Effwa Infra & Research Limited

Sector n/a · NSE

₹219.00+₹10.40 (+4.99%)

DalalBaazaar Score

71 / 100

🟢 Good

Verdict

REASONABLE

Risk

Moderate

Driven by micro-cap size, which brings thin liquidity.

In simple words: Strong business and financial position, with both sales and profits growing well. Nothing on this snapshot stands out as an immediate concern — the usual checks on business quality and management still apply.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 8:28 pm

Understanding the Business

The 60-second version of Effwa Infra & Research 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 ₹253 Cr a year. Of every ₹100 of sales, about ₹11 reaches shareholders as profit, with ₹17 left at the operating level before interest, tax and depreciation.

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

ROCE has stayed above 15% in every year available and stands at 30.5%. Returns that high normally get competed away; when they persist, something is protecting them. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +120% while net margin moved +153% 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+120%

Margin effect+153%

DalalBaazaar Score

71/ 100

Good

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

Quality vs. Valuation

Company Quality

82/ 100

Excellent

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

Valuation

60/ 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.

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

EV/EBITDA

11.9x

PEG

—

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 7.2% to 16.6% over 3 years.
Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
High return on capital employed
ROCE of 30.5% 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 Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

2 items require attention · 1 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 134% over 3 years, from ₹16 Cr to ₹38 Cr.
🟡Receivables growing faster than salesFinancial
Receivables up 149% against revenue up 120% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 30.5% 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.
Margin expansion has further to run
EBITDA margin has risen from 7.2% to 16.6%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹9 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.
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 149% against revenue up 120%. 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.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 23% a year✓ 30.1% CAGR
Latest reported year was 36.8%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 15%✓ 16.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✓ ₹9 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.9x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 28%✓ 30.5%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

9 / 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

6 good · 5 neutral · 0 weak

Market Cap

₹507 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

23.2%

Strong

Strong capital efficiency

ROCE

30.5%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.31x

Low

Conservative leverage

Revenue Growth (YoY)

36.8%

Healthy

Healthy top-line growth

Profit Growth (YoY)

42.3%

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

₹9 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Gross Margin

28.2%

Proxy

Operating margin unavailable — showing gross margin instead

Net Margin

11.3%

Good

Strong bottom-line conversion

Current Ratio

2.92

Comfortable

Healthy short-term liquidity

Technical Snapshot

SMA 20 / SMA 50

354.3 / 353.3

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

49.0

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹115 Cr	₹145 Cr	₹185 Cr	₹253 Cr	+30.1%
EBITDA	₹8 Cr	₹20 Cr	₹30 Cr	₹42 Cr	+71.9%
EBITDA Margin	7.2%	13.8%	16.2%	16.6%	—
PAT (Net Profit)	₹5 Cr	₹14 Cr	₹20 Cr	₹29 Cr	+77.3%
EPS	₹2.22	₹6.01	₹9.28	—	—
ROE	21.8%	37.3%	21.2%	23.2%	—
ROCE	30.7%	51.7%	30.4%	30.5%	—
Total Debt	₹16 Cr	₹14 Cr	₹30 Cr	₹38 Cr	+32.8%
Free Cash Flow	-₹5 Cr	₹4 Cr	-₹31 Cr	₹9 Cr	—

🟢 Revenue has grown at 30.1% a year over 3 years.

🟢 EBITDA has grown at 71.9% a year over 3 years.

🟢 EBITDA Margin has risen from 7.2% to 16.6% over 3 years (+9.4 pts).

🟢 PAT (Net Profit) has grown at 77.3% a year over 3 years.

🟢 ROE has risen from 21.8% to 23.2% over 3 years (+1.4 pts).

🟡 ROCE has held roughly flat at 30.5% over 3 years.

🔴 Total Debt has grown at 32.8% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹5 Cr to ₹9 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹198 Cr

Total Liabilities

₹75 Cr

Cash & Equivalents

₹43 Cr

Operating Cash Flow

₹29 Cr

Capex

-₹20 Cr

Recent News

6 general

Here's Why We Think Effwa Infra & Research (NSE:EFFWA) Is Well Worth Watching

Simply Wall Street, 29 Aug

Effwa Infra & Research Key Ratios

Value Research, 21 Sept

EFFWA INFRA & RESEARCH L Share Price

Upstox, 05 May

Effwa Infra and Research IPO soars 90% on NSE SME debut

Moneycontrol.com, 12 Jul

Effwa Infra & Research Limited IPO Date, Price, GMP, Review, Detail

IndiaIPO, 02 May

Compare with

Equitymaster, 11 Jan

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

StrongBusiness Quality · Financial Health · Growth · Profitability

MiddlingValuation

WeakRisk

Points for each in the Score ↑

Good business at a fair price

A sound business at a reasonable valuation. Suitable for a long-term holding, with the valuation and the direction of margins worth watching rather than the business itself. 1 high-severity red flag sits above this conclusion and should be read first.

All 5 tripwires holding · see Key things to watch ↑