PCS Technology Limited

Technology — Information Technology Services · BSE

₹23.00−₹1.00 (−4.17%)

DalalBaazaar Score

64 / 100

🟢 Good

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, 6:51 pm

Understanding the Business

Company site ↗

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

What does this company do?

PCS Technology Limited provides information technology related facility management services in India. The company offers software development, implementation, and other related services.

IndustryInformation Technology Services

SectorTechnology

Annual revenue₹0 Cr

How does it make money?

Turns over ₹0 Cr a year. Of every ₹100 of sales, about ₹438 reaches shareholders as profit, with ₹660 left at the operating level before interest, tax and depreciation.

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 4.9% 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?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +24% while net margin moved +251% 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+24%

Margin effect+251%

DalalBaazaar Score

64/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.44 — 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
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

66/ 100

Good

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

Valuation

69/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

A good business currently available at an undemanding price — the combination this framework is built to look for.

Historical Valuation

Current P/E

27.4x

3Y Median

57.1x

40 monthly readings · mean 66.2x · range 24.4x–186.9x

Sector Median

16.5x

median of 4 sector peers

🟢Current valuation is approximately 52% below its 3y median of 57.1x. 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 65% above the peer median of 16.5x.

vs. its own history

Cheap

57.1x median over 40 months · -52%

vs. sector peers

Expensive

16.5x median of 4 peers · +65%

vs. generic bands

Fair

15x–35x

EV/EBITDA

5.1x

PEG

0.43

What's Good / What's Bad

🟢 What's Going Well3

Margins are improving
EBITDA margin is up from 330.6% to 659.6% over 3 years.
Return on capital is rising
ROCE has improved from 1.7% to 4.9%.
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

1 item require attention · 1 high

🔴Free cash flow negative for 4 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 330.6% to 659.6%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 52% 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 65% above the peer median. That premium needs a reason that persists, or it closes.
Growth barely outpaces inflation
Revenue compounding at 7.5% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
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

1EBITDA margin holds above 658%✓ 659.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹0 Cr
Profit that never becomes cash eventually stops being profit.
3Revenue growth stays above 6% a year✓ 7.5% CAGR
Latest reported year was 12.1%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
4ROCE stays above 8%✗ 4.9%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Valuation vs its own median of 57.1x✓ 27.4x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

7 / 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

3 good · 5 neutral · 3 weak

Market Cap

₹48 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

27.4x

Fair

Fairly valued against the generic band

P/B Ratio

1.05x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹0.84

Profitable

Profitable on a per-share basis

ROE

3.7%

Weak

Weak capital efficiency

ROCE

4.9%

Weak

Low return on total capital employed

Debt/Equity

Not available

No data

Source didn't return this field

Revenue Growth (YoY)

12.1%

Healthy

Healthy top-line growth

Profit Growth (YoY)

9.5%

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

-₹0 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

-370.5%

Weak

Thin margins leave little room for error

Net Margin

436.5%

Good

Strong bottom-line conversion

Current Ratio

64.20

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.44

Defensive

Steadier than the market

52W Range Position

44%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

24.2 / 21.3

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

40.8

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹0 Cr	₹0 Cr	₹0 Cr	₹0 Cr	+7.5%
EBITDA	₹1 Cr	₹2 Cr	₹2 Cr	₹3 Cr	+35.3%
EBITDA Margin	330.6%	524.2%	588.2%	659.6%	—
PAT (Net Profit)	₹0 Cr	₹1 Cr	₹1 Cr	₹2 Cr	+63.4%
EPS	₹0.19	₹0.49	₹0.63	₹0.81	+62.1%
ROE	0.9%	2.3%	3.0%	3.7%	—
ROCE	1.7%	3.7%	4.3%	4.9%	—
Total Debt	₹4 Cr	₹4 Cr	—	—	—
Free Cash Flow	-₹1 Cr	-₹1 Cr	-₹1 Cr	-₹0 Cr	—

🟢 Revenue has grown at 7.5% a year over 3 years.

🟢 EBITDA has grown at 35.3% a year over 3 years.

🟢 EBITDA Margin has risen from 330.6% to 659.6% over 3 years (+329.0 pts).

🟢 PAT (Net Profit) has grown at 63.4% a year over 3 years.

🟢 EPS has grown at 62.1% a year over 3 years.

🟢 ROE has risen from 0.9% to 3.7% over 3 years (+2.7 pts).

🟢 ROCE has risen from 1.7% to 4.9% over 3 years (+3.1 pts).

Balance Sheet & Cash Flow — FY2026

Total Assets

₹48 Cr

Total Liabilities

₹1 Cr

Cash & Equivalents

₹35 Cr

Operating Cash Flow

-₹0 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

79.6%

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 positive5 general

PCS Technology Ltd. Upper Circuit Today: Price, Data and Peers

Univest, 23 Sept

PCS Technology Ltd. Financials – Balance Sheet, Profit & Loss, Cash Flow

Value Research, 29 Aug

PCS Technology Q1 Results: Net profit rises 9% YoY to ₹48.55 lakh

scanx.trade, 12 AugResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

VEDAVAAG Stock Price and Chart — NSE:VEDAVAAG

TradingView, 18 Aug

Gaming PC Market Size, Share, Trends & Growth Report, 2034

Market Data Forecast, 05 Oct

Dell adds AI PCs and workstations. Dell Technologies stock yields 1.99 percent

ad-hoc-news.de, 13 Oct

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.

DalalBaazaar Thesis

StrongBusiness Quality · Financial Health · Growth · Valuation

MiddlingProfitability

WeakRisk

Points for each in the Score ↑

Attractive on both counts

A good business currently available at an undemanding price — the combination this framework exists to look for. The work left is qualitative: whether the advantage the numbers imply is one you can identify and expect to last. 1 high-severity red flag sits above this conclusion and should be read first.

2 of 5 tripwires tripped — Free cash flow remains positive; ROCE stays above 8% · see Key things to watch ↑