Precision Electronics Limited

Technology — Communication Equipment · BSE

₹170.50−₹2.70 (−1.56%)

DalalBaazaar Score

39 / 100

🔴 Weak

Verdict

CAUTION

Risk

Very High

Driven by high debt relative to equity, negative free cash flow, the company is currently loss-making.

In simple words: The company is currently losing money, but sales are shrinking. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:58 pm

Understanding the Business

Company site ↗

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

What does this company do?

Precision Electronics Limited designs and manufactures communication and electronics products and solutions in India.

IndustryCommunication Equipment

SectorTechnology

Employees162

Annual revenue₹78 Cr

How does it make money?

Turns over ₹78 Cr a year. Of every ₹100 of sales, about ₹1 reaches shareholders as profit, with ₹9 left at the operating level before interest, tax and depreciation. Each of its 162 employees supports ₹48.4 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹48.4 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?Little sign of one

Returns on capital of 9.2% 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 +121% while net margin moved +3307% 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+121%

Margin effect+3307%

DalalBaazaar Score

39/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ No meaningful P/E — the company is lossmaking
✗ P/B of 15.95x is a steep premium to book

Quality vs. Valuation

Company Quality

44/ 100

Weak

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

Valuation

20/ 100

Expensive

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

Weak on business quality and not cheap enough to compensate.

vs. its own history

Not enough price and earnings history

vs. sector peers

Not enough peers with a usable P/E

vs. generic bands

N/A

No P/E — the company is lossmaking

EV/EBITDA

44.2x

PEG

—

What's Good / What's Bad

🟢 What's Going Well2

Margins are improving
EBITDA margin is up from 2.7% to 8.9% over 3 years.
Return on equity is rising
ROE has improved from 0.1% to 4.1%.

🔴 What Needs Attention1

Return on capital is falling
ROCE has declined from 11.4% to 9.2% — often a sign of competition or overexpansion.

Red Flags

4 items require attention · 3 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 275% over 3 years, from ₹19 Cr to ₹71 Cr.
🔴High leverageFinancial
Debt/Equity of 4.82x — earnings must service borrowings before shareholders see anything.
🔴Thin interest coverageFinancial
Operating profit covers interest only 1.4x — little room if earnings dip.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹2 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 2.7% to 8.9%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.

🔴 Bear CaseWhat could go wrong?

The debt load needs earnings to hold up
Debt is 10.3x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
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.
Several serious flags at once
3 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

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

1Revenue growth stays above 23% a year✓ 30.2% CAGR
Latest reported year was -38.8%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 7%✓ 8.9%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA falls below 3x✗ 10.3x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
4Free cash flow remains positive✗ -₹2 Cr
Profit that never becomes cash eventually stops being profit.
5Interest cover stays above 3x✗ 1.4x
How much operating profit can fall before interest stops being comfortably covered.

Investment Checklist

5 / 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

1 good · 3 neutral · 7 weak

Market Cap

₹236 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

Not meaningful

Loss-making

Earnings are negative, so a P/E multiple can't be read here

P/B Ratio

15.95x

Rich

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

EPS (TTM)

₹-1.05

Loss-making

Negative earnings per share — the business is losing money

ROE

4.1%

Weak

Weak capital efficiency

ROCE

9.2%

Moderate

Moderate return on the capital in the business

Debt/Equity

4.82x

High

High leverage

Revenue Growth (YoY)

-38.8%

Shrinking

Sales are contracting

Profit Growth (YoY)

205.7%

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

-₹2 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

-9.8%

Weak

Thin margins leave little room for error

Net Margin

-2.1%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.02

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.58

Defensive

Steadier than the market

52W Range Position

40%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

185.2 / 179.6

Bullish alignment (short > long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

12.7

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹36 Cr	₹47 Cr	₹47 Cr	₹78 Cr	+30.2%
EBITDA	₹1 Cr	₹4 Cr	₹3 Cr	₹7 Cr	+93.4%
EBITDA Margin	2.7%	8.0%	6.9%	8.9%	—
PAT (Net Profit)	₹0 Cr	₹1 Cr	-₹1 Cr	₹1 Cr	+322.1%
EPS	₹0.01	₹1.05	₹-0.42	₹0.44	+253.0%
ROE	0.1%	9.8%	-4.1%	4.1%	—
ROCE	11.4%	13.0%	5.5%	9.2%	—
Total Debt	₹19 Cr	₹20 Cr	₹46 Cr	₹71 Cr	+55.4%
Free Cash Flow	-₹6 Cr	₹3 Cr	-₹23 Cr	-₹2 Cr	—

🟢 Revenue has grown at 30.2% a year over 3 years.

🟢 EBITDA has grown at 93.4% a year over 3 years.

🟢 EBITDA Margin has risen from 2.7% to 8.9% over 3 years (+6.2 pts).

🟢 PAT (Net Profit) has grown at 322.1% a year over 3 years.

🟢 EPS has grown at 253.0% a year over 3 years.

🟢 ROE has risen from 0.1% to 4.1% over 3 years (+4.1 pts).

🔴 ROCE has fallen from 11.4% to 9.2% over 3 years (-2.3 pts).

🔴 Total Debt has grown at 55.4% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹106 Cr

Total Liabilities

₹92 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

₹4 Cr

Capex

-₹6 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

85.0%

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

Precision Electronics Lower Circuit Today: Price, Data and Peers

Univest, 08 Oct

Hon Hai Precision Industry Co., Ltd. (2317.TW) stock price, news, quote and history

Yahoo Finance Singapore, 18 Oct

Precision Electronics wins Rs 37 crore order for surveillance systems from Home Ministry

scanx.trade, 08 JunOrder win

🟢Potentially positiveAn order or contract win, which adds to future revenue. How much depends on its size against annual sales and on when it is executed.

Precision Electronics Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 30 Aug

ONIDA Stock Price and Chart — NSE:ONIDA

TradingView, 02 Aug

Precision Electronics Ltd. Peer Comparison – Compare with Others

Value Research, 27 Aug

Watch Items

Revenue growth is negative (-38.8%) on the latest reported period — check if this is one-off or a trend.
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

StrongGrowth

WeakBusiness Quality · Financial Health · Profitability · Valuation · Risk

Points for each in the Score ↑

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation. 3 high-severity red flags sit above this conclusion and should be read first.

3 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Free cash flow remains positive; Interest cover stays above 3x · see Key things to watch ↑