Creative Newtech Limited

Technology — Electronics & Computer Distribution · NSE

₹1,175.10+₹20.30 (+1.76%)

DalalBaazaar Score

58 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

High

Driven by moderate debt load, negative free cash flow, micro-cap size, which brings thin liquidity.

In simple words: Strong business and financial position, with both sales and profits growing well. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:08 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 Creative Newtech Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Creative Newtech Limited distributes information technology (IT), gaming, imaging, and lifestyle products in India and internationally. It operates through the Brand Business and Market Entry Specialist segments.

IndustryElectronics & Computer Distribution

SectorTechnology

Employees355

Annual revenue₹2,700 Cr

How does it make money?

Turns over ₹2,700 Cr a year. Of every ₹100 of sales, about ₹2 reaches shareholders as profit, with ₹4 left at the operating level before interest, tax and depreciation. Each of its 355 employees supports ₹7.60 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin3.7%

Net margin2.3%

Revenue / employee₹7.60 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?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 25.5%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 17.0% against a peer median of 32.0% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

ROCE25.5%

ROE17.0%

Peer median ROE32.0%

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +94% while net margin moved +30% 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+94%

Margin effect+30%

DalalBaazaar Score

58/ 100

Moderate

Weighted across six categories. Every point is explained below.

• P/E of 27.1x already prices in growth
• P/E is close to its own historical median of 27.0x
✗ P/B of 5.35x is a steep premium to book

Quality vs. Valuation

Company Quality

63/ 100

Average

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

Valuation

50/ 100

Fair

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

27.1x

3Y Median

27.0x

40 monthly readings · mean 27.7x · range 16.4x–42.5x

Sector Median

16.5x

median of 4 sector peers

🟡Currently trading close to its 3y median of 27.0x — the market is paying about what it usually pays for this company.

⚠️Against its sector it trades 64% above the peer median of 16.5x.

vs. its own history

Fair

27.0x median over 40 months · +0%

vs. sector peers

Expensive

16.5x median of 4 peers · +64%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

27.1x

P/B

5.35x

EV/EBITDA

20.7x

PEG

0.75

Dividend Yield

0.04%

What's Good / What's Bad

🟢 What's Going Well2

High return on capital employed
ROCE of 25.5% is the mark of a business that converts capital into profit efficiently.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention5

Debt is rising
Total debt is up 265% over 3 years — worth checking what it funded.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Return on equity is falling
ROE has dropped from 20.9% to 17.0% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 30.7% to 25.5% — often a sign of competition or overexpansion.
Receivables growing faster than sales
Receivables are up 513% against revenue growth of 94% — customers are taking longer to pay.

Red Flags

5 items require attention · 3 high · 2 watch

🔴Debt has risen sharplyFinancial
Total debt is up 265% over 3 years, from ₹89 Cr to ₹324 Cr.
🔴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 513% against revenue up 94% — sales are being booked faster than they are collected.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 8.8x to 5.7x.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹275 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 25.5% 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.
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 3.2x 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 513% against revenue up 94%. 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 64% above the peer median. That premium needs a reason that persists, or it closes.
Returns on shareholder capital are falling
ROE has dropped from 20.9% to 17.0%. 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.
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 19% a year✓ 24.7% CAGR
Latest reported year was 20.8%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 2%✓ 3.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA falls below 3x✗ 3.2x
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✗ -₹275 Cr
Profit that never becomes cash eventually stops being profit.
5ROCE stays above 23%✓ 25.5%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

8 / 11 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
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

5 good · 4 neutral · 2 weak

Market Cap

₹1,765 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

27.1x

Fair

Fairly valued against the generic band

P/B Ratio

5.35x

Rich

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

EPS (TTM)

₹43.34

Profitable

Profitable on a per-share basis

ROE

17.0%

Strong

Strong capital efficiency

ROCE

25.5%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.84x

Moderate

Moderate leverage

Revenue Growth (YoY)

20.8%

Healthy

Healthy top-line growth

Profit Growth (YoY)

39.0%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.04%

Modest

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

Free Cash Flow

-₹275 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹1,175.1

Operating Margin

5.0%

Weak

Thin margins leave little room for error

Net Margin

2.6%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.68

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.62

Defensive

Steadier than the market

52W Range Position

81%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

1098.8 / 1150.2

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

65.4

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1,393 Cr	₹1,713 Cr	₹1,774 Cr	₹2,700 Cr	+24.7%
EBITDA	₹43 Cr	₹57 Cr	₹71 Cr	₹101 Cr	+32.4%
EBITDA Margin	3.1%	3.3%	4.0%	3.7%	—
PAT (Net Profit)	₹25 Cr	₹44 Cr	₹46 Cr	₹62 Cr	+36.0%
EPS	₹19.53	₹31.85	₹32.18	₹41.04	+28.1%
ROE	20.9%	20.4%	15.7%	17.0%	—
ROCE	30.7%	28.2%	22.2%	25.5%	—
Total Debt	₹89 Cr	₹74 Cr	₹72 Cr	₹324 Cr	+53.9%
Free Cash Flow	-₹22 Cr	-₹29 Cr	₹19 Cr	-₹275 Cr	—

🟢 Revenue has grown at 24.7% a year over 3 years.

🟢 EBITDA has grown at 32.4% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 3.7% over 3 years.

🟢 PAT (Net Profit) has grown at 36.0% a year over 3 years.

🟢 EPS has grown at 28.1% a year over 3 years.

🔴 ROE has fallen from 20.9% to 17.0% over 3 years (-3.9 pts).

🔴 ROCE has fallen from 30.7% to 25.5% over 3 years (-5.2 pts).

🔴 Total Debt has grown at 53.9% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹937 Cr

Total Liabilities

₹550 Cr

Total Debt

₹324 Cr

Cash & Equivalents

₹5 Cr

Operating Cash Flow

-₹272 Cr

Capex

-₹3 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

70.2%

Corporate Actions

Dividend Rate

₹0.5

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

2 positive1 mixed3 general

Creative Newtech FY26 PAT Rises 34% to Rs 34.35 Cr

scanx.trade, 14 Oct

Creative Newtech Share Price Jumps 15% On Monday Despite Weak Market Sentiment; Here's Why

Dalal Street Investment Journal, 08 JunPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Volume Gainers at 4:00 PM IST, July 9: Creative Newtech, D.B. Corp Lead

HDFC Sky, 09 Jul

Creative Newtech | Stock Share Price Live

MarketSmith India, 14 May

Creative Newtech Secures ₹3,195 Crore BSNL BharatNet Order for Odisha Middle Mile Project

Sahi, 08 JunOrder win

🟢Potentially positiveAn order or contract win, which adds to future revenue. How much depends on its size against annual sales and on when it is executed.

Creative Newtech fixes Sep 23 record date for FY26 final dividend of Re 0.50

scanx.trade, 14 OctCapital return

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

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🟡Business QualityAdequate9.6/20

🟡Financial HealthAdequate12/20

🟢GrowthStrong18.5/20

🟡ProfitabilityModerate7.3/15

🔴ValuationDemanding6.5/15

🔴RiskHigh4.4/10

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 19% a year24.7% CAGR
✓EBITDA margin holds above 2%3.7%
✗Debt / EBITDA falls below 3x3.2x
✗Free cash flow remains positive-₹275 Cr
✓ROCE stays above 23%25.5%