Innovana Thinklabs Limited

Technology — Software - Application · NSE

₹295.30−₹0.95 (−0.32%)

DalalBaazaar Score

66 / 100

🟢 Good

Verdict

REASONABLE

Risk

Low

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

In simple words: Reasonable but unspectacular business quality, though profits are falling even as sales grow. The direction of profits is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:49 pm

Understanding the Business

Company site ↗

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

What does this company do?

Innovana Thinklabs Limited engages in the software and application development business in India and internationally. The company designs, develops, and maintains software systems and solutions.

IndustrySoftware - Application

SectorTechnology

Employees119

Annual revenue₹132 Cr

How does it make money?

Turns over ₹132 Cr a year. Of every ₹100 of sales, about ₹29 reaches shareholders as profit, with ₹40 left at the operating level before interest, tax and depreciation. Each of its 119 employees supports ₹1.11 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.11 Cr

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 14.8% 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 +67% while net margin moved -15% 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+67%

Margin effect-15%

DalalBaazaar Score

66/ 100

Good

Weighted across six categories. Every point is explained below.

• ROE of 14.0% is moderate
✗ ROE has fallen by 10.2 points over the period

Quality vs. Valuation

Company Quality

67/ 100

Good

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

Valuation

48/ 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.

Historical Valuation

Current P/E

21.0x

3Y Median

20.1x

40 monthly readings · mean 19.9x · range 14.8x–27.3x

Sector Median

16.5x

median of 4 sector peers

🟡Currently trading close to its 3y median of 20.1x — the market is paying about what it usually pays for this company.

⚠️Against its sector it trades 27% above the peer median of 16.5x.

vs. its own history

Fair

20.1x median over 40 months · +5%

vs. sector peers

Expensive

16.5x median of 4 peers · +27%

vs. generic bands

Fair

15x–35x

EV/EBITDA

12.3x

PEG

1.70

What's Good / What's Bad

🟢 What's Going Well3

Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
Very low debt
Debt/Equity of 0.21x 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 24.2% to 14.0% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 27.6% to 14.8% — often a sign of competition or overexpansion.

Red Flags

2 items require attention · 2 high

🔴Debt has risen sharplyFinancial
Total debt is up 369% over 3 years, from ₹12 Cr to ₹58 Cr.
🔴Receivables growing faster than salesFinancial
Receivables up 376% against revenue up 67% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Self-funding with balance-sheet headroom
Positive free cash flow of ₹14 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 376% against revenue up 67%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
A premium to the sector to defend
It trades 27% above the peer median. That premium needs a reason that persists, or it closes.
Returns on shareholder capital are falling
ROE has dropped from 24.2% to 14.0%. 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
2 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 14% a year✓ 18.7% CAGR
Latest reported year was 21.4%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 38%✓ 40.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✓ ₹14 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.1x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 12%✓ 14.8%
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

4 good · 6 neutral · 1 weak

Market Cap

₹610 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

21.0x

Fair

Fairly valued against the generic band

P/B Ratio

3.63x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹14.06

Profitable

Profitable on a per-share basis

ROE

14.0%

Moderate

Moderate capital efficiency

ROCE

14.8%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.21x

Low

Conservative leverage

Revenue Growth (YoY)

21.4%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-58.1%

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

₹14 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

12.0%

Average

Average margins

Net Margin

22.1%

Good

Strong bottom-line conversion

Current Ratio

2.38

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.23

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

297.1 / 306.8

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

47.7

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹79 Cr	₹101 Cr	₹103 Cr	₹132 Cr	+18.7%
EBITDA	₹33 Cr	₹51 Cr	₹60 Cr	₹53 Cr	+17.3%
EBITDA Margin	41.8%	50.2%	58.3%	40.4%	—
PAT (Net Profit)	₹27 Cr	₹41 Cr	₹44 Cr	₹38 Cr	+12.3%
EPS	₹26.17	₹20.13	₹21.81	₹17.78	-12.1%
ROE	24.2%	25.1%	21.5%	14.0%	—
ROCE	27.6%	30.3%	23.7%	14.8%	—
Total Debt	₹12 Cr	₹23 Cr	₹44 Cr	₹58 Cr	+67.4%
Free Cash Flow	-₹2 Cr	-₹11 Cr	₹23 Cr	₹14 Cr	—

🟢 Revenue has grown at 18.7% a year over 3 years.

🟢 EBITDA has grown at 17.3% a year over 3 years.

🔴 EBITDA Margin has fallen from 41.8% to 40.4% over 3 years (-1.4 pts).

🟢 PAT (Net Profit) has grown at 12.3% a year over 3 years.

🔴 EPS has shrunk at 12.1% a year over 3 years.

🔴 ROE has fallen from 24.2% to 14.0% over 3 years (-10.2 pts).

🔴 ROCE has fallen from 27.6% to 14.8% over 3 years (-12.8 pts).

🔴 Total Debt has grown at 67.4% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹2 Cr to ₹14 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹365 Cr

Total Liabilities

₹86 Cr

Cash & Equivalents

₹10 Cr

Operating Cash Flow

₹27 Cr

Capex

-₹13 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

78.7%

Corporate Actions

Ex-Dividend Date

25 Sept 2023

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

Innovana Thinklabs Share Price near 52-week low, weak price

Univest, 08 Oct

Innovana Thinklabs Ltd. Peer Comparison – Compare with Others

Value Research, 31 Aug

Innovana Thinklabs Ltd Slides 3.77%, BSE Information Technology index Shed 1.61%

Business Standard, 11 Jun

Innovana Thinklabs adopts FY26 financials at 11th AGM

scanx.trade, 29 Sept

Innovana Thinklabs: Best Stock in Its Sector? Key Metrics

Univest, 29 Sept

Innovana Thinklabs Ltd. Key Financial Ratios – Valuation, Profitability & More

Value Research, 29 Aug

Watch Items

Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongBusiness Quality · Financial Health

MiddlingGrowth · Profitability · Valuation · Risk

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

All 5 tripwires holding · see Key things to watch ↑