DC Infotech and Communication Limited

Technology — Electronics & Computer Distribution · NSE

₹338.35+₹2.05 (+0.61%)

DalalBaazaar Score

52 / 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 modest growth. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 8:28 pm

Understanding the Business

Company site ↗

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

What does this company do?

DC Infotech and Communication Limited engages in the provision of networking and security solutions in India and internationally.

IndustryElectronics & Computer Distribution

SectorTechnology

Employees105

Annual revenue₹737 Cr

How does it make money?

Turns over ₹737 Cr a year. Of every ₹100 of sales, about ₹3 reaches shareholders as profit, with ₹5 left at the operating level before interest, tax and depreciation. Each of its 105 employees supports ₹7.02 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹7.02 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.

Compared side by side in Peers ↓

What is its competitive advantage?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 32.2%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 19.7% 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.

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 +105% while net margin moved +46% 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+105%

Margin effect+46%

DalalBaazaar Score

52/ 100

Moderate

Weighted across six categories. Every point is explained below.

• P/E of 25.4x already prices in growth
• P/E is close to its own historical median of 29.9x
✗ P/B of 5.05x is a steep premium to book

Quality vs. Valuation

Company Quality

55/ 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

25.4x

3Y Median

29.9x

40 monthly readings · mean 32.1x · range 22.9x–71.1x

Sector Median

16.5x

median of 4 sector peers

🟢Current valuation is approximately 15% below its 3y median of 29.9x. 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 53% above the peer median of 16.5x.

vs. its own history

Fair

29.9x median over 40 months · -15%

vs. sector peers

Expensive

16.5x median of 4 peers · +53%

vs. generic bands

Fair

15x–35x

EV/EBITDA

17.9x

PEG

0.57

What's Good / What's Bad

🟢 What's Going Well2

High return on capital employed
ROCE of 32.2% 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 Attention2

Return on equity is falling
ROE has dropped from 24.0% to 19.7% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 36.7% to 32.2% — often a sign of competition or overexpansion.

Red Flags

5 items require attention · 4 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 235% over 3 years, from ₹26 Cr to ₹87 Cr.
🔴Free cash flow negative for 4 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴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 196% against revenue up 105% — sales are being booked faster than they are collected.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 37% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 32.2% 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?

Sales are being booked faster than collected
Receivables are up 196% against revenue up 105%. 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 53% above the peer median. That premium needs a reason that persists, or it closes.
Returns on shareholder capital are falling
ROE has dropped from 24.0% to 19.7%. 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.
Several serious flags at once
4 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 20% a year✓ 27.0% CAGR
Latest reported year was 12.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 3%✓ 4.9%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA stays below 2x✗ 2.4x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4Free cash flow remains positive✗ -₹43 Cr
Profit that never becomes cash eventually stops being profit.
5ROCE stays above 29%✓ 32.2%
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

4 good · 5 neutral · 2 weak

Market Cap

₹555 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

25.4x

Fair

Fairly valued against the generic band

P/B Ratio

5.05x

Rich

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

EPS (TTM)

₹13.34

Profitable

Profitable on a per-share basis

ROE

19.7%

Strong

Strong capital efficiency

ROCE

32.2%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.81x

Moderate

Moderate leverage

Revenue Growth (YoY)

12.9%

Healthy

Healthy top-line growth

Profit Growth (YoY)

4.8%

Modest

Slow profit growth

Dividend Yield

0.03%

Modest

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

Free Cash Flow

-₹43 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

4.6%

Weak

Thin margins leave little room for error

Net Margin

2.9%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.38

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

-0.31

Defensive

Steadier than the market

52W Range Position

49%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

320.6 / 337.0

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

71.4

Overbought zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹360 Cr	₹460 Cr	₹556 Cr	₹737 Cr	+27.0%
EBITDA	₹12 Cr	₹20 Cr	₹26 Cr	₹36 Cr	+42.1%
EBITDA Margin	3.5%	4.4%	4.8%	4.9%	—
PAT (Net Profit)	₹7 Cr	₹12 Cr	₹14 Cr	₹21 Cr	+44.2%
EPS	₹5.9	₹9.39	₹9.3	₹13.48	+31.7%
ROE	24.0%	22.9%	20.1%	19.7%	—
ROCE	36.7%	38.6%	35.3%	32.2%	—
Total Debt	₹26 Cr	₹38 Cr	₹51 Cr	₹87 Cr	+49.7%
Free Cash Flow	-₹12 Cr	-₹9 Cr	-₹5 Cr	-₹43 Cr	—

🟢 Revenue has grown at 27.0% a year over 3 years.

🟢 EBITDA has grown at 42.1% a year over 3 years.

🟢 EBITDA Margin has risen from 3.5% to 4.9% over 3 years (+1.4 pts).

🟢 PAT (Net Profit) has grown at 44.2% a year over 3 years.

🟢 EPS has grown at 31.7% a year over 3 years.

🔴 ROE has fallen from 24.0% to 19.7% over 3 years (-4.3 pts).

🔴 ROCE has fallen from 36.7% to 32.2% over 3 years (-4.5 pts).

🔴 Total Debt has grown at 49.7% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹373 Cr

Total Liabilities

₹265 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹37 Cr

Capex

-₹6 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

76.9%

Corporate Actions

Dividend Rate

₹0.1

Ex-Dividend Date

11 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 mixed4 general

DC Infotech & Communication Ltd (DCI) Share Price

Business Today, 14 Oct

DC Infotech and Communication (DCI.NS) Climbs 2.76% to ₹339 — Support and Resistance Levels in Focus - MA Crossover

https://www.siam.in/, 14 Oct

DC Infotech and Communication's (NSE:DCI) Earnings Aren't As Good As They Appear

Simply Wall Street, 08 JunResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

DCI Share Price Rise: Fundamentals, Peers and Market Cap

Univest, 26 AugPrice 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.

DC Infotech & Communication Ltd is Rated Hold

MarketsMojo, 14 Oct

DC Infotech and Communication Ltd. Key Financial Ratios – Valuation, Profitability & More

Value Research, 30 Aug

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in overbought territory — momentum entries here carry more short-term pullback risk.

DalalBaazaar Thesis

StrongGrowth

MiddlingBusiness Quality · Financial Health · Profitability

WeakValuation · Risk

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

2 of 5 tripwires tripped — Debt / EBITDA stays below 2x; Free cash flow remains positive · see Key things to watch ↑