Centum Electronics Limited

Technology — Electronic Components · NSE

₹3,981.50+₹0.50 (+0.01%)

DalalBaazaar Score

55 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Moderate

Driven by small-cap size, which brings sharper price swings, 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, but sales are shrinking. Valuation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:02 pm

Understanding the Business

Company site ↗

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

What does this company do?

Centum Electronics Limited designs, manufactures, and exports electronic products In Europe, Middle East, Asia, and North America.

IndustryElectronic Components

SectorTechnology

Employees1,513

Annual revenue₹950 Cr

How does it make money?

Turns over ₹950 Cr a year. Of every ₹100 of sales, about ₹-5 reaches shareholders as profit, with ₹15 left at the operating level before interest, tax and depreciation. Each of its 1,513 employees supports ₹62.8 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹62.8 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 37.9% 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 is the outlook?

3 analysts covering the stock expect revenue to grow about 28.2% and earnings to grow about 36.1% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+28.2%

Est. earnings growth+36.1%

Analysts3

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +7% while net margin moved -542% 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+7%

Margin effect-542%

DalalBaazaar Score

55/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Return on equity is negative
✗ ROE has fallen by 18.3 points over the period

Quality vs. Valuation

Company Quality

57/ 100

Average

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

Valuation

42/ 100

Expensive

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

366.3x

3Y Median

1266.7x

40 monthly readings · mean 1143.6x · range 178.7x–2552.1x

Sector Median

16.5x

median of 4 sector peers

🟢Current valuation is approximately 71% below its 3y median of 1266.7x. 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 2113% above the peer median of 16.5x.

vs. its own history

Cheap

1266.7x median over 40 months · -71%

vs. sector peers

Expensive

16.5x median of 4 peers · +2113%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

41.1x

PEG

—

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 8.4% to 15.3% over 3 years.
Debt is being paid down
Total debt is down 60% over 3 years.
Return on capital is rising
ROCE has improved from 9.2% to 37.9%.
High return on capital employed
ROCE of 37.9% is the mark of a business that converts capital into profit efficiently.

🔴 What Needs Attention1

Return on equity is falling
ROE has dropped from 4.7% to -13.6% — each rupee of shareholder capital earns less than it did.

Red Flags

2 items require attention · 2 high

🔴The company is lossmakingFinancial
Net profit of -₹47 Cr in the latest reported year.
🔴Inventory building faster than salesFinancial
Inventory up 75% against revenue up 7% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 37.9% 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 8.4% to 15.3%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Deleveraging frees up earnings
Debt is down 60% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Priced below its own history
The stock trades 71% 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.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹20 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?

A premium to the sector to defend
It trades 2113% above the peer median. That premium needs a reason that persists, or it closes.
Growth barely outpaces inflation
Revenue compounding at 2.4% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
Returns on shareholder capital are falling
ROE has dropped from 4.7% to -13.6%. 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
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.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 13%✓ 15.3%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Revenue growth stays above 4% a year✗ 2.4% CAGR
Latest reported year was -25.3%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
3Free cash flow remains positive✓ ₹20 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.8x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 35%✓ 37.9%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

8 / 12 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
✓ Analyst consensus isn't majority-sell
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

5 good · 2 neutral · 4 weak

Market Cap

₹5,877 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

366.3x

Expensive

Expensive — verify against sector peers

P/B Ratio

17.10x

Rich

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

EPS (TTM)

₹10.87

Profitable

Profitable on a per-share basis

ROE

-13.6%

Weak

Weak capital efficiency

ROCE

37.9%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.38x

Low

Conservative leverage

Revenue Growth (YoY)

-25.3%

Shrinking

Sales are contracting

Profit Growth (YoY)

1718.6%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.13%

Modest

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

Free Cash Flow

₹20 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

40.1x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

9.2%

Average

Average margins

Net Margin

5.6%

Average

Average bottom-line conversion

Current Ratio

1.16

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.09

Defensive

Steadier than the market

52W Range Position

66%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

4468.6 / 4031.9

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

29.4

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹884 Cr	₹1,048 Cr	₹738 Cr	₹950 Cr	+2.4%
EBITDA	₹74 Cr	₹85 Cr	₹98 Cr	₹145 Cr	+25.1%
EBITDA Margin	8.4%	8.1%	13.2%	15.3%	—
PAT (Net Profit)	₹10 Cr	₹2 Cr	₹2 Cr	-₹47 Cr	—
EPS	₹7.55	₹1.36	₹1.88	₹-31.62	—
ROE	4.7%	0.9%	0.6%	-13.6%	—
ROCE	9.2%	9.5%	17.8%	37.9%	—
Total Debt	₹306 Cr	₹240 Cr	₹185 Cr	₹123 Cr	-26.2%
Free Cash Flow	₹49 Cr	₹169 Cr	-₹48 Cr	₹20 Cr	-25.9%

🟢 Revenue has grown at 2.4% a year over 3 years.

🟢 EBITDA has grown at 25.1% a year over 3 years.

🟢 EBITDA Margin has risen from 8.4% to 15.3% over 3 years (+6.9 pts).

🔴 PAT (Net Profit) has turned negative, from ₹10 Cr to -₹47 Cr.

🔴 EPS has turned negative, from ₹7.55 to ₹-31.62.

🔴 ROE has fallen from 4.7% to -13.6% over 3 years (-18.3 pts).

🟢 ROCE has risen from 9.2% to 37.9% over 3 years (+28.7 pts).

🟢 Total Debt has shrunk at 26.2% a year over 3 years.

🔴 Free Cash Flow has shrunk at 25.9% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1,303 Cr

Total Liabilities

₹978 Cr

Cash & Equivalents

₹37 Cr

Operating Cash Flow

₹60 Cr

Capex

-₹40 Cr

Shareholding (proxy)

Institutional Holding

20.7%

Insider Holding

49.9%

Corporate Actions

Dividend Rate

₹5

Ex-Dividend Date

31 Jul 2026

Analyst Consensus

Recommendations

3 Buy · 0 Hold · 0 Sell

Target Price (Mean)

₹5,258.33

+32.1% vs CMP

Target Range

₹3,875 – ₹6,000

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 positive1 mixed4 general

Centum Electronics Ltd (CENTUM) Share Price

Business Today, 16 Oct

Centum Electronics Ltd. Share Price update after 5.35% rise

Univest, 29 Sept

Be Sure To Check Out Centum Electronics Limited (NSE:CENTUM) Before It Goes Ex-Dividend

Simply Wall Street, 27 JulCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Centum Electronics: Why a Rs 52-crore loss hasn’t derailed the rally

The Indian Express, 26 Jun

DAM Capital initiates 'Buy' on Centum Electronics with ₹6,000 target price

CNBC TV18, 23 SeptAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

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

The Economic Times, 03 Aug

Watch Items

Revenue growth is negative (-25.3%) on the latest reported period — check if this is one-off or a trend.
Cross-check against the company's latest quarterly filing / investor presentation before acting.
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

MiddlingRisk

WeakGrowth · Profitability · Valuation

Points for each in the Score ↑

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

1 of 5 tripwires tripped — Revenue growth stays above 4% a year · see Key things to watch ↑