Incap Limited

Technology — Electronic Components · BSE

₹74.00−₹1.00 (−1.33%)

DalalBaazaar Score

46 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Moderate

Driven by micro-cap size, which brings thin liquidity, a very high earnings multiple, which leaves little margin for disappointment, falling profits.

In simple words: The business is earning a fairly low return on the money invested in it, but sales are shrinking. Valuation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:05 pm

Caution warranted. Multiple fundamental metrics — flagged in red below — point to either valuation stretch, leverage risk, or weakening profitability. This doesn't mean avoid the stock outright, but it does mean the burden of proof is on the growth story to justify the current price.

Understanding the Business

Company site ↗

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

What does this company do?

Incap Limited engages in the manufacture and sale of aluminum electrolytic capacitors in India and internationally. The company provides line, post, and pin polymer insulators. The company was incorporated in 1990 and is based in Vijayawada, India.

IndustryElectronic Components

SectorTechnology

Employees75

Annual revenue₹32 Cr

How does it make money?

Turns over ₹32 Cr a year. Of every ₹100 of sales, about ₹1 reaches shareholders as profit, with ₹4 left at the operating level before interest, tax and depreciation. Each of its 75 employees supports ₹42.2 lakh of revenue a year, the signature of a people-led business.

EBITDA margin4.3%

Net margin1.1%

Revenue / employee₹42.2 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.

TATA CONSULTANCY SERV LTP/E 17.3x · ROE 45.6%

INFOSYS LIMITEDP/E 15.8x · ROE 32.0%

HCL TECHNOLOGIES LTDP/E 20.4x · ROE 24.6%

WIPRO LTDP/E 14.5x · ROE 15.9%

What is its competitive advantage?Little sign of one

Returns on capital of 5.1% 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.

ROCE5.1%

ROE0.9%

Peer median ROE32.0%

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +94% while net margin moved -74% 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+94%

Margin effect-74%

DalalBaazaar Score

46/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROE of 0.9% is weak

Quality vs. Valuation

Company Quality

48/ 100

Average

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

Valuation

26/ 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

80.4x

3Y Median

58.5x

40 monthly readings · mean 63.6x · range 29.1x–129.8x

Sector Median

16.5x

median of 4 sector peers

⚠️Current valuation is approximately 37% above its 3y median of 58.5x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

⚠️Against its sector it trades 386% above the peer median of 16.5x.

vs. its own history

Expensive

58.5x median over 40 months · +37%

vs. sector peers

Expensive

16.5x median of 4 peers · +386%

vs. generic bands

Expensive

Above 35x

P/E (Trailing)

80.4x

P/B

2.37x

EV/EBITDA

26.7x

PEG

—

Dividend Yield

1.35%

What's Good / What's Bad

🟢 What's Going Well4

Debt is being paid down
Total debt is down 32% over 3 years.
Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
Very low debt
Debt/Equity of 0.19x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention3

Margins are compressing
EBITDA margin has slipped from 8.5% to 4.3% over 3 years.
Inventory building faster than sales
Inventory is up 207% against revenue growth of 94% — stock may not be moving.
Valuation above its historical average
At 80.4x the stock trades 37% above its own median of 58.5x.

Red Flags

3 items require attention · 1 high · 2 watch

🔴Inventory building faster than salesFinancial
Inventory up 207% against revenue up 94% — stock may not be moving.
🟡Profit is decliningFinancial
Net profit is down 49% over 3 years.
🟡Margins are compressingFinancial
EBITDA margin is down 4.3 points over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Deleveraging frees up earnings
Debt is down 32% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹5 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?

Margins are being competed away
EBITDA margin has fallen from 8.5% to 4.3%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The price already assumes success
The stock trades 37% above its own median multiple. At this level the business has to deliver just to stand still, and a stumble is repriced twice — lower earnings on a lower multiple.
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 18% a year✓ 24.6% CAGR
Latest reported year was -45.7%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 2%✓ 4.3%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Interest cover stays above 3x✗ 2.5x
How much operating profit can fall before interest stops being comfortably covered.
4Free cash flow remains positive✓ ₹5 Cr
Profit that never becomes cash eventually stops being profit.
5Debt / EBITDA stays below 2x✓ 0.6x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.

Investment Checklist

4 / 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

3 good · 3 neutral · 5 weak

Market Cap

₹38 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

80.4x

Expensive

Expensive — verify against sector peers

P/B Ratio

2.37x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹0.92

Profitable

Profitable on a per-share basis

ROE

0.9%

Weak

Weak capital efficiency

ROCE

5.1%

Weak

Low return on total capital employed

Debt/Equity

0.19x

Low

Conservative leverage

Revenue Growth (YoY)

-45.7%

Shrinking

Sales are contracting

Profit Growth (YoY)

-57.8%

Falling

Profits are shrinking

Dividend Yield

1.35%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹3 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹74

ROA

0.9%

Weak

Assets generate little profit

Operating Margin

3.3%

Weak

Thin margins leave little room for error

Net Margin

0.5%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.34

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.54

Defensive

Steadier than the market

52W Range Position

19%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

78.5 / 83.7

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

32.0

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹16 Cr	₹18 Cr	₹34 Cr	₹32 Cr	+24.6%
EBITDA	₹1 Cr	₹1 Cr	₹2 Cr	₹1 Cr	-1.1%
EBITDA Margin	8.5%	8.2%	5.6%	4.3%	—
PAT (Net Profit)	₹1 Cr	₹1 Cr	₹1 Cr	₹0 Cr	-20.2%
EPS	₹1.29	₹1.3	₹1.56	₹0.66	-20.0%
ROE	4.2%	4.2%	4.9%	2.1%	—
ROCE	6.4%	6.5%	8.7%	5.1%	—
Total Debt	₹1 Cr	₹3 Cr	₹5 Cr	₹1 Cr	-11.9%
Free Cash Flow	-₹2 Cr	-₹6 Cr	-₹6 Cr	₹5 Cr	—

🟢 Revenue has grown at 24.6% a year over 3 years.

🟡 EBITDA has been broadly flat over 3 years (-1.1% a year).

🔴 EBITDA Margin has fallen from 8.5% to 4.3% over 3 years (-4.3 pts).

🔴 PAT (Net Profit) has shrunk at 20.2% a year over 3 years.

🔴 EPS has shrunk at 20.0% a year over 3 years.

🔴 ROE has fallen from 4.2% to 2.1% over 3 years (-2.1 pts).

🔴 ROCE has fallen from 6.4% to 5.1% over 3 years (-1.3 pts).

🟢 Total Debt has shrunk at 11.9% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹2 Cr to ₹5 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹28 Cr

Total Liabilities

₹12 Cr

Total Debt

₹1 Cr

Cash & Equivalents

₹3 Cr

Operating Cash Flow

₹5 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

77.8%

Corporate Actions

Dividend Rate

₹1

Ex-Dividend Date

18 Sept 2026

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

Incap Corporation: Share repurchase during week 41

TradingView, 12 Oct

Incap Ltd AGM resolutions pass with 99.99% votes in favour

scanx.trade, 28 Sept

Incap Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 31 Aug

Incap Corporation: Share repurchase during week 41

marketscreener.com, 12 Oct

Incap Q1 FY27 Results: PAT Rs 11 Lakh, Revenue Rs 5 Cr

Univest, 03 AugResults

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

Historical Data

Equitypandit, 08 Mar

Watch Items

Revenue growth is negative (-45.7%) 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.

DalalBaazaar Thesis

🔴Business QualityWeak7.5/20

🟢Financial HealthStrong15.4/20

🔴GrowthWeak8.9/20

🔴ProfitabilityWeak4.5/15

🔴ValuationDemanding4.9/15

🟡RiskModerate5.2/10

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. 1 high-severity red flag sits above this conclusion and should be read first.

This thesis breaks if

✓Revenue growth stays above 18% a year24.6% CAGR
✓EBITDA margin holds above 2%4.3%
✗Interest cover stays above 3x2.5x
✓Free cash flow remains positive₹5 Cr
✓Debt / EBITDA stays below 2x0.6x