DEN Networks Limited

Communication Services — Entertainment · NSE

₹26.30+₹0.24 (+0.92%)

DalalBaazaar Score

58 / 100

🟡 Moderate

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, but sales are shrinking. Whether sales start growing again is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:59 pm

Understanding the Business

Company site ↗

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

What does this company do?

DEN Networks Limited, a media and entertainment company, engages in the distribution of television channels to households through a digital cable distribution network in India. The company operates through two segments: Cable and Broadband.

IndustryEntertainment

SectorCommunication Services

Annual revenue₹966 Cr

How does it make money?

Turns over ₹966 Cr a year. Of every ₹100 of sales, about ₹17 reaches shareholders as profit, with ₹22 left at the operating level before interest, tax and depreciation.

Who are its competitors?

The closest listed comparisons in its industry are BHARTI AIRTEL LIMITED, VODAFONE IDEA LIMITED. 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?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.

Peer median ROE20.2%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -13% while net margin moved -22% 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-13%

Margin effect-22%

DalalBaazaar Score

58/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 4.4% a year
✗ Profit has declined at 12.0% a year

Quality vs. Valuation

Company Quality

53/ 100

Average

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

Valuation

70/ 100

Cheap

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

8.4x

3Y Median

8.3x

40 monthly readings · mean 8.7x · range 5.5x–12.0x

Sector Median

21.7x

median of 2 sector peers

🟡Currently trading close to its 3y median of 8.3x — the market is paying about what it usually pays for this company.

🟢Against its sector it trades 61% below the peer median of 21.7x.

vs. its own history

Fair

8.3x median over 40 months · +0%

vs. sector peers

Cheap

21.7x median of 2 peers · -61%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

5.8x

PEG

3.10

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 19.3% to 22.2% over 3 years.
Debt is being paid down
Total debt is down 27% over 3 years.
Very low debt
Debt/Equity of 0.30x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Return on equity is falling
ROE has dropped from 7.6% to 4.4% — each rupee of shareholder capital earns less than it did.

Red Flags

3 items require attention · 3 watch

🟡Free cash flow is negativeFinancial
Free cash flow was -₹58 Cr in the latest year.
🟡Profit is decliningFinancial
Net profit is down 32% over 3 years.
🟡Receivables growing faster than salesFinancial
Receivables up 24% against revenue up -13% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 19.3% to 22.2%. 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 27% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Cheaper than its peers
It trades 61% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
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 24% against revenue up -13%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Returns on shareholder capital are falling
ROE has dropped from 7.6% to 4.4%. 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

1EBITDA margin holds above 20%✓ 22.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹58 Cr
Profit that never becomes cash eventually stops being profit.
3Debt / EBITDA stays below 2x✓ 0.1x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4ROCE stays above 8%✗ 5.4%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Valuation vs its own median of 8.3x✓ 8.4x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

7 / 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 · 3 neutral · 3 weak

Market Cap

₹1,254 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

8.4x

Cheap

Cheap against the generic band

P/B Ratio

0.33x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹3.14

Profitable

Profitable on a per-share basis

ROE

3.9%

Weak

Weak capital efficiency

ROCE

5.4%

Weak

Low return on total capital employed

Debt/Equity

0.30x

Low

Conservative leverage

Revenue Growth (YoY)

-3.7%

Shrinking

Sales are contracting

Profit Growth (YoY)

2.7%

Modest

Slow profit growth

Dividend Yield

None

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

Free Cash Flow

₹43 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

-25.0x

Improving

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

ROA

-0.4%

Weak

Assets generate little profit

Operating Margin

-3.7%

Weak

Thin margins leave little room for error

Net Margin

15.5%

Good

Strong bottom-line conversion

Current Ratio

7.01

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.63

Defensive

Steadier than the market

52W Range Position

32%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

26.1 / 27.0

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

48.4

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1,104 Cr	₹1,081 Cr	₹993 Cr	₹966 Cr	-4.4%
EBITDA	₹213 Cr	₹229 Cr	₹197 Cr	₹214 Cr	+0.3%
EBITDA Margin	19.3%	21.2%	19.9%	22.2%	—
PAT (Net Profit)	₹243 Cr	₹215 Cr	₹200 Cr	₹166 Cr	-12.0%
EPS	₹5.09	₹4.5	₹4.2	₹3.48	-11.9%
ROE	7.6%	6.3%	5.5%	4.4%	—
ROCE	4.3%	7.0%	6.8%	5.4%	—
Total Debt	₹28 Cr	₹26 Cr	₹23 Cr	₹20 Cr	-10.1%
Free Cash Flow	₹40 Cr	₹30 Cr	-₹23 Cr	-₹58 Cr	—

🔴 Revenue has shrunk at 4.4% a year over 3 years.

🟡 EBITDA has been broadly flat over 3 years (0.3% a year).

🟢 EBITDA Margin has risen from 19.3% to 22.2% over 3 years (+2.9 pts).

🔴 PAT (Net Profit) has shrunk at 12.0% a year over 3 years.

🔴 EPS has shrunk at 11.9% a year over 3 years.

🔴 ROE has fallen from 7.6% to 4.4% over 3 years (-3.2 pts).

🟢 ROCE has risen from 4.3% to 5.4% over 3 years (+1.1 pts).

🟢 Total Debt has shrunk at 10.1% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹40 Cr to -₹58 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹4,283 Cr

Total Liabilities

₹457 Cr

Cash & Equivalents

₹20 Cr

Operating Cash Flow

-₹17 Cr

Capex

-₹41 Cr

Shareholding (proxy)

Institutional Holding

0.1%

Insider Holding

74.9%

Peer Comparison

Company	P/E	ROE
BHARTI AIRTEL LIMITED	39.8x	20.2%
VODAFONE IDEA LIMITED	3.6x	—

Recent News

1 positive2 mixed3 general

Den Networks Share Price

Upstox, 16 Oct

Den Networks Q2 Profit Up 4.5% to ₹36.77 Crore

HDFC Sky, 14 OctResults

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

Buzzing Stocks: Hero Motors, Tata Elxsi jump 5–8% after Q2 earnings; Den Networks, Bank of Baroda fall

Moneycontrol.com, 14 OctResults

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

DEN Networks' (NSE:DEN) Problems Go Beyond Weak Profit

Simply Wall Street, 22 Apr

Den Networks promoters confirm no share encumbrance in FY26

scanx.trade, 16 Jun

Den Networks Share Price Target 2027 to 2030: Analyst Outlook

Univest, 17 AugAnalyst view

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

Watch Items

Revenue growth is negative (-3.7%) 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.

DalalBaazaar Thesis

StrongBusiness Quality · Financial Health · Valuation

MiddlingProfitability · Risk

WeakGrowth

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 of 5 tripwires tripped — Free cash flow remains positive; ROCE stays above 8% · see Key things to watch ↑