Kody Technolab Limited

Sector n/a · NSE

₹3,550.00−₹168.30 (−4.53%)

DalalBaazaar Score

54 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

Driven by high debt relative to equity, negative free cash flow, small-cap size, which brings sharper price swings.

In simple words: The business is earning a fairly low return on the money invested in it, though profits are falling even as sales grow. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:09 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

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

How does it make money?

Turns over ₹80 Cr a year. Of every ₹100 of sales, about ₹21 reaches shareholders as profit, with ₹38 left at the operating level before interest, tax and depreciation.

EBITDA margin38.2%

Net margin20.9%

What is its competitive advantage?Little sign of one

Returns on capital of 12.4% 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.

ROCE12.4%

ROE7.8%

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 +633% while net margin moved -22% 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+633%

Margin effect-22%

DalalBaazaar Score

54/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Small Cap: thinner liquidity and sharper drawdowns are normal
✗ High leverage magnifies any downturn in earnings
✗ 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

59/ 100

Average

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

Valuation

18/ 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.

vs. its own history

Not enough price and earnings history

vs. sector peers

Not enough peers with a usable P/E

vs. generic bands

No P/E available

P/E (Trailing)

—

P/B

—

EV/EBITDA

164.2x

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well1

Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention4

Margins are compressing
EBITDA margin has slipped from 40.6% to 38.2% over 3 years.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Return on equity is falling
ROE has dropped from 62.5% to 7.8% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 36.1% to 12.4% — often a sign of competition or overexpansion.

Red Flags

3 items require attention · 1 high · 2 watch

🔴High leverageFinancial
Debt/Equity of 3.61x — earnings must service borrowings before shareholders see anything.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹44 Cr in the latest year.
🟡Margins are compressingFinancial
EBITDA margin is down 2.4 points over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

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 40.6% to 38.2%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Leverage amplifies any setback
Debt/Equity of 3.61x. Interest is payable whether or not the business has a good year.
Returns on shareholder capital are falling
ROE has dropped from 62.5% to 7.8%. 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.
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 71% a year✓ 94.3% CAGR
Latest reported year was 11.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 36%✓ 38.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹44 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 9%✓ 12.4%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

4 / 9 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
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

1 good · 6 neutral · 4 weak

Market Cap

₹5,074 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

Not available

No data

Source didn't return this field

P/B Ratio

Not available

No data

Source didn't return this field

EPS (TTM)

Not available

No data

Source didn't return this field

ROE

7.8%

Weak

Weak capital efficiency

ROCE

12.4%

Moderate

Moderate return on the capital in the business

Debt/Equity

3.61x

High

High leverage

Revenue Growth (YoY)

11.9%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-4.9%

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

-₹44 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹3,550

Gross Margin

50.3%

Proxy

Operating margin unavailable — showing gross margin instead

Net Margin

20.9%

Good

Strong bottom-line conversion

Current Ratio

3.05

Comfortable

Healthy short-term liquidity

Technical Snapshot

SMA 20 / SMA 50

1526.7 / 1477.9

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

55.0

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹11 Cr	₹22 Cr	₹72 Cr	₹80 Cr	+94.3%
EBITDA	₹4 Cr	₹7 Cr	₹29 Cr	₹31 Cr	+90.4%
EBITDA Margin	40.6%	33.2%	40.3%	38.2%	—
PAT (Net Profit)	₹3 Cr	₹5 Cr	₹18 Cr	₹17 Cr	+79.1%
EPS	₹2.29	₹3.84	₹12.46	—	—
ROE	62.5%	13.2%	22.3%	7.8%	—
ROCE	36.1%	18.4%	31.6%	12.4%	—
Total Debt	₹7 Cr	₹1 Cr	₹13 Cr	₹8 Cr	+1.3%
Free Cash Flow	-₹9 Cr	-₹13 Cr	₹3 Cr	-₹44 Cr	—

🟢 Revenue has grown at 94.3% a year over 3 years.

🟢 EBITDA has grown at 90.4% a year over 3 years.

🔴 EBITDA Margin has fallen from 40.6% to 38.2% over 3 years (-2.4 pts).

🟢 PAT (Net Profit) has grown at 79.1% a year over 3 years.

🔴 ROE has fallen from 62.5% to 7.8% over 3 years (-54.7 pts).

🔴 ROCE has fallen from 36.1% to 12.4% over 3 years (-23.8 pts).

🟡 Total Debt has been broadly flat over 3 years (1.3% a year).

Balance Sheet & Cash Flow — FY2026

Total Assets

₹266 Cr

Total Liabilities

₹51 Cr

Total Debt

₹8 Cr

Cash & Equivalents

₹43 Cr

Operating Cash Flow

₹12 Cr

Capex

-₹56 Cr

Recent News

1 mixed5 general

Kody Technolab Q1 FY27 Results Preview

Univest, 08 JulResults

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

Risks To Shareholder Returns Are Elevated At These Prices For Kody Technolab Limited (NSE:KODYTECH)

Simply Wall Street, 04 Nov

Kody Technolab soars after export order, hits upper circuit

Moneycontrol.com, 15 Jan

Kody Technolab IPO opens: Check price band, latest GMP, subscription status, other key details of SME IPO

Livemint, 15 Sept

Kody Technolab (NSEI:KODYTECH) - Stock Analysis

Simply Wall Street, 29 Sept

Kody Technolab stock lists at 6% premium over IPO price on NSE SME

Moneycontrol.com, 27 Sept

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
Sector/industry classification unavailable — verify manually for peer comparison.
3 metrics couldn't be retrieved for this stock — this is more common for smaller or thinly-covered listings.

DalalBaazaar Thesis

🟢Business QualityStrong13/20

🟡Financial HealthAdequate10.6/20

🟡GrowthModest12.9/20

🟡ProfitabilityModerate7.5/15

🟡ValuationFair7.5/15

🔴RiskHigh2.9/10

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 71% a year94.3% CAGR
✓EBITDA margin holds above 36%38.2%
✗Free cash flow remains positive-₹44 Cr
✓Debt / EBITDA stays below 2x0.3x
✓ROCE stays above 9%12.4%