Novus Loyalty Limited

Technology — Software - Application · BSE

₹186.95+₹5.10 (+2.80%)

DalalBaazaar Score

67 / 100

🟢 Good

Verdict

REASONABLE

Risk

Moderate

Driven by micro-cap size, which brings thin liquidity.

In simple words: Strong business and financial position, with both sales and profits growing well. Nothing on this snapshot stands out as an immediate concern — the usual checks on business quality and management still apply.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:07 pm

Constructive picture on fundamentals. Profitability, leverage and growth metrics are broadly healthy on this snapshot. That said, valuation should still be checked against direct sector peers (not just the generic P/E bands used here) before treating this as a buy signal.

Understanding the Business

Company site ↗

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

What does this company do?

Novus Loyalty Limited provides computer software and related activities in India and internationally.

IndustrySoftware - Application

SectorTechnology

Annual revenue₹127 Cr

How does it make money?

Turns over ₹127 Cr a year. Of every ₹100 of sales, about ₹7 reaches shareholders as profit, with ₹10 left at the operating level before interest, tax and depreciation.

EBITDA margin9.9%

Net margin7.3%

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.

TATA CONSULTANCY SERV LTP/E 17.3x · ROE 45.6%

INFOSYS LIMITEDP/E 15.8x · ROE 32.0%

HCL TECHNOLOGIES LTDP/E 20.4x · ROE 24.6%

WIPRO LTDP/E 14.5x · ROE 15.9%

What is its competitive advantage?Some evidence

ROCE of 19.8% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

ROCE19.8%

ROE25.1%

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 +114% while net margin moved +694% 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+114%

Margin effect+694%

DalalBaazaar Score

67/ 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

Quality vs. Valuation

Company Quality

74/ 100

Good

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

Valuation

50/ 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

24.8x

Sector Median

16.5x

median of 4 sector peers

⚠️Against its sector it trades 50% 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 · +50%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

24.8x

P/B

4.73x

EV/EBITDA

22.2x

PEG

0.16

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 4.1% to 9.9% over 3 years.
Cash generation is improving
Free cash flow is up 896% over 3 years.
Return on equity is rising
ROE has improved from 8.4% to 15.1%.
Return on capital is rising
ROCE has improved from 16.0% to 19.8%.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Inventory building faster than sales
Inventory is up 562% against revenue growth of 114% — stock may not be moving.

Red Flags

1 item require attention · 1 high

🔴Inventory building faster than salesFinancial
Inventory up 562% against revenue up 114% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 19.8% 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 4.1% to 9.9%. 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?

A premium to the sector to defend
It trades 50% 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
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 22% a year✓ 28.8% CAGR
Latest reported year was 21.8%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 8%✓ 9.9%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✓ ₹20 Cr
Profit that never becomes cash eventually stops being profit.
4ROCE stays above 17%✓ 19.8%
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
✓ 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 · 5 neutral · 0 weak

Market Cap

₹291 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

24.8x

Fair

Fairly valued against the generic band

P/B Ratio

4.73x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹7.54

Profitable

Profitable on a per-share basis

ROE

25.1%

Strong

Strong capital efficiency

ROCE

19.8%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

Not available

No data

Source didn't return this field

Revenue Growth (YoY)

21.8%

Healthy

Healthy top-line growth

Profit Growth (YoY)

148.5%

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

₹20 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹186.95

ROA

17.2%

Good

Assets are working hard

Operating Margin

7.9%

Average

Average margins

Net Margin

7.3%

Average

Average bottom-line conversion

Current Ratio

6.91

Comfortable

Healthy short-term liquidity

52W Range Position

54%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

210.3 / 189.8

Bullish alignment (short > long)

RSI (14)

25.6

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹60 Cr	₹73 Cr	₹105 Cr	₹127 Cr	+28.8%
EBITDA	₹2 Cr	₹5 Cr	₹6 Cr	₹13 Cr	+73.2%
EBITDA Margin	4.1%	6.9%	5.4%	9.9%	—
PAT (Net Profit)	₹1 Cr	₹3 Cr	₹4 Cr	₹9 Cr	+157.0%
EPS	₹0.35	₹1.91	₹2.4	—	—
ROE	8.4%	31.2%	29.9%	15.1%	—
ROCE	16.0%	45.3%	40.0%	19.8%	—
Total Debt	₹4 Cr	₹1 Cr	—	—	—
Free Cash Flow	₹2 Cr	₹2 Cr	₹3 Cr	₹20 Cr	+115.2%

🟢 Revenue has grown at 28.8% a year over 3 years.

🟢 EBITDA has grown at 73.2% a year over 3 years.

🟢 EBITDA Margin has risen from 4.1% to 9.9% over 3 years (+5.8 pts).

🟢 PAT (Net Profit) has grown at 157.0% a year over 3 years.

🟢 ROE has risen from 8.4% to 15.1% over 3 years (+6.7 pts).

🟢 ROCE has risen from 16.0% to 19.8% over 3 years (+3.8 pts).

🟢 Free Cash Flow has grown at 115.2% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹72 Cr

Total Liabilities

₹11 Cr

Total Debt

—

Cash & Equivalents

₹10 Cr

Operating Cash Flow

₹20 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

79.9%

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

1 mixed5 general

Novus Loyalty Share Price Falls 8.83% in Today’s Session

Univest, 08 OctPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Novus Loyalty Limited Share Price

Upstox, 05 May

Novus Loyalty (BSE:544735) - Stock Analysis

Simply Wall Street, 26 Mar

Novus Loyalty IPO: Check price band, GMP, subscription and other details

The Economic Times, 17 Mar

Novus Loyalty IPO Date: Check Issue Date, Price, Lot size, Subscription, News and Details - Moneycontrol

Moneycontrol.com, 10 Mar

Novus Loyalty gains on bagging Rs 88-cr order from Central Bank of India

Business Standard, 17 Apr

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
1 metric couldn't be retrieved for this stock — this is more common for smaller or thinly-covered listings.
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

🟡Business QualityAdequate11.5/20

🟢Financial HealthStrong17.5/20

🟢GrowthStrong14.9/20

🟢ProfitabilityStrong11.8/15

🟡ValuationFair9.3/15

🔴RiskHigh2.3/10

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. 1 high-severity red flag sits above this conclusion and should be read first.

This thesis breaks if

✓Revenue growth stays above 22% a year28.8% CAGR
✓EBITDA margin holds above 8%9.9%
✓Free cash flow remains positive₹20 Cr
✓ROCE stays above 17%19.8%