Fidel Softech Limited

Sector n/a · NSE

₹110.00−₹1.00 (−0.90%)

DalalBaazaar Score

64 / 100

🟢 Good

Verdict

REASONABLE

Risk

High

Driven by negative free cash flow, micro-cap size, which brings thin liquidity.

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, 6:08 pm

Mixed / neutral. No major red flags jump out, but nothing here screams "obviously cheap" either. This is a name that needs a peer comparison and a view on near-term earnings triggers before sizing a position.

Understanding the Business

The 60-second version of Fidel Softech 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 ₹102 Cr a year. Of every ₹100 of sales, about ₹13 reaches shareholders as profit, with ₹18 left at the operating level before interest, tax and depreciation.

EBITDA margin17.9%

Net margin13.5%

What is its competitive advantage?Some evidence

ROCE of 19.5% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

ROCE19.5%

ROE24.7%

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 +207% while net margin moved -16% 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+207%

Margin effect-16%

DalalBaazaar Score

64/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

72/ 100

Good

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

P/E (Trailing)

—

P/B

—

EV/EBITDA

9.9x

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well2

Return on equity is rising
ROE has improved from 16.6% to 24.7%.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Margins are compressing
EBITDA margin has slipped from 22.1% to 17.9% over 3 years.
Free cash flow is negative
The business is not currently covering its capital spending from operations.

Red Flags

3 items require attention · 1 high · 2 watch

🔴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.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹2 Cr in the latest year.
🟡Margins are compressingFinancial
EBITDA margin is down 4.3 points over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 19.5% 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.
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 22.1% to 17.9%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
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 34% a year✓ 45.3% CAGR
Latest reported year was 86.0%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 16%✓ 17.9%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA stays below 2x✗ 2.3x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4Free cash flow remains positive✗ -₹2 Cr
Profit that never becomes cash eventually stops being profit.
5ROCE stays above 16%✓ 19.5%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

8 / 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

5 good · 5 neutral · 1 weak

Market Cap

₹151 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)

₹10.04

Profitable

Profitable on a per-share basis

ROE

24.7%

Strong

Strong capital efficiency

ROCE

19.5%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.77x

Moderate

Moderate leverage

Revenue Growth (YoY)

86.0%

Healthy

Healthy top-line growth

Profit Growth (YoY)

47.9%

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

-₹2 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹110

Gross Margin

24.4%

Proxy

Operating margin unavailable — showing gross margin instead

Net Margin

13.5%

Good

Strong bottom-line conversion

Current Ratio

3.12

Comfortable

Healthy short-term liquidity

Technical Snapshot

SMA 20 / SMA 50

173.2 / 154.3

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

60.0

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹33 Cr	₹40 Cr	₹55 Cr	₹102 Cr	+45.3%
EBITDA	₹7 Cr	₹8 Cr	₹13 Cr	₹18 Cr	+35.3%
EBITDA Margin	22.1%	20.2%	22.9%	17.9%	—
PAT (Net Profit)	₹5 Cr	₹6 Cr	₹9 Cr	₹14 Cr	+36.9%
EPS	₹4.13	₹4.41	₹6.79	₹10.04	+34.5%
ROE	16.6%	16.2%	20.6%	24.7%	—
ROCE	21.1%	20.5%	26.3%	19.5%	—
Free Cash Flow	₹1 Cr	₹3 Cr	₹9 Cr	-₹2 Cr	—

🟢 Revenue has grown at 45.3% a year over 3 years.

🟢 EBITDA has grown at 35.3% a year over 3 years.

🔴 EBITDA Margin has fallen from 22.1% to 17.9% over 3 years (-4.3 pts).

🟢 PAT (Net Profit) has grown at 36.9% a year over 3 years.

🟢 EPS has grown at 34.5% a year over 3 years.

🟢 ROE has risen from 16.6% to 24.7% over 3 years (+8.1 pts).

🔴 ROCE has fallen from 21.1% to 19.5% over 3 years (-1.6 pts).

🔴 Free Cash Flow has turned negative, from ₹1 Cr to -₹2 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹119 Cr

Total Liabilities

₹63 Cr

Total Debt

₹43 Cr

Cash & Equivalents

₹12 Cr

Operating Cash Flow

₹8 Cr

Capex

-₹9 Cr

Recent News

2 positive2 mixed2 general

Fidel Softech Ltd. Upper Circuit Today: Price, Data and Peers

Univest, 23 Sept

We Think That There Are Some Issues For Fidel Softech (NSE:FIDEL) Beyond Its Promising Earnings

Simply Wall Street, 18 JulResults

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

Fidel Softech Ltd. (FIDEL-SM) Share Price Falls 9.15% Today

Univest, 30 JulPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Mahindra & Mahindra consolidated net profit rises 33.58% in the June 2026 quarter

Business Standard, 30 JulResults

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

Fidel Softech IPO Date, GMP, Review, Price, Allotment & Analysis

IPO Watch, 14 Sept

Exide Industries consolidated net profit rises 28.38% in the June 2026 quarter

Business Standard, 30 JulResults

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

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
Sector/industry classification unavailable — verify manually for peer comparison.
2 metrics couldn't be retrieved for this stock — this is more common for smaller or thinly-covered listings.

DalalBaazaar Thesis

🟢Business QualityStrong13.3/20

🟢Financial HealthStrong13.3/20

🟢GrowthStrong14.7/20

🟢ProfitabilityStrong12.9/15

🟡ValuationFair7.5/15

🔴RiskHigh2.4/10

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.

This thesis breaks if

✓Revenue growth stays above 34% a year45.3% CAGR
✓EBITDA margin holds above 16%17.9%
✗Debt / EBITDA stays below 2x2.3x
✗Free cash flow remains positive-₹2 Cr
✓ROCE stays above 16%19.5%