IZMO Limited

Technology — Software - Application · NSE

₹818.00−₹9.80 (−1.18%)

DalalBaazaar Score

65 / 100

🟢 Good

Verdict

REASONABLE

Risk

High

Driven by high debt relative to equity, negative free cash flow, micro-cap size, which brings thin liquidity.

In simple words: Reasonable but unspectacular business quality, with both sales and profits growing well. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:03 pm

Understanding the Business

Company site ↗

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

What does this company do?

IZMO Limited engages in interactive marketing business in India and internationally. The company offers hi-tech automotive e-retailing solutions. It also provides software solutions and services.

IndustrySoftware - Application

SectorTechnology

Employees594

Annual revenue₹285 Cr

How does it make money?

Turns over ₹285 Cr a year. Of every ₹100 of sales, about ₹17 reaches shareholders as profit, with ₹24 left at the operating level before interest, tax and depreciation. Each of its 594 employees supports ₹48.0 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹48.0 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 11.8% 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 +85% while net margin moved +28% 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+85%

Margin effect+28%

DalalBaazaar Score

65/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.74 — historically steadier than the index
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ High leverage magnifies any downturn in earnings
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

69/ 100

Good

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

Valuation

52/ 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

22.7x

3Y Median

21.1x

40 monthly readings · mean 21.5x · range 12.4x–35.9x

Sector Median

16.5x

median of 4 sector peers

🟡Currently trading close to its 3y median of 21.1x — the market is paying about what it usually pays for this company.

⚠️Against its sector it trades 37% above the peer median of 16.5x.

vs. its own history

Fair

21.1x median over 40 months · +8%

vs. sector peers

Expensive

16.5x median of 4 peers · +37%

vs. generic bands

Fair

15x–35x

EV/EBITDA

18.2x

PEG

0.68

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 21.3% to 23.7% over 3 years.
Return on equity is rising
ROE has improved from 7.3% to 11.6%.
Return on capital is rising
ROCE has improved from 7.5% to 11.8%.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

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

Red Flags

5 items require attention · 4 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 53% over 3 years, from ₹11 Cr to ₹17 Cr.
🔴High leverageFinancial
Debt/Equity of 4.05x — earnings must service borrowings before shareholders see anything.
🔴Receivables growing faster than salesFinancial
Receivables up 343% against revenue up 85% — sales are being booked faster than they are collected.
🔴Inventory building faster than salesFinancial
Inventory up 498% against revenue up 85% — stock may not be moving.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹13 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 21.3% to 23.7%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
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?

Leverage amplifies any setback
Debt/Equity of 4.05x. Interest is payable whether or not the business has a good year.
Sales are being booked faster than collected
Receivables are up 343% against revenue up 85%. 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 37% above the peer median. That premium needs a reason that persists, or it closes.
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
4 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 17% a year✓ 22.8% CAGR
Latest reported year was 15.7%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 22%✓ 23.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹13 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.2x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 9%✓ 11.8%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

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

3 good · 6 neutral · 2 weak

Market Cap

₹1,225 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

22.7x

Fair

Fairly valued against the generic band

P/B Ratio

2.99x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹35.97

Profitable

Profitable on a per-share basis

ROE

11.6%

Moderate

Moderate capital efficiency

ROCE

11.8%

Moderate

Moderate return on the capital in the business

Debt/Equity

4.05x

High

High leverage

Revenue Growth (YoY)

15.7%

Healthy

Healthy top-line growth

Profit Growth (YoY)

102.2%

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

-₹13 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

18.9%

Good

Healthy core-business profitability

Net Margin

18.3%

Good

Strong bottom-line conversion

Current Ratio

2.61

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.74

Defensive

Steadier than the market

52W Range Position

42%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

877.1 / 894.5

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

30.5

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹154 Cr	₹187 Cr	₹225 Cr	₹285 Cr	+22.8%
EBITDA	₹33 Cr	₹43 Cr	₹45 Cr	₹67 Cr	+27.3%
EBITDA Margin	21.3%	23.2%	20.2%	23.7%	—
PAT (Net Profit)	₹20 Cr	₹26 Cr	₹49 Cr	₹48 Cr	+33.4%
EPS	₹14.96	₹19.3	₹33.9	₹31.89	+28.7%
ROE	7.3%	8.5%	13.6%	11.6%	—
ROCE	7.5%	8.9%	14.9%	11.8%	—
Total Debt	₹11 Cr	₹9 Cr	₹12 Cr	₹17 Cr	+15.3%
Free Cash Flow	-₹0 Cr	₹1 Cr	-₹29 Cr	-₹13 Cr	—

🟢 Revenue has grown at 22.8% a year over 3 years.

🟢 EBITDA has grown at 27.3% a year over 3 years.

🟢 EBITDA Margin has risen from 21.3% to 23.7% over 3 years (+2.4 pts).

🟢 PAT (Net Profit) has grown at 33.4% a year over 3 years.

🟢 EPS has grown at 28.7% a year over 3 years.

🟢 ROE has risen from 7.3% to 11.6% over 3 years (+4.3 pts).

🟢 ROCE has risen from 7.5% to 11.8% over 3 years (+4.3 pts).

🔴 Total Debt has grown at 15.3% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹494 Cr

Total Liabilities

₹85 Cr

Cash & Equivalents

₹10 Cr

Operating Cash Flow

₹20 Cr

Capex

-₹33 Cr

Shareholding (proxy)

Institutional Holding

3.2%

Insider Holding

44.7%

Corporate Actions

Ex-Dividend Date

24 Sept 2009

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 positive3 mixed2 general

IZMO Share Price Rises 9.99%: Price, Valuation Analysis

Univest, 01 SeptPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Izmo Q4 profit surges 151% to ₹17.30 crore on strong revenue

scanx.trade, 08 OctResults

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

Some IZMO Limited (NSE:IZMO) Shareholders Look For Exit As Shares Take 25% Pounding

Simply Wall Street, 29 Jan

Izmo Share Price Rises 3.7% After Silicon Photonics Partnership

HDFC Sky, 16 MarPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

izmoMicro enters Defence Electronics market as IZMO stock hits upper circuit

BusinessLine, 09 Mar

Izmo shares jump 5% as arm develops 3D SiP module for space electronics

Business Standard, 12 JanPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongBusiness Quality · Growth · Profitability

MiddlingFinancial Health · Valuation

WeakRisk

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. 4 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 ↑