BITS Limited

Consumer Defensive — Education & Training Services · BSE

₹6.24−₹0.14 (−2.19%)

DalalBaazaar Score

70 / 100

🟢 Good

Verdict

NEUTRAL

Risk

Moderate

Driven by micro-cap size, which brings thin liquidity, a very high earnings multiple, which leaves little margin for disappointment.

In simple words: The business is earning a fairly low return on the money invested in it, with both sales and profits growing well. Valuation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:47 pm

Understanding the Business

Company site ↗

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

What does this company do?

BITS Limited provides educational services in India and internationally.

IndustryEducation & Training Services

SectorConsumer Defensive

Employees3

Annual revenue₹1 Cr

How does it make money?

Turns over ₹1 Cr a year. Of every ₹100 of sales, about ₹49 reaches shareholders as profit, with ₹64 left at the operating level before interest, tax and depreciation. Each of its 3 employees supports ₹48.9 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹48.9 lakh

Who are its competitors?

The closest listed comparisons in its industry are HINDUSTAN UNILEVER LTD., ITC LTD, NESTLE INDIA LIMITED, BRITANNIA INDUSTRIES 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?Little sign of one

Returns on capital of 3.4% 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.

Peer median ROE51.0%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +83% while net margin moved -745% 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+83%

Margin effect-745%

DalalBaazaar Score

70/ 100

Good

Weighted across six categories. Every point is explained below.

✗ P/E of 89.1x is demanding — it needs sustained high growth to justify

Quality vs. Valuation

Company Quality

80/ 100

Excellent

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

Valuation

28/ 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

89.1x

Sector Median

43.3x

median of 4 sector peers

⚠️Against its sector it trades 106% above the peer median of 43.3x.

vs. its own history

Not enough price and earnings history

vs. sector peers

Expensive

43.3x median of 4 peers · +106%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

73.1x

PEG

—

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from -4.4% to 64.4% over 3 years.
Cash generation is improving
Free cash flow is up 381% over 3 years.
Return on equity is rising
ROE has improved from -0.3% to 3.4%.
Return on capital is rising
ROCE has improved from -0.3% to 3.4%.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

2 items require attention · 2 high

🔴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 738% against revenue up 83% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from -4.4% to 64.4%. 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?

Sales are being booked faster than collected
Receivables are up 738% against revenue up 83%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
A premium to the sector to defend
It trades 106% 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
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

1Revenue growth stays above 17% a year✓ 22.3% CAGR
Latest reported year was 40.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 62%✓ 64.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✓ ₹1 Cr
Profit that never becomes cash eventually stops being profit.
4ROCE stays above 8%✗ 3.4%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

6 / 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

4 good · 4 neutral · 3 weak

Market Cap

₹70 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

89.1x

Expensive

Expensive — verify against sector peers

P/B Ratio

3.32x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹0.07

Profitable

Profitable on a per-share basis

ROE

3.4%

Weak

Weak capital efficiency

ROCE

3.4%

Weak

Low return on total capital employed

Debt/Equity

Not available

No data

Source didn't return this field

Revenue Growth (YoY)

40.9%

Healthy

Healthy top-line growth

Profit Growth (YoY)

97.5%

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

₹1 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

35.9%

Good

Healthy core-business profitability

Net Margin

50.8%

Good

Strong bottom-line conversion

Current Ratio

19.46

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

-0.02

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

6.6 / 6.9

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

24.7

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1 Cr	₹1 Cr	₹1 Cr	₹1 Cr	+22.3%
EBITDA	-₹0 Cr	₹2 Cr	₹0 Cr	₹1 Cr	—
EBITDA Margin	-4.4%	272.9%	33.7%	64.4%	—
PAT (Net Profit)	-₹0 Cr	₹2 Cr	₹0 Cr	₹1 Cr	—
ROE	-0.3%	12.1%	1.0%	3.4%	—
ROCE	-0.3%	11.9%	1.1%	3.4%	—
Free Cash Flow	₹0 Cr	₹0 Cr	₹2 Cr	₹1 Cr	+68.8%

🟢 Revenue has grown at 22.3% a year over 3 years.

🟢 EBITDA has turned positive, from -₹0 Cr to ₹1 Cr.

🟢 EBITDA Margin has risen from -4.4% to 64.4% over 3 years (+68.8 pts).

🟢 PAT (Net Profit) has turned positive, from -₹0 Cr to ₹1 Cr.

🟢 ROE has risen from -0.3% to 3.4% over 3 years (+3.8 pts).

🟢 ROCE has risen from -0.3% to 3.4% over 3 years (+3.7 pts).

🟢 Free Cash Flow has grown at 68.8% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹21 Cr

Total Liabilities

₹1 Cr

Total Debt

—

Cash & Equivalents

₹1 Cr

Operating Cash Flow

₹1 Cr

Capex

-₹1 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

65.1%

Peer Comparison

Company	P/E	ROE
HINDUSTAN UNILEVER LTD.	42.5x	21.5%
ITC LTD	16.6x	27.4%
NESTLE INDIA LIMITED	59.8x	79.9%
BRITANNIA INDUSTRIES LTD	44.1x	51.0%

Recent News

1 mixed5 general

BITS Share Price Falls on Q1 Results

Univest, 27 JulPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

BITS Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 30 Aug

He missed IITs after 3 JEE attempts and BITS Pilani by 0.5%: 30 years later, man shares a lesson

The Economic Times, 04 Oct

BITS Ltd AGM: Auditors, MoA changes, KYC update request on agenda

scanx.trade, 04 Sept

KLAC vs. SNDK: Which Semiconductor Stock is a Better Buy Now?

TradingView, 27 Aug

From BITS Pilani To $1.2 Billion Net Worth: This Indian-Origin CEO Rode Micron’s 1000% Rally To Join The Bi

News18, 28 May

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.
1 metric couldn't be retrieved for this stock — this is more common for smaller or thinly-covered listings.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

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

1 of 4 tripwires tripped — ROCE stays above 8% · see Key things to watch ↑