GNG Electronics Limited

Technology — Computer Hardware · NSE

₹708.00+₹15.75 (+2.28%)

DalalBaazaar Score

52 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

Driven by negative free cash flow, small-cap size, which brings sharper price swings, a very high earnings multiple, which leaves little margin for disappointment.

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, 7:00 pm

Understanding the Business

Company site ↗

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

What does this company do?

GNG Electronics Limited refurbishes, repairs, and sells laptops and desktops through its Electronics Bazaar brand in India and internationally. The company offers tablets, servers, premium smartphones, mobile workstations, and accessories.

IndustryComputer Hardware

SectorTechnology

Employees1,361

Annual revenue₹1,891 Cr

How does it make money?

Turns over ₹1,891 Cr a year. Of every ₹100 of sales, about ₹7 reaches shareholders as profit, with ₹11 left at the operating level before interest, tax and depreciation. Each of its 1,361 employees supports ₹1.39 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.39 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 23.8%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 17.4% 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 is the outlook?

3 analysts covering the stock expect revenue to grow about 27.1% and earnings to grow about 38.5% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+27.1%

Est. earnings growth+38.5%

Analysts3

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 +193% while net margin moved +39% 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+193%

Margin effect+39%

DalalBaazaar Score

52/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Small Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast
✗ Trading within 10% of its 52-week high — entries here carry more pullback risk
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

58/ 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

57.3x

1.4Y Median

58.3x

17 monthly readings · mean 62.9x · range 41.5x–103.6x

Sector Median

16.5x

median of 4 sector peers

🟡Currently trading close to its 1.4y median of 58.3x — the market is paying about what it usually pays for this company.

⚠️Against its sector it trades 246% above the peer median of 16.5x.

vs. its own history

Fair

58.3x median over 17 months · -2%

vs. sector peers

Expensive

16.5x median of 4 peers · +246%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

42.5x

PEG

0.96

What's Good / What's Bad

🟢 What's Going Well3

Margins are improving
EBITDA margin is up from 7.3% to 10.5% over 3 years.
High return on capital employed
ROCE of 23.8% 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 29.0% to 17.4% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 33.6% to 23.8% — often a sign of competition or overexpansion.

Red Flags

4 items require attention · 3 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 177% over 3 years, from ₹160 Cr to ₹445 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.
🔴Inventory building faster than salesFinancial
Inventory up 450% against revenue up 193% — stock may not be moving.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹238 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 23.8% 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 7.3% to 10.5%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
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?

A premium to the sector to defend
It trades 246% above the peer median. That premium needs a reason that persists, or it closes.
Returns on shareholder capital are falling
ROE has dropped from 29.0% to 17.4%. 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.
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.
Several serious flags at once
3 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 32% a year✓ 43.1% CAGR
Latest reported year was 32.1%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 9%✓ 10.5%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA stays below 2x✗ 2.2x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4Free cash flow remains positive✗ -₹238 Cr
Profit that never becomes cash eventually stops being profit.
5ROCE stays above 21%✓ 23.8%
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

6 good · 2 neutral · 3 weak

Market Cap

₹8,072 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

57.3x

Expensive

Expensive — verify against sector peers

P/B Ratio

10.64x

Rich

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

EPS (TTM)

₹12.36

Profitable

Profitable on a per-share basis

ROE

17.4%

Strong

Strong capital efficiency

ROCE

23.8%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.59x

Low

Conservative leverage

Revenue Growth (YoY)

32.1%

Healthy

Healthy top-line growth

Profit Growth (YoY)

25.1%

Healthy

Profits growing at a healthy clip

Dividend Yield

None

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

Free Cash Flow

-₹238 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

29.5x

Improving

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

Operating Margin

11.2%

Average

Average margins

Net Margin

7.2%

Average

Average bottom-line conversion

Current Ratio

2.51

Comfortable

Healthy short-term liquidity

52W Range Position

94%

Near high

Near its 52-week high

Technical Snapshot

SMA 20 / SMA 50

695.0 / 643.6

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

58.0

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹645 Cr	₹1,128 Cr	₹1,411 Cr	₹1,891 Cr	+43.1%
EBITDA	₹47 Cr	₹80 Cr	₹124 Cr	₹199 Cr	+61.7%
EBITDA Margin	7.3%	7.1%	8.8%	10.5%	—
PAT (Net Profit)	₹32 Cr	₹52 Cr	₹69 Cr	₹132 Cr	+59.7%
EPS	₹2.84	₹4.57	₹6.04	₹12.14	+62.4%
ROE	29.0%	32.0%	30.4%	17.4%	—
ROCE	33.6%	42.3%	37.6%	23.8%	—
Total Debt	₹160 Cr	₹332 Cr	₹454 Cr	₹445 Cr	+40.5%
Free Cash Flow	₹23 Cr	₹73 Cr	-₹124 Cr	-₹238 Cr	—

🟢 Revenue has grown at 43.1% a year over 3 years.

🟢 EBITDA has grown at 61.7% a year over 3 years.

🟢 EBITDA Margin has risen from 7.3% to 10.5% over 3 years (+3.2 pts).

🟢 PAT (Net Profit) has grown at 59.7% a year over 3 years.

🟢 EPS has grown at 62.4% a year over 3 years.

🔴 ROE has fallen from 29.0% to 17.4% over 3 years (-11.6 pts).

🔴 ROCE has fallen from 33.6% to 23.8% over 3 years (-9.7 pts).

🔴 Total Debt has grown at 40.5% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹23 Cr to -₹238 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1,254 Cr

Total Liabilities

₹495 Cr

Cash & Equivalents

₹69 Cr

Operating Cash Flow

-₹215 Cr

Capex

-₹23 Cr

Shareholding (proxy)

Institutional Holding

6.8%

Insider Holding

76.2%

Analyst Consensus

Recommendations

3 Buy · 0 Hold · 0 Sell

Target Price (Mean)

₹774

+9.3% vs CMP

Target Range

₹700 – ₹897

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 mixed5 general

GNG Electronics (NSEI:EBGNG) Stock Price

Simply Wall Street, 14 Oct

GNG Electronics dispatches 20th AGM notice for September 24, 2026

scanx.trade, 08 Oct

GNG Electronics up 7% on heavy volume; promoter to sell 3.95% stake

Business Standard, 11 Jun

GNG Electronics Reports Q1 Revenue Of 4.12B Rupees As Net Profit Reaches 289M Rupees

Sahi, 30 JulResults

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

GNG Electronics Share Price News: Fundamentals and Valuation

Univest, 07 Oct

Compare with

Equitymaster, 16 Oct

Watch Items

Trading very close to its 52-week high — momentum-driven entries here carry more mean-reversion risk.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

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. 3 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 ↑