Avance Technologies Limited

Technology — Information Technology Services · NSE

₹0.77₹0.00 (0.00%)

DalalBaazaar Score

61 / 100

🟢 Good

Verdict

CAUTION

Risk

Moderate

Driven by 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, with modest growth. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:07 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 Avance Technologies Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Avance Technologies Limited engages in the dealing of IT products in India.

IndustryInformation Technology Services

SectorTechnology

Employees3

Annual revenue₹159 Cr

How does it make money?

Turns over ₹159 Cr a year. Of every ₹100 of sales, about ₹8 reaches shareholders as profit, with ₹8 left at the operating level before interest, tax and depreciation. Each of its 3 employees supports ₹53.09 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin8.3%

Net margin8.3%

Revenue / employee₹53.09 Cr

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 2.4% 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.

ROCE2.4%

ROE3.4%

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 +422% while net margin moved +525% 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+422%

Margin effect+525%

DalalBaazaar Score

61/ 100

Good

Weighted across six categories. Every point is explained below.

✗ ROCE of 2.4% is below 10% — capital is not working hard
• ROCE has been broadly stable
✗ EBITDA margin of 8.3% is thin — little cushion if costs rise
✗ Net margin of 7.7% is slim
• Revenue has compounded at 73.4% a year, which is the base these returns are earned on

Quality vs. Valuation

Company Quality

58/ 100

Average

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

Valuation

77/ 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

11.0x

Sector Median

16.5x

median of 4 sector peers

🟢Against its sector it trades 34% below the peer median of 16.5x.

vs. its own history

Not enough price and earnings history

vs. sector peers

Cheap

16.5x median of 4 peers · -34%

vs. generic bands

Cheap

Below 15x

P/E (Trailing)

11.0x

P/B

0.41x

EV/EBITDA

20.2x

PEG

0.05

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 1.6% to 8.3% over 3 years.
Return on equity is rising
ROE has improved from 0.1% to 3.4%.
Return on capital is rising
ROCE has improved from 0.1% to 2.4%.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention3

Free cash flow is negative
The business is not currently covering its capital spending from operations.
Receivables growing faster than sales
Receivables are up 3552% against revenue growth of 422% — customers are taking longer to pay.
Inventory building faster than sales
Inventory is up 1279% against revenue growth of 422% — stock may not be moving.

Red Flags

5 items require attention · 3 high · 2 watch

🔴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.
🔴Receivables growing faster than salesFinancial
Receivables up 3552% against revenue up 422% — sales are being booked faster than they are collected.
🔴Inventory building faster than salesFinancial
Inventory up 1279% against revenue up 422% — stock may not be moving.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹137 Cr in the latest year.
🟡Low reported insider holdingOwnership
Reported insider holding is 3.3%. For Indian companies this field is an unreliable proxy — check the official promoter shareholding in the exchange filing.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 1.6% to 8.3%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Cheaper than its peers
It trades 34% 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?

The debt load needs earnings to hold up
Debt is 12.4x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Sales are being booked faster than collected
Receivables are up 3552% against revenue up 422%. 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.
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 55% a year✓ 73.4% CAGR
Latest reported year was 62.1%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 6%✓ 8.3%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA falls below 3x✗ 12.4x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
4Free cash flow remains positive✗ -₹137 Cr
Profit that never becomes cash eventually stops being profit.
5ROCE stays above 8%✗ 2.4%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

5 / 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
✓ 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

Price history

Quick Metrics

5 good · 3 neutral · 3 weak

Market Cap

₹153 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

11.0x

Cheap

Cheap against the generic band

P/B Ratio

0.41x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹0.07

Profitable

Profitable on a per-share basis

ROE

3.4%

Weak

Weak capital efficiency

ROCE

2.4%

Weak

Low return on total capital employed

Debt/Equity

0.42x

Low

Conservative leverage

Revenue Growth (YoY)

62.1%

Healthy

Healthy top-line growth

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

-₹137 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹0.77

Operating Margin

2.5%

Weak

Thin margins leave little room for error

Net Margin

7.7%

Average

Average bottom-line conversion

Current Ratio

2.17

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.54

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

RSI (14)

35.3

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹31 Cr	₹144 Cr	₹172 Cr	₹159 Cr	+73.4%
EBITDA	₹0 Cr	₹2 Cr	₹7 Cr	₹13 Cr	+199.9%
EBITDA Margin	1.6%	1.7%	4.3%	8.3%	—
PAT (Net Profit)	₹0 Cr	₹5 Cr	₹5 Cr	₹13 Cr	+219.5%
EPS	₹0	₹0.02	₹0.03	₹0.07	+222.0%
ROE	0.1%	1.3%	1.4%	3.4%	—
ROCE	0.1%	0.7%	1.7%	2.4%	—
Total Debt	—	—	₹56 Cr	₹164 Cr	—
Free Cash Flow	₹6 Cr	₹30 Cr	-₹68 Cr	-₹137 Cr	—

🟢 Revenue has grown at 73.4% a year over 3 years.

🟢 EBITDA has grown at 199.9% a year over 3 years.

🟢 EBITDA Margin has risen from 1.6% to 8.3% over 3 years (+6.7 pts).

🟢 PAT (Net Profit) has grown at 219.5% a year over 3 years.

🟢 EPS has grown at 222.0% a year over 3 years.

🟢 ROE has risen from 0.1% to 3.4% over 3 years (+3.2 pts).

🟢 ROCE has risen from 0.1% to 2.4% over 3 years (+2.3 pts).

🔴 Free Cash Flow has turned negative, from ₹6 Cr to -₹137 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹649 Cr

Total Liabilities

₹255 Cr

Total Debt

₹164 Cr

Cash & Equivalents

₹49 Cr

Operating Cash Flow

-₹137 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

3.3%

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 positive5 general

Avance Technologies Share Price news near 52-week trough

Univest, 16 Oct

Avance Technologies Ltd. Key Financial Ratios – Valuation, Profitability & More

Value Research, 09 Oct

Avance Technologies Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 30 Sept

Avance Technologies consolidated net profit rises 52.47% in the June 2026 quarter

Business Standard, 12 AugResults

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

Avance Tech Consolidated March 2026 Net Sales at Rs 30.94 crore, down 35.97% Y-o-Y

Moneycontrol.com, 03 Jun

Avance Technologies appoints Santosh Hambare as Managing Director

scanx.trade, 30 Jun

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.
Reported insider holding is low — cross-check the official promoter shareholding % in the company's exchange filing.

DalalBaazaar Thesis

🔴Business QualityWeak7.5/20

🟢Financial HealthStrong13.3/20

🟢GrowthStrong14.9/20

🟡ProfitabilityModerate8.3/15

🟢ValuationAttractive13/15

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

This thesis breaks if

✓Revenue growth stays above 55% a year73.4% CAGR
✓EBITDA margin holds above 6%8.3%
✗Debt / EBITDA falls below 3x12.4x
✗Free cash flow remains positive-₹137 Cr
✗ROCE stays above 8%2.4%