Cadsys (India) Limited

Sector n/a · NSE

₹200.00−₹2.00 (−0.99%)

DalalBaazaar Score

34 / 100

🔴 Weak

Verdict

CAUTION

Risk

Low

Driven by 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 both sales and profits growing well. Thin profit margins are the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 8:28 pm

Understanding the Business

The 60-second version of Cadsys (India) 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 ₹115 Cr a year. Of every ₹100 of sales, about ₹-16 reaches shareholders as profit, with ₹-12 left at the operating level before interest, tax and depreciation.

What is its competitive advantage?Little sign of one

Returns on capital of -39.8% 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.

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -34% while net margin moved -698% 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-34%

Margin effect-698%

DalalBaazaar Score

34/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 12.9% a year

Quality vs. Valuation

Company Quality

33/ 100

Weak

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

Valuation

—/ 100

Unknown

What you are being asked to pay, ignoring how good the business is.

Not enough data to separate business quality from valuation for this company.

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

—

PEG

—

What's Good / What's Bad

🟢 What's Going Well3

Debt is being paid down
Total debt is down 91% over 3 years.
Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
Very low debt
Debt/Equity of 0.21x leaves the balance sheet with plenty of headroom.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 9.3% to -53.1% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 7.8% to -39.8% — often a sign of competition or overexpansion.

Red Flags

5 items require attention · 3 high · 2 watch

🔴Thin interest coverageFinancial
Operating profit covers interest only -9.9x — little room if earnings dip.
🔴The company is lossmakingFinancial
Net profit of -₹18 Cr in the latest reported year.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 21.3 points, from 9.6% to -11.7%.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from -8.8x to -9.9x.
🟡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?

Deleveraging frees up earnings
Debt is down 91% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹97 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 9.6% to -11.7%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Returns on shareholder capital are falling
ROE has dropped from 9.3% to -53.1%. 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.
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

1EBITDA margin holds above -14%✓ -11.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Interest cover stays above 3x✗ -9.9x
How much operating profit can fall before interest stops being comfortably covered.
3Free cash flow remains positive✓ ₹97 Cr
Profit that never becomes cash eventually stops being profit.
4ROCE stays above 8%✗ -39.8%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

5 / 9 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
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

4 good · 5 neutral · 2 weak

Market Cap

₹200 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)

Not available

No data

Source didn't return this field

ROE

-53.1%

Weak

Weak capital efficiency

ROCE

-39.8%

Weak

Low return on total capital employed

Debt/Equity

0.21x

Low

Conservative leverage

Revenue Growth (YoY)

14.6%

Healthy

Healthy top-line growth

Profit Growth (YoY)

50.1%

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

₹97 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Gross Margin

12.7%

Proxy

Operating margin unavailable — showing gross margin instead

Net Margin

-16.1%

Weak

Very little revenue reaches the bottom line

Current Ratio

5.12

Comfortable

Healthy short-term liquidity

Technical Snapshot

SMA 20 / SMA 50

40.4 / 45.5

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

0.0

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹174 Cr	₹215 Cr	₹100 Cr	₹115 Cr	-12.9%
EBITDA	₹17 Cr	₹28 Cr	-₹25 Cr	-₹13 Cr	—
EBITDA Margin	9.6%	13.2%	-25.0%	-11.7%	—
PAT (Net Profit)	₹5 Cr	₹8 Cr	-₹37 Cr	-₹18 Cr	—
EPS	₹6.25	₹10.73	₹-37.04	—	—
ROE	9.3%	14.1%	-118.6%	-53.1%	—
ROCE	7.8%	14.2%	-45.0%	-39.8%	—
Total Debt	₹81 Cr	₹84 Cr	₹112 Cr	₹7 Cr	-55.1%
Free Cash Flow	-₹57 Cr	-₹41 Cr	-₹21 Cr	₹97 Cr	—

🔴 Revenue has shrunk at 12.9% a year over 3 years.

🔴 EBITDA has turned negative, from ₹17 Cr to -₹13 Cr.

🔴 EBITDA Margin has fallen from 9.6% to -11.7% over 3 years (-21.3 pts).

🔴 PAT (Net Profit) has turned negative, from ₹5 Cr to -₹18 Cr.

🔴 ROE has fallen from 9.3% to -53.1% over 3 years (-62.4 pts).

🔴 ROCE has fallen from 7.8% to -39.8% over 3 years (-47.6 pts).

🟢 Total Debt has shrunk at 55.1% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹57 Cr to ₹97 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹76 Cr

Total Liabilities

₹25 Cr

Cash & Equivalents

₹3 Cr

Operating Cash Flow

₹97 Cr

Capex

—

Recent News

6 general

Cadsys India Ltd. Key Financial Ratios – Valuation, Profitability & More

Value Research, 27 Aug

Cadsys India Ltd. Financials – Balance Sheet, Profit & Loss, Cash Flow

Value Research, 01 Sept

SHIPWAVES Stock Price and Chart — BSE:SHIPWAVES

TradingView, 17 Dec

Cadsys (India) (NSEI:CADSYS) - Stock Analysis

Simply Wall Street, 29 Sept

Cadsys (India) | Stock Share Price Live

MarketSmith India, 15 Oct

Over 100 stocks hit upper circuits despite market crash; do you own any?

Business Standard, 30 Sept

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.
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

StrongFinancial Health

MiddlingValuation

WeakBusiness Quality · Growth · Profitability · Risk

Points for each in the Score ↑

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation. 3 high-severity red flags sit above this conclusion and should be read first.

2 of 4 tripwires tripped — Interest cover stays above 3x; ROCE stays above 8% · see Key things to watch ↑