Paramount Communications Limited

Technology — Communication Equipment · NSE

₹60.80+₹4.27 (+7.55%)

DalalBaazaar Score

49 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Moderate

Driven by negative free cash flow, micro-cap size, which brings thin liquidity.

In simple words: The business is earning a fairly low return on the money invested in it, with modest growth. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:01 pm

Understanding the Business

Company site ↗

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

What does this company do?

Paramount Communications Limited, together with its subsidiaries, engages in the manufacture and sale of wires and cables in India.

IndustryCommunication Equipment

SectorTechnology

Employees402

Annual revenue₹1,888 Cr

How does it make money?

Turns over ₹1,888 Cr a year. Of every ₹100 of sales, about ₹3 reaches shareholders as profit, with ₹6 left at the operating level before interest, tax and depreciation. Each of its 402 employees supports ₹4.70 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹4.70 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?Little sign of one

Returns on capital of 12.7% 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.

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 3 years revenue moved +141% while net margin moved -48% 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+141%

Margin effect-48%

DalalBaazaar Score

49/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROE of 7.7% is weak
✗ ROE has fallen by 8.5 points over the period

Quality vs. Valuation

Company Quality

52/ 100

Average

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

Valuation

32/ 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.

Historical Valuation

Current P/E

30.6x

3Y Median

23.1x

40 monthly readings · mean 23.3x · range 10.0x–44.0x

Sector Median

16.5x

median of 4 sector peers

⚠️Current valuation is approximately 32% above its 3y median of 23.1x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

⚠️Against its sector it trades 85% above the peer median of 16.5x.

vs. its own history

Expensive

23.1x median over 40 months · +32%

vs. sector peers

Expensive

16.5x median of 4 peers · +85%

vs. generic bands

Fair

15x–35x

EV/EBITDA

19.2x

PEG

3.94

What's Good / What's Bad

🟢 What's Going Well3

Debt is being paid down
Total debt is down 23% over 3 years.
Very low debt
Debt/Equity of 0.16x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Return on equity is falling
ROE has dropped from 16.2% to 7.7% — each rupee of shareholder capital earns less than it did.

Red Flags

4 items require attention · 4 watch

🟡Interest coverage is deterioratingFinancial
Cover has fallen from 11.4x to 5.0x.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹91 Cr in the latest year.
🟡Margins are compressingFinancial
EBITDA margin is down 2.2 points over 3 years.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 57% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Deleveraging frees up earnings
Debt is down 23% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
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 8.0% to 5.8%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The price already assumes success
The stock trades 32% above its own median multiple. At this level the business has to deliver just to stand still, and a stumble is repriced twice — lower earnings on a lower multiple.
Returns on shareholder capital are falling
ROE has dropped from 16.2% to 7.7%. 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 26% a year✓ 34.1% CAGR
Latest reported year was 17.4%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 4%✓ 5.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹91 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.1x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 10%✓ 12.7%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

6 / 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

3 good · 6 neutral · 2 weak

Market Cap

₹1,990 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

30.6x

Fair

Fairly valued against the generic band

P/B Ratio

2.38x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹1.99

Profitable

Profitable on a per-share basis

ROE

7.7%

Weak

Weak capital efficiency

ROCE

12.7%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.16x

Low

Conservative leverage

Revenue Growth (YoY)

17.4%

Healthy

Healthy top-line growth

Profit Growth (YoY)

4.9%

Modest

Slow profit growth

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹91 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

5.7%

Average

Average margins

Net Margin

3.1%

Average

Average bottom-line conversion

Current Ratio

2.42

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.72

Defensive

Steadier than the market

52W Range Position

69%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

58.1 / 61.9

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

52.0

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹783 Cr	₹1,057 Cr	₹1,555 Cr	₹1,888 Cr	+34.1%
EBITDA	₹63 Cr	₹95 Cr	₹133 Cr	₹110 Cr	+20.4%
EBITDA Margin	8.0%	9.0%	8.6%	5.8%	—
PAT (Net Profit)	₹48 Cr	₹86 Cr	₹87 Cr	₹60 Cr	+7.7%
EPS	₹2.4	₹3.29	₹2.85	₹1.96	-6.5%
ROE	16.2%	13.7%	12.1%	7.7%	—
ROCE	13.0%	13.6%	16.6%	12.7%	—
Total Debt	₹160 Cr	₹103 Cr	₹33 Cr	₹123 Cr	-8.4%
Free Cash Flow	₹2 Cr	-₹153 Cr	₹44 Cr	-₹91 Cr	—

🟢 Revenue has grown at 34.1% a year over 3 years.

🟢 EBITDA has grown at 20.4% a year over 3 years.

🔴 EBITDA Margin has fallen from 8.0% to 5.8% over 3 years (-2.2 pts).

🟢 PAT (Net Profit) has grown at 7.7% a year over 3 years.

🔴 EPS has shrunk at 6.5% a year over 3 years.

🔴 ROE has fallen from 16.2% to 7.7% over 3 years (-8.5 pts).

🟡 ROCE has held roughly flat at 12.7% over 3 years.

🟢 Total Debt has shrunk at 8.4% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹2 Cr to -₹91 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1,129 Cr

Total Liabilities

₹351 Cr

Cash & Equivalents

₹5 Cr

Operating Cash Flow

-₹38 Cr

Capex

-₹53 Cr

Shareholding (proxy)

Institutional Holding

0.3%

Insider Holding

48.8%

Corporate Actions

Ex-Dividend Date

11 Sept 2008

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

2 mixed4 general

Paramount Communications Share Price rises 8.38% to Rs 61.20

Univest, 16 OctPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Paramount Communications Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 30 Aug

Paramount Communications Q1FY27 revenue up 17% to ₹529 crore; export recovery drives margin expansion

scanx.trade, 14 AugCapacity

🟡Mixed / dependsCapacity additions can raise revenue over two to three years, but the capital spend usually pressures free cash flow first. Worth checking whether the capex is funded from operations or from borrowing.

Are Paramount Communications Limited's (NSE:PARACABLES) Fundamentals Good Enough to Warrant Buying Given The Stock's Recent Weakness?

Simply Wall Street, 29 Jan

Sunil Singhania Buys 3.6% Stake in This Cable Stock: What the Paramount Communications Deal Means

Univest, 15 Oct

Paramount Communications shareholders approve all resolutions at 32nd AGM

scanx.trade, 26 Sept

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongFinancial Health

MiddlingBusiness Quality · Growth

WeakProfitability · Valuation · Risk

Points for each in the Score ↑

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