +45% while net margin moved +96% 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+45%

Margin effect+96%

DalalBaazaar Score

70/ 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

74/ 100

Good

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

Valuation

87/ 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

7.8x

1.3Y Median

17.6x

15 monthly readings · mean 17.3x · range 14.7x–20.8x

Sector Median

16.5x

median of 4 sector peers

🟢Current valuation is approximately 56% below its 1.3y median of 17.6x. 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 53% below the peer median of 16.5x.

vs. its own history

Cheap

17.6x median over 15 months · -56%

vs. sector peers

Cheap

16.5x median of 4 peers · -53%

vs. generic bands

Cheap

Below 15x

P/E (Trailing)

7.8x

P/B

1.27x

EV/EBITDA

5.3x

PEG

0.19

Dividend Yield

3.76%

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 18.7% to 34.6% over 3 years.
Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
Valuation below its historical average
At 7.8x the stock trades 56% below its own median of 17.6x.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention3

Return on equity is falling
ROE has dropped from 36.5% to 14.4% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 42.7% to 19.3% — often a sign of competition or overexpansion.
Receivables growing faster than sales
Receivables are up 137% against revenue growth of 45% — customers are taking longer to pay.

Red Flags

1 item require attention · 1 high

🔴Receivables growing faster than salesFinancial
Receivables up 137% against revenue up 45% — 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 19.3% 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 18.7% to 34.6%. 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 56% 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 53% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
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 137% against revenue up 45%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Returns on shareholder capital are falling
ROE has dropped from 36.5% to 14.4%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
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 10% a year✓ 13.2% CAGR
Latest reported year was 4.1%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 33%✓ 34.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✓ ₹2 Cr
Profit that never becomes cash eventually stops being profit.
4ROCE stays above 16%✓ 19.3%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Valuation vs its own median of 17.6x✓ 7.8x 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

7 good · 3 neutral · 1 weak

Market Cap

₹45 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

7.8x

Cheap

Cheap against the generic band

P/B Ratio

1.27x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹5.47

Profitable

Profitable on a per-share basis

ROE

19.7%

Strong

Strong capital efficiency

ROCE

19.3%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

Not available

No data

Source didn't return this field

Revenue Growth (YoY)

4.1%

Modest

Modest growth

Profit Growth (YoY)

-20.1%

Falling

Profits are shrinking

Dividend Yield

3.76%

Healthy

Meaningful cash return while you hold the stock

Free Cash Flow

₹1 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹42.5

ROA

12.7%

Good

Assets are working hard

Operating Margin

28.2%

Good

Healthy core-business profitability

Net Margin

22.6%

Good

Strong bottom-line conversion

Current Ratio

4.10

Comfortable

Healthy short-term liquidity

52W Range Position

34%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

39.5 / 40.4

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

64.8

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹15 Cr	₹19 Cr	₹19 Cr	₹22 Cr	+13.2%
EBITDA	₹3 Cr	₹6 Cr	₹4 Cr	₹8 Cr	+38.9%
EBITDA Margin	18.7%	33.8%	23.9%	34.6%	—
PAT (Net Profit)	₹2 Cr	₹4 Cr	₹3 Cr	₹5 Cr	+41.7%
EPS	₹1.69	₹3.96	₹2.73	—	—
ROE	36.5%	46.1%	17.7%	14.4%	—
ROCE	42.7%	58.7%	23.6%	19.3%	—
Total Debt	₹1 Cr	₹0 Cr	₹0 Cr	—	—
Free Cash Flow	-₹1 Cr	₹3 Cr	₹4 Cr	₹2 Cr	—

🟢 Revenue has grown at 13.2% a year over 3 years.

🟢 EBITDA has grown at 38.9% a year over 3 years.

🟢 EBITDA Margin has risen from 18.7% to 34.6% over 3 years (+15.8 pts).

🟢 PAT (Net Profit) has grown at 41.7% a year over 3 years.

🔴 ROE has fallen from 36.5% to 14.4% over 3 years (-22.1 pts).

🔴 ROCE has fallen from 42.7% to 19.3% over 3 years (-23.4 pts).

🟢 Free Cash Flow has turned positive, from -₹1 Cr to ₹2 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹40 Cr

Total Liabilities

₹5 Cr

Total Debt

—

Cash & Equivalents

₹4 Cr

Operating Cash Flow

₹4 Cr

Capex

-₹2 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

73.4%

Corporate Actions

Dividend Rate

₹1.6

Ex-Dividend Date

23 Sept 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

1 mixed5 general

AUSTERE SYSTEMS LIMITED Share Price

Upstox, 18 Feb

Austere Systems Ltd Key Financial Ratios – Valuation, Profitability & More

Value Research, 02 Sept

Austere Systems gets SEBI warning for late NCLAT order disclosure

scanx.trade, 02 Oct

1000x subscribed, 1100x retail bid, yet this newly listed SME stock trades 10% below issue price

Livemint, 19 Dec

Austere Systems Limited Schedules Board Meeting on May 26, 2026 to Approve FY26 Audited Financial Results

scanx.trade, 26 MayResults

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

Strong listing: Austere Systems shares list at 37% premium after 1,000x subscription

Moneycontrol.com, 12 Sept

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

🟢Business QualityStrong14.3/20

🟢Financial HealthStrong17.5/20

🟢GrowthStrong13.3/20

🟢ProfitabilityStrong10.2/15

🟢ValuationAttractive12.8/15

🔴RiskHigh2.3/10

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. 1 high-severity red flag sits above this conclusion and should be read first.

This thesis breaks if

✓Revenue growth stays above 10% a year13.2% CAGR
✓EBITDA margin holds above 33%34.6%
✓Free cash flow remains positive₹2 Cr
✓ROCE stays above 16%19.3%
✓Valuation vs its own median of 17.6x7.8x today