Crayons Advertising Limited

Sector n/a · NSE

₹124.00+₹0.05 (+0.04%)

DalalBaazaar Score

55 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Moderate

Driven by negative free cash flow, micro-cap size, which brings thin liquidity, falling profits.

In simple words: The business is earning a fairly low return on the money invested in it, though profits are falling even as sales grow. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:09 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

The 60-second version of Crayons Advertising 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 ₹313 Cr a year. Of every ₹100 of sales, about ₹1 reaches shareholders as profit, with ₹4 left at the operating level before interest, tax and depreciation.

EBITDA margin4.1%

Net margin1.2%

What is its competitive advantage?Little sign of one

Returns on capital of 5.4% 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.

ROCE5.4%

ROE3.1%

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +63% while net margin moved +44% 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+63%

Margin effect+44%

DalalBaazaar Score

55/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

60/ 100

Average

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

Valuation

35/ 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.

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

P/E (Trailing)

—

P/B

—

EV/EBITDA

24.1x

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well2

Very low debt
Debt/Equity of 0.12x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention4

Debt is rising
Total debt is up 51% 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 capital is falling
ROCE has declined from 8.1% to 5.4% — often a sign of competition or overexpansion.
Receivables growing faster than sales
Receivables are up 90% against revenue growth of 63% — customers are taking longer to pay.

Red Flags

3 items require attention · 2 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 51% over 3 years, from ₹10 Cr to ₹15 Cr.
🔴Free cash flow negative for 3 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🟡Receivables growing faster than salesFinancial
Receivables up 90% against revenue up 63% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

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?

Sales are being booked faster than collected
Receivables are up 90% against revenue up 63%. 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
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 13% a year✓ 17.6% CAGR
Latest reported year was 33.8%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 2%✓ 4.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹11 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.1x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 8%✗ 5.4%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

3 / 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

2 good · 5 neutral · 4 weak

Market Cap

₹303 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

3.1%

Weak

Weak capital efficiency

ROCE

5.4%

Weak

Low return on total capital employed

Debt/Equity

0.12x

Low

Conservative leverage

Revenue Growth (YoY)

33.8%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-65.6%

Falling

Profits are shrinking

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹11 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹124

Gross Margin

14.3%

Proxy

Operating margin unavailable — showing gross margin instead

Net Margin

1.2%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.83

Comfortable

Healthy short-term liquidity

Technical Snapshot

SMA 20 / SMA 50

24.6 / 25.3

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

59.2

Neutral momentum

Financial Trend (4-Year)

Metric	FY22	FY24	FY25	FY26	3Y CAGR
Revenue	₹193 Cr	₹234 Cr	₹234 Cr	₹313 Cr	+17.6%
EBITDA	₹7 Cr	₹27 Cr	₹15 Cr	₹13 Cr	+21.9%
EBITDA Margin	3.6%	11.6%	6.5%	4.1%	—
PAT (Net Profit)	₹2 Cr	₹18 Cr	₹11 Cr	₹4 Cr	+32.7%
EPS	₹0.66	₹7.49	₹4.39	—	—
ROE	4.3%	16.5%	9.4%	3.1%	—
ROCE	8.1%	21.5%	8.9%	5.4%	—
Total Debt	₹10 Cr	₹5 Cr	₹5 Cr	₹15 Cr	+14.9%
Free Cash Flow	₹10 Cr	-₹27 Cr	-₹1 Cr	-₹11 Cr	—

🟢 Revenue has grown at 17.6% a year over 3 years.

🟢 EBITDA has grown at 21.9% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 4.1% over 3 years.

🟢 PAT (Net Profit) has grown at 32.7% a year over 3 years.

🔴 ROE has fallen from 4.3% to 3.1% over 3 years (-1.2 pts).

🔴 ROCE has fallen from 8.1% to 5.4% over 3 years (-2.7 pts).

🔴 Total Debt has grown at 14.9% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹10 Cr to -₹11 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹235 Cr

Total Liabilities

₹110 Cr

Total Debt

₹15 Cr

Cash & Equivalents

₹11 Cr

Operating Cash Flow

-₹5 Cr

Capex

-₹7 Cr

Recent News

1 positive1 mixed4 general

Crayons Advertising FY26 revenue rises 33.8% to ₹31,304.78 lakh

scanx.trade, 30 JunResults

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

ROBOKIDZ EDUVENTURES LTD. Stock/Share price , NSE/BSE Forecast News and Live Quotes

Equitymaster, 14 Oct

Crayons Advertising Ltd Key Financial Ratios – Valuation, Profitability & More

Value Research, 31 Aug

Century Business Media (BSE:544928) - Stock Analysis

Simply Wall Street, 19 Sept

YAAP DIGITAL LIMITED Share Price Fall and Stock Analysis

Univest, 17 AugPrice 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.

Crayons Advertising Ltd Peer Comparison – Compare with Others

Value Research, 31 Aug

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.

DalalBaazaar Thesis

🔴Business QualityWeak7.5/20

🟢Financial HealthStrong14.5/20

🟢GrowthStrong18.5/20

🔴ProfitabilityWeak4.5/15

🟡ValuationFair7.5/15

🔴RiskHigh2.5/10

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

This thesis breaks if

✓Revenue growth stays above 13% a year17.6% CAGR
✓EBITDA margin holds above 2%4.1%
✗Free cash flow remains positive-₹11 Cr
✓Debt / EBITDA stays below 2x1.1x
✗ROCE stays above 8%5.4%