Kratikal Tech Limited

Technology — Software - Application · BSE

₹155.40−₹5.00 (−3.12%)

DalalBaazaar Score

63 / 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, 7:03 pm

Understanding the Business

Company site ↗

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

What does this company do?

Kratikal Tech Limited provides cybersecurity and software solutions including AI-driven security awareness, phishing simulation, learning management, email security, and related services in India and internationally.

IndustrySoftware - Application

SectorTechnology

Employees173

Annual revenue₹37 Cr

How does it make money?

Turns over ₹37 Cr a year. Of every ₹100 of sales, about ₹17 reaches shareholders as profit, with ₹25 left at the operating level before interest, tax and depreciation. Each of its 173 employees supports ₹21.2 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹21.2 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?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 34.0%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 35.0% against a peer median of 32.0% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

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 2 years revenue moved +182% while net margin moved -32% 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+182%

Margin effect-32%

DalalBaazaar Score

63/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

74/ 100

Good

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

Valuation

47/ 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

28.1x

Sector Median

16.5x

median of 4 sector peers

⚠️Against its sector it trades 70% 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 · +70%

vs. generic bands

Fair

15x–35x

EV/EBITDA

18.5x

PEG

0.73

What's Good / What's Bad

🟢 What's Going Well3

Debt is being paid down
Total debt is down 83% over 2 years.
High return on capital employed
ROCE of 34.0% is the mark of a business that converts capital into profit efficiently.
Very low debt
Debt/Equity of 0.04x leaves the balance sheet with plenty of headroom.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 48.8% to 25.6% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 58.0% to 34.0% — often a sign of competition or overexpansion.

Red Flags

4 items require attention · 3 high · 1 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.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 7.6 points, from 32.9% to 25.2%.
🔴Receivables growing faster than salesFinancial
Receivables up 268% against revenue up 182% — sales are being booked faster than they are collected.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹3 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 34.0% 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.
Deleveraging frees up earnings
Debt is down 83% over 2 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?

Margins are being competed away
EBITDA margin has fallen from 32.9% to 25.2%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Sales are being booked faster than collected
Receivables are up 268% against revenue up 182%. 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 70% above the peer median. That premium needs a reason that persists, or it closes.
Returns on shareholder capital are falling
ROE has dropped from 48.8% to 25.6%. 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.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 51% a year✓ 68.0% CAGR
Latest reported year was 76.1%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 23%✓ 25.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹3 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.0x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 31%✓ 34.0%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

10 / 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

6 good · 3 neutral · 2 weak

Market Cap

₹173 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

28.1x

Fair

Fairly valued against the generic band

P/B Ratio

5.28x

Rich

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

EPS (TTM)

₹5.53

Profitable

Profitable on a per-share basis

ROE

35.0%

Strong

Strong capital efficiency

ROCE

34.0%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.04x

Low

Conservative leverage

Revenue Growth (YoY)

76.1%

Healthy

Healthy top-line growth

Profit Growth (YoY)

61.0%

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

-₹5 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

ROA

23.0%

Good

Assets are working hard

Operating Margin

15.2%

Good

Healthy core-business profitability

Net Margin

16.7%

Good

Strong bottom-line conversion

Current Ratio

2.40

Comfortable

Healthy short-term liquidity

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

167.1 / 166.1

Bullish alignment (short > long)

RSI (14)

25.3

Oversold zone

Financial Trend (3-Year)

Metric	FY24	FY25	FY26	2Y CAGR
Revenue	₹13 Cr	₹21 Cr	₹37 Cr	+68.0%
EBITDA	₹4 Cr	₹6 Cr	₹9 Cr	+47.2%
EBITDA Margin	32.9%	27.8%	25.2%	—
PAT (Net Profit)	₹3 Cr	₹4 Cr	₹6 Cr	+38.5%
EPS	₹2.89	₹3.44	—	—
ROE	48.8%	34.3%	25.6%	—
ROCE	58.0%	47.7%	34.0%	—
Total Debt	₹0 Cr	₹0 Cr	₹0 Cr	-58.4%
Free Cash Flow	₹0 Cr	₹0 Cr	-₹3 Cr	—

🟢 Revenue has grown at 68.0% a year over 2 years.

🟢 EBITDA has grown at 47.2% a year over 2 years.

🔴 EBITDA Margin has fallen from 32.9% to 25.2% over 2 years (-7.6 pts).

🟢 PAT (Net Profit) has grown at 38.5% a year over 2 years.

🔴 ROE has fallen from 48.8% to 25.6% over 2 years (-23.3 pts).

🔴 ROCE has fallen from 58.0% to 34.0% over 2 years (-24.0 pts).

🟢 Total Debt has shrunk at 58.4% a year over 2 years.

🔴 Free Cash Flow has turned negative, from ₹0 Cr to -₹3 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹30 Cr

Total Liabilities

₹6 Cr

Cash & Equivalents

₹2 Cr

Operating Cash Flow

₹2 Cr

Capex

-₹5 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

66.9%

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

6 general

Compare with

Equitymaster, 18 Oct

Kratikal Tech incorporates wholly owned subsidiary in USA

scanx.trade, 08 Oct

BSE SME Kratikal Tech makes a secure landing on Dalal Street

Business Standard, 07 Jul

Kratikal Tech Limited IPO Date, Price Band, GMP, Subscription & Allotment

IndiaIPO, 25 Jun

Kratikal Tech Ltd. IPO Review - Kratikal Tech Ltd. IPO Dates, Issue Price, Subscription and Allotment Status

The Economic Times, 23 Jun

Compare ZENSAR TECHNOLOGIES with

Equitymaster, 15 Oct

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.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

StrongBusiness Quality · Financial Health · Growth · Profitability

WeakValuation · 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. 3 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 ↑