Electro Force (India) Limited

Sector n/a · NSE

₹73.40−₹0.40 (−0.54%)

DalalBaazaar Score

38 / 100

🔴 Weak

Verdict

CAUTION

Risk

High

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, but sales are shrinking. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:56 pm

Understanding the Business

The 60-second version of Electro Force (India) 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 ₹19 Cr a year. Of every ₹100 of sales, about ₹3 reaches shareholders as profit, with ₹7 left at the operating level before interest, tax and depreciation.

What is its competitive advantage?Little sign of one

Returns on capital of 1.2% 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.

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -36% while net margin moved -87% 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-36%

Margin effect-87%

DalalBaazaar Score

38/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 14.0% a year
✗ Profit has declined at 56.5% a year
✗ Latest-year revenue growth of -63.3% is below the longer-term trend — momentum is fading
✗ Profit fell 50.5% in the latest year

Quality vs. Valuation

Company Quality

37/ 100

Weak

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

Valuation

18/ 100

Expensive

What you are being asked to pay, ignoring how good the business is.

Weak on business quality and not cheap enough to compensate.

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

128.7x

PEG

—

What's Good / What's Bad

🟢 What's Going Well1

Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 42.1% to 0.9% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 59.8% to 1.2% — often a sign of competition or overexpansion.

Red Flags

4 items require attention · 3 high · 1 watch

🔴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.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 31.9 points, from 38.8% to 6.9%.
🔴Receivables growing faster than salesFinancial
Receivables up 220% against revenue up -36% — sales are being booked faster than they are collected.
🟡Profit is decliningFinancial
Net profit is down 92% over 3 years.

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?

Margins are being competed away
EBITDA margin has fallen from 38.8% to 6.9%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Sales are being booked faster than collected
Receivables are up 220% against revenue up -36%. 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 42.1% to 0.9%. 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
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

1EBITDA margin holds above 5%✓ 6.9%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹0 Cr
Profit that never becomes cash eventually stops being profit.
3ROCE stays above 8%✗ 1.2%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

1 / 8 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✓ 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

0 good · 6 neutral · 5 weak

Market Cap

₹172 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

0.9%

Weak

Weak capital efficiency

ROCE

1.2%

Weak

Low return on total capital employed

Debt/Equity

Not available

No data

Source didn't return this field

Revenue Growth (YoY)

-63.3%

Shrinking

Sales are contracting

Profit Growth (YoY)

-50.5%

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

-₹0 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Gross Margin

6.3%

Proxy

Operating margin unavailable — showing gross margin instead

Net Margin

3.3%

Average

Average bottom-line conversion

Current Ratio

10.61

Comfortable

Healthy short-term liquidity

Technical Snapshot

SMA 20 / SMA 50

18.4 / 19.6

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

45.5

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹30 Cr	₹36 Cr	₹52 Cr	₹19 Cr	-14.0%
EBITDA	₹12 Cr	₹9 Cr	₹2 Cr	₹1 Cr	-51.7%
EBITDA Margin	38.8%	24.7%	4.7%	6.9%	—
PAT (Net Profit)	₹8 Cr	₹6 Cr	₹1 Cr	₹1 Cr	-56.5%
EPS	₹3.3	₹3.03	—	—	—
ROE	42.1%	8.2%	1.8%	0.9%	—
ROCE	59.8%	11.9%	2.7%	1.2%	—
Free Cash Flow	-₹1 Cr	-₹45 Cr	-₹1 Cr	-₹0 Cr	—

🔴 Revenue has shrunk at 14.0% a year over 3 years.

🔴 EBITDA has shrunk at 51.7% a year over 3 years.

🔴 EBITDA Margin has fallen from 38.8% to 6.9% over 3 years (-31.9 pts).

🔴 PAT (Net Profit) has shrunk at 56.5% a year over 3 years.

🔴 ROE has fallen from 42.1% to 0.9% over 3 years (-41.2 pts).

🔴 ROCE has fallen from 59.8% to 1.2% over 3 years (-58.6 pts).

Balance Sheet & Cash Flow — FY2026

Total Assets

₹77 Cr

Total Liabilities

₹5 Cr

Total Debt

—

Cash & Equivalents

₹1 Cr

Operating Cash Flow

-₹0 Cr

Capex

-₹0 Cr

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Watch Items

Revenue growth is negative (-63.3%) 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.
Sector/industry classification unavailable — verify manually for peer comparison.
4 metrics couldn't be retrieved for this stock — this is more common for smaller or thinly-covered listings.

DalalBaazaar Thesis

StrongFinancial Health

MiddlingValuation

WeakBusiness Quality · Growth · Profitability · Risk

Points for each in the Score ↑

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation. 3 high-severity red flags sit above this conclusion and should be read first.

2 of 3 tripwires tripped — Free cash flow remains positive; ROCE stays above 8% · see Key things to watch ↑