Panache Digilife Limited

Technology — Communication Equipment · NSE

₹656.45+₹12.85 (+2.00%)

DalalBaazaar Score

69 / 100

🟢 Good

Verdict

NEUTRAL

Risk

Moderate

Driven by negative free cash flow, micro-cap size, which brings thin liquidity, a very high earnings multiple, which leaves little margin for disappointment.

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 Panache Digilife Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Panache Digilife Limited designs, manufactures, distributes, sells, and services ICT and IoT devices in India.

IndustryCommunication Equipment

SectorTechnology

Employees37

Annual revenue₹243 Cr

How does it make money?

Turns over ₹243 Cr a year. Of every ₹100 of sales, about ₹7 reaches shareholders as profit, with ₹12 left at the operating level before interest, tax and depreciation. Each of its 37 employees supports ₹6.57 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹6.57 Cr

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?Some evidence

ROCE of 22.2% 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 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 +117% while net margin moved +805% 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+117%

Margin effect+805%

DalalBaazaar Score

69/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.43 — historically steadier than the index
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast
✗ Trading within 10% of its 52-week high — entries here carry more pullback risk
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

78/ 100

Good

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

Valuation

49/ 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

59.6x

3Y Median

112.3x

40 monthly readings · mean 247.0x · range 50.8x–788.2x

Sector Median

16.5x

median of 4 sector peers

🟢Current valuation is approximately 47% below its 3y median of 112.3x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

⚠️Against its sector it trades 260% above the peer median of 16.5x.

vs. its own history

Cheap

112.3x median over 40 months · -47%

vs. sector peers

Expensive

16.5x median of 4 peers · +260%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

36.7x

PEG

0.35

What's Good / What's Bad

🟢 What's Going Well7

Margins are improving
EBITDA margin is up from 5.7% to 12.1% over 3 years.
Debt is being paid down
Total debt is down 21% over 3 years.
Return on equity is rising
ROE has improved from 2.6% to 15.4%.
Return on capital is rising
ROCE has improved from 15.4% to 22.2%.
High return on capital employed
ROCE of 22.2% is the mark of a business that converts capital into profit efficiently.
Very low debt
Debt/Equity of 0.26x leaves the balance sheet with plenty of headroom.
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

2 items require attention · 2 watch

🟡Free cash flow is negativeFinancial
Free cash flow was -₹6 Cr in the latest year.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 33% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 22.2% 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 5.7% to 12.1%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Deleveraging frees up earnings
Debt is down 21% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Priced below its own history
The stock trades 47% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
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 260% 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✓ 29.5% CAGR
Latest reported year was 72.1%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 10%✓ 12.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹6 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.9x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 19%✓ 22.2%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

7 / 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 · 2 neutral · 3 weak

Market Cap

₹1,051 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

59.6x

Expensive

Expensive — verify against sector peers

P/B Ratio

9.15x

Rich

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

EPS (TTM)

₹11.02

Profitable

Profitable on a per-share basis

ROE

15.4%

Strong

Strong capital efficiency

ROCE

22.2%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.26x

Low

Conservative leverage

Revenue Growth (YoY)

72.1%

Healthy

Healthy top-line growth

Profit Growth (YoY)

294.3%

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

Operating Margin

10.8%

Average

Average margins

Net Margin

7.2%

Average

Average bottom-line conversion

Current Ratio

1.82

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.43

Defensive

Steadier than the market

52W Range Position

100%

Near high

Near its 52-week high

Technical Snapshot

SMA 20 / SMA 50

563.9 / 536.4

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

77.1

Overbought zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹112 Cr	₹97 Cr	₹116 Cr	₹243 Cr	+29.5%
EBITDA	₹6 Cr	₹9 Cr	₹11 Cr	₹29 Cr	+66.3%
EBITDA Margin	5.7%	9.3%	9.7%	12.1%	—
PAT (Net Profit)	₹1 Cr	₹1 Cr	₹7 Cr	₹16 Cr	+170.0%
EPS	₹0.69	₹0.39	₹4.74	₹9.06	+135.9%
ROE	2.6%	1.7%	10.5%	15.4%	—
ROCE	15.4%	10.6%	15.0%	22.2%	—
Total Debt	₹35 Cr	₹33 Cr	₹21 Cr	₹28 Cr	-7.7%
Free Cash Flow	-₹8 Cr	₹4 Cr	-₹17 Cr	-₹6 Cr	—

🟢 Revenue has grown at 29.5% a year over 3 years.

🟢 EBITDA has grown at 66.3% a year over 3 years.

🟢 EBITDA Margin has risen from 5.7% to 12.1% over 3 years (+6.4 pts).

🟢 PAT (Net Profit) has grown at 170.0% a year over 3 years.

🟢 EPS has grown at 135.9% a year over 3 years.

🟢 ROE has risen from 2.6% to 15.4% over 3 years (+12.7 pts).

🟢 ROCE has risen from 15.4% to 22.2% over 3 years (+6.8 pts).

🟢 Total Debt has shrunk at 7.7% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹228 Cr

Total Liabilities

₹121 Cr

Cash & Equivalents

₹3 Cr

Operating Cash Flow

-₹5 Cr

Capex

-₹1 Cr

Corporate Actions

Ex-Dividend Date

21 Sept 2020

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

Panache Digilife Upper Circuit Today: Price, Data and Peers

Univest, 09 Oct

There May Be Underlying Issues With The Quality Of Panache Digilife's (NSE:PANACHE) Earnings

Simply Wall Street, 07 MayResults

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

Here's Why We Think Panache Digilife (NSE:PANACHE) Might Deserve Your Attention Today

Simply Wall Street, 20 Aug

Panache Digilife confirms no encumbrance on promoter shares for FY 2025-2026

scanx.trade, 28 May

Panache Digilife Upper Circuit Streak: Day 2 Price and Data

Univest, 06 Oct

Panache Digilif Consolidated June 2026 Net Sales at Rs 50.84 crore, up 72.11% Y-o-Y

Moneycontrol.com, 24 Aug

Watch Items

Trading very close to its 52-week high — momentum-driven entries here carry more mean-reversion risk.
Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in overbought territory — momentum entries here carry more short-term pullback risk.

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.

1 of 5 tripwires tripped — Free cash flow remains positive · see Key things to watch ↑