Euphoria Infotech (India) Limited

Technology — Software - Infrastructure · BSE

₹30.48₹0.00 (0.00%)

DalalBaazaar Score

57 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

High

Driven by negative free cash flow, micro-cap size, which brings thin liquidity, a beta above 1.3, so it swings harder than the index.

In simple words: Reasonable but unspectacular business quality, 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, 7:46 pm

Understanding the Business

Company site ↗

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

What does this company do?

Euphoria Infotech (India) Limited develops information technology (IT) solutions in India.

IndustrySoftware - Infrastructure

SectorTechnology

Employees56

Annual revenue₹15 Cr

How does it make money?

Turns over ₹15 Cr a year. Of every ₹100 of sales, about ₹10 reaches shareholders as profit, with ₹19 left at the operating level before interest, tax and depreciation. Each of its 56 employees supports ₹27.2 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹27.2 lakh

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?Little sign of one

Returns on capital of 13.1% 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 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 +107% while net margin moved -42% 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+107%

Margin effect-42%

DalalBaazaar Score

57/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Beta of 1.62 — amplifies market moves in both directions
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

55/ 100

Average

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

Valuation

88/ 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

5.7x

3Y Median

9.6x

35 monthly readings · mean 10.8x · range 3.7x–40.6x

Sector Median

16.5x

median of 4 sector peers

🟢Current valuation is approximately 40% below its 3y median of 9.6x. 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 65% below the peer median of 16.5x.

vs. its own history

Cheap

9.6x median over 35 months · -40%

vs. sector peers

Cheap

16.5x median of 4 peers · -65%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

4.8x

PEG

0.95

What's Good / What's Bad

🟢 What's Going Well2

Very low debt
Debt/Equity of 0.29x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 31.6% to 8.6% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 47.0% to 13.1% — often a sign of competition or overexpansion.

Red Flags

5 items require attention · 5 high

🔴Debt has risen sharplyFinancial
Total debt is up 240% over 3 years, from ₹2 Cr to ₹5 Cr.
🔴Free cash flow negative for 3 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 10.4 points, from 29.2% to 18.7%.
🔴Receivables growing faster than salesFinancial
Receivables up 234% against revenue up 107% — sales are being booked faster than they are collected.
🔴Inventory building faster than salesFinancial
Inventory up 334% against revenue up 107% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 40% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Cheaper than its peers
It trades 65% 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?

Margins are being competed away
EBITDA margin has fallen from 29.2% to 18.7%. 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 234% against revenue up 107%. 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 31.6% to 8.6%. 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
5 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 21% a year✓ 27.4% CAGR
Latest reported year was 42.4%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 17%✓ 18.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹4 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.8x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 10%✓ 13.1%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

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 · 5 neutral · 1 weak

Market Cap

₹9 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

5.7x

Cheap

Cheap against the generic band

P/B Ratio

0.49x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹5.33

Profitable

Profitable on a per-share basis

ROE

9.0%

Moderate

Moderate capital efficiency

ROCE

13.1%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.29x

Low

Conservative leverage

Revenue Growth (YoY)

42.4%

Healthy

Healthy top-line growth

Profit Growth (YoY)

8.1%

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

-₹5 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

ROA

6.3%

Average

Average asset productivity

Operating Margin

15.8%

Good

Healthy core-business profitability

Net Margin

10.2%

Good

Strong bottom-line conversion

Current Ratio

2.44

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

1.62

High swing

Swings more than the market in both directions

52W Range Position

24%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

28.2 / 29.5

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

70.0

Overbought zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹7 Cr	₹6 Cr	₹13 Cr	₹15 Cr	+27.4%
EBITDA	₹2 Cr	₹2 Cr	₹3 Cr	₹3 Cr	+9.9%
EBITDA Margin	29.2%	25.5%	21.1%	18.7%	—
PAT (Net Profit)	₹1 Cr	₹1 Cr	₹2 Cr	₹2 Cr	+6.0%
EPS	₹4.47	₹4.4	₹6.12	—	—
ROE	31.6%	6.3%	10.8%	8.6%	—
ROCE	47.0%	9.7%	15.2%	13.1%	—
Total Debt	₹2 Cr	₹1 Cr	₹1 Cr	₹5 Cr	+50.3%
Free Cash Flow	₹0 Cr	-₹7 Cr	-₹1 Cr	-₹4 Cr	—

🟢 Revenue has grown at 27.4% a year over 3 years.

🟢 EBITDA has grown at 9.9% a year over 3 years.

🔴 EBITDA Margin has fallen from 29.2% to 18.7% over 3 years (-10.4 pts).

🟢 PAT (Net Profit) has grown at 6.0% a year over 3 years.

🔴 ROE has fallen from 31.6% to 8.6% over 3 years (-23.0 pts).

🔴 ROCE has fallen from 47.0% to 13.1% over 3 years (-33.9 pts).

🔴 Total Debt has grown at 50.3% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹0 Cr to -₹4 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹31 Cr

Total Liabilities

₹13 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹4 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

66.2%

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

6 general

SRIT INDIA LTD. Stock/Share price , NSE/BSE Forecast News and Live Quotes

Equitymaster, 18 Oct

Euphoria Infotech (India) Ltd Key Financial Ratios – Valuation, Profitability & More

Value Research, 31 Aug

Euphoria Infotech (India) Limited Responds to BSE Inquiry on Share Price Movement

scanx.trade, 10 Apr

Euphoria Infotech moves up 5% after winning Rs. 17.83 Cr Webel order

Alice Blue, 14 Jan

Euphoria Infotech wins Rs 4.02 crore order from Webel Technology Limited

scanx.trade, 23 Sept

Kotak warns small and midcap euphoria may turn sour as investors chase quick returns

The Economic Times, 01 Oct

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

StrongFinancial Health · Valuation

MiddlingBusiness Quality · Growth · Profitability

WeakRisk

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

1 of 5 tripwires tripped — Free cash flow remains positive · see Key things to watch ↑