Fusion Klassroom Edutech Limited

Consumer Defensive — Education & Training Services · BSE

₹166.75+₹0.20 (+0.12%)

DalalBaazaar Score

71 / 100

🟢 Good

Verdict

REASONABLE

Risk

Moderate

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, 7:49 pm

Understanding the Business

Company site ↗

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

What does this company do?

Fusion Klassroom Edutech Limited operates as an education technology company in India.

IndustryEducation & Training Services

SectorConsumer Defensive

Annual revenue₹23 Cr

How does it make money?

Turns over ₹23 Cr a year. Of every ₹100 of sales, about ₹33 reaches shareholders as profit, with ₹56 left at the operating level before interest, tax and depreciation.

Who are its competitors?

The closest listed comparisons in its industry are HINDUSTAN UNILEVER LTD., ITC LTD, NESTLE INDIA LIMITED, BRITANNIA INDUSTRIES 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 49.0% 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 ROE51.0%

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +378% while net margin moved -333% 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+378%

Margin effect-333%

DalalBaazaar Score

71/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

83/ 100

Excellent

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

Valuation

66/ 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

20.4x

Sector Median

43.3x

median of 4 sector peers

🟢Against its sector it trades 53% below the peer median of 43.3x.

vs. its own history

Not enough price and earnings history

vs. sector peers

Cheap

43.3x median of 4 peers · -53%

vs. generic bands

Fair

15x–35x

EV/EBITDA

12.1x

PEG

—

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from -8.3% to 56.3% over 3 years.
Return on equity is rising
ROE has improved from -50.8% to 41.3%.
Return on capital is rising
ROCE has improved from -21.2% to 49.0%.
High return on capital employed
ROCE of 49.0% is the mark of a business that converts capital into profit efficiently.
Very low debt
Debt/Equity of 0.19x leaves the balance sheet with plenty of headroom.

🔴 What Needs Attention0

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

Red Flags

2 items require attention · 2 high

🔴Debt has risen sharplyFinancial
Total debt is up 127% over 3 years, from ₹2 Cr to ₹3 Cr.
🔴Free cash flow negative for 4 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 49.0% 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 -8.3% to 56.3%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Cheaper than its peers
It trades 53% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.

🔴 Bear CaseWhat could go wrong?

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
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 51% a year✓ 68.5% CAGR
Latest reported year was 128.4%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 54%✓ 56.3%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹4 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.3x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 46%✓ 49.0%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

9 / 10 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

Price history

Quick Metrics

6 good · 3 neutral · 2 weak

Market Cap

₹155 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

20.4x

Fair

Fairly valued against the generic band

P/B Ratio

6.62x

Rich

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

EPS (TTM)

₹8.16

Profitable

Profitable on a per-share basis

ROE

52.4%

Strong

Strong capital efficiency

ROCE

49.0%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.19x

Low

Conservative leverage

Revenue Growth (YoY)

128.4%

Healthy

Healthy top-line growth

Profit Growth (YoY)

161.7%

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

-₹6 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

ROA

32.5%

Good

Assets are working hard

Operating Margin

43.6%

Good

Healthy core-business profitability

Net Margin

32.5%

Good

Strong bottom-line conversion

Current Ratio

1.34

Comfortable

Healthy short-term liquidity

52W Range Position

17%

Mid-range

Technical Snapshot

RSI (14)

50.3

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹5 Cr	₹5 Cr	₹10 Cr	₹23 Cr	+68.5%
EBITDA	-₹0 Cr	₹1 Cr	₹4 Cr	₹13 Cr	—
EBITDA Margin	-8.3%	23.0%	40.0%	56.3%	—
PAT (Net Profit)	-₹1 Cr	₹0 Cr	₹3 Cr	₹8 Cr	—
EPS	₹-0.73	₹0.37	₹3.12	—	—
ROE	-50.8%	8.8%	29.0%	41.3%	—
ROCE	-21.2%	12.9%	30.9%	49.0%	—
Total Debt	₹2 Cr	₹0 Cr	₹1 Cr	₹3 Cr	+31.4%
Free Cash Flow	-₹2 Cr	-₹2 Cr	-₹1 Cr	-₹4 Cr	—

🟢 Revenue has grown at 68.5% a year over 3 years.

🟢 EBITDA has turned positive, from -₹0 Cr to ₹13 Cr.

🟢 EBITDA Margin has risen from -8.3% to 56.3% over 3 years (+64.6 pts).

🟢 PAT (Net Profit) has turned positive, from -₹1 Cr to ₹8 Cr.

🟢 ROE has risen from -50.8% to 41.3% over 3 years (+92.1 pts).

🟢 ROCE has risen from -21.2% to 49.0% over 3 years (+70.2 pts).

🔴 Total Debt has grown at 31.4% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹25 Cr

Total Liabilities

₹7 Cr

Cash & Equivalents

₹2 Cr

Operating Cash Flow

₹11 Cr

Capex

-₹14 Cr

Shareholding (proxy)

Institutional Holding

3.4%

Insider Holding

61.1%

Peer Comparison

Company	P/E	ROE
HINDUSTAN UNILEVER LTD.	42.5x	21.5%
ITC LTD	16.6x	27.4%
NESTLE INDIA LIMITED	59.8x	79.9%
BRITANNIA INDUSTRIES LTD	44.1x	51.0%

Recent News

6 general

Fusion Klassroom Edutech Limited Share Price

Business Today, 16 Oct

Fusion Klassroom Edutech IPO listing: Shares list at 7% premium over the IPO price

Livemint, 07 Aug

Fusion Klassroom Edutech Ltd. IPO

The Economic Times, 24 Jul

FUSION KLASSROOM EDUTECH LIMIT Share Price - Live KLASSROOM Stock Price & Chart

Upstox, 07 Aug

Edtech Klassroom’s Shares List At 7% Premium To Issue Price

Inc42, 07 Aug

Fusion Klassroom Edutech shares to list today: Check GMP ahead of debut

The Economic Times, 07 Aug

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. 2 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 ↑