ITI Limited

Technology — Communication Equipment · NSE

₹245.00+₹2.37 (+0.98%)

DalalBaazaar Score

57 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

Driven by short-term liabilities exceed short-term assets, negative free cash flow, small-cap size, which brings sharper price swings.

In simple words: Strong business and financial position, 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, 7:46 pm

Understanding the Business

Company site ↗

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

What does this company do?

ITI Limited engages in the manufacture, sale, and servicing of telecommunication equipment and building communication network infrastructures in India.

IndustryCommunication Equipment

SectorTechnology

Employees556

Annual revenue₹2,184 Cr

How does it make money?

Turns over ₹2,184 Cr a year. Of every ₹100 of sales, about ₹13 reaches shareholders as profit, with ₹4 left at the operating level before interest, tax and depreciation. Each of its 556 employees supports ₹3.93 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹3.93 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?Some evidence

ROCE of 23.5% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

Peer median ROE32.0%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +56% while net margin moved -152% 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+56%

Margin effect-152%

DalalBaazaar Score

57/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ P/E of 133.2x is demanding — it needs sustained high growth to justify
✗ P/B of 12.37x is a steep premium to book

Quality vs. Valuation

Company Quality

66/ 100

Good

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

Valuation

24/ 100

Expensive

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

A good business, but the price already reflects that. The quality is real; the question is whether you are overpaying for it today.

Historical Valuation

Current P/E

133.2x

Sector Median

16.5x

median of 4 sector peers

⚠️Against its sector it trades 705% above the peer median of 16.5x.

vs. its own history

Not enough price and earnings history

vs. sector peers

Expensive

16.5x median of 4 peers · +705%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

250.7x

PEG

—

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from -10.3% to 4.4% over 3 years.
Debt is being paid down
Total debt is down 59% over 3 years.
Return on equity is rising
ROE has improved from -15.2% to 15.4%.
Return on capital is rising
ROCE has improved from -4.1% to 23.5%.
High return on capital employed
ROCE of 23.5% is the mark of a business that converts capital into profit efficiently.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

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 -₹140 Cr in the latest year.
🟡Short-term liquidity is tightFinancial
Current ratio of 0.94 — near-term obligations exceed near-term assets.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 23.5% 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.
Margin expansion has further to run
EBITDA margin has risen from -10.3% to 4.4%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Deleveraging frees up earnings
Debt is down 59% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.

🔴 Bear CaseWhat could go wrong?

The debt load needs earnings to hold up
Debt is 7.9x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
A premium to the sector to defend
It trades 705% above the peer median. That premium needs a reason that persists, or it closes.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
Size brings its own risk
Small 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 12% a year✓ 16.1% CAGR
Latest reported year was -14.7%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 2%✓ 4.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA falls below 3x✗ 7.9x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
4Free cash flow remains positive✗ -₹140 Cr
Profit that never becomes cash eventually stops being profit.
5Interest cover stays above 3x✗ 2.5x
How much operating profit can fall before interest stops being comfortably covered.

Investment Checklist

6 / 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 · 2 neutral · 4 weak

Market Cap

₹23,590 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

133.2x

Expensive

Expensive — verify against sector peers

P/B Ratio

12.37x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹1.84

Profitable

Profitable on a per-share basis

ROE

15.4%

Strong

Strong capital efficiency

ROCE

23.5%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.40x

Low

Conservative leverage

Revenue Growth (YoY)

-14.7%

Shrinking

Sales are contracting

Profit Growth (YoY)

236.3%

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

-₹140 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

-2.5%

Weak

Thin margins leave little room for error

Net Margin

15.4%

Good

Strong bottom-line conversion

Current Ratio

0.94

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.09

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

246.5 / 262.9

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

40.0

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1,395 Cr	₹1,264 Cr	₹3,616 Cr	₹2,184 Cr	+16.1%
EBITDA	-₹144 Cr	-₹301 Cr	₹44 Cr	₹97 Cr	—
EBITDA Margin	-10.3%	-23.8%	1.2%	4.4%	—
PAT (Net Profit)	-₹360 Cr	-₹569 Cr	-₹215 Cr	₹293 Cr	—
EPS	₹-3.81	₹-5.92	₹-2.24	₹3.04	—
ROE	-15.2%	-31.9%	-13.2%	15.4%	—
ROCE	-4.1%	-16.2%	0.5%	23.5%	—
Total Debt	₹1,877 Cr	₹1,801 Cr	₹1,481 Cr	₹765 Cr	-25.9%
Free Cash Flow	-₹354 Cr	₹936 Cr	-₹151 Cr	-₹140 Cr	—

🟢 Revenue has grown at 16.1% a year over 3 years.

🟢 EBITDA has turned positive, from -₹144 Cr to ₹97 Cr.

🟢 EBITDA Margin has risen from -10.3% to 4.4% over 3 years (+14.8 pts).

🟢 PAT (Net Profit) has turned positive, from -₹360 Cr to ₹293 Cr.

🟢 EPS has turned positive, from ₹-3.81 to ₹3.04.

🟢 ROE has risen from -15.2% to 15.4% over 3 years (+30.5 pts).

🟢 ROCE has risen from -4.1% to 23.5% over 3 years (+27.6 pts).

🟢 Total Debt has shrunk at 25.9% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹9,347 Cr

Total Liabilities

₹7,441 Cr

Cash & Equivalents

₹24 Cr

Operating Cash Flow

-₹135 Cr

Capex

-₹4 Cr

Shareholding (proxy)

Institutional Holding

0.1%

Insider Holding

97.9%

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

5 mixed1 general

ITI Limited (ITI) Share Price NSE

TechGraph, 07 Oct

ITI share price surges over 15% in volatile trade amid heavy volumes

Business Standard, 16 MarPrice move