Prostarm Info Systems Limited

Industrials — Electrical Equipment & Parts · NSE

₹133.50+₹0.92 (+0.69%)

DalalBaazaar Score

65 / 100

🟢 Good

Verdict

REASONABLE

Risk

High

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

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, 6:57 pm

Understanding the Business

Company site ↗

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

What does this company do?

Prostarm Info Systems Limited engages in the designing, manufacturing, assembling, sale, service and supply of energy storage equipment and power conditioning equipment in India and internationally.

IndustryElectrical Equipment & Parts

SectorIndustrials

Employees470

Annual revenue₹386 Cr

How does it make money?

Turns over ₹386 Cr a year. Of every ₹100 of sales, about ₹9 reaches shareholders as profit, with ₹13 left at the operating level before interest, tax and depreciation. Each of its 470 employees supports ₹82.1 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹82.1 lakh

Who are its competitors?

The closest listed comparisons in its industry are SIEMENS LTD, ABB INDIA LIMITED, HAVELLS INDIA LIMITED. 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 16.4% 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 ROE17.1%

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 +68% while net margin moved -1% 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+68%

Margin effect-1%

DalalBaazaar Score

65/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✓ Profits have been consistent from year to year
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

67/ 100

Good

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

Valuation

70/ 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

21.2x

2Y Median

30.0x

18 monthly readings · mean 31.1x · range 22.8x–58.8x

Sector Median

88.8x

median of 3 sector peers

🟢Current valuation is approximately 29% below its 2y median of 30.0x. 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 76% below the peer median of 88.8x.

vs. its own history

Cheap

30.0x median over 18 months · -29%

vs. sector peers

Cheap

88.8x median of 3 peers · -76%

vs. generic bands

Fair

15x–35x

EV/EBITDA

16.9x

PEG

1.16

What's Good / What's Bad

🟢 What's Going Well1

Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 32.8% to 11.5% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 38.5% to 16.4% — often a sign of competition or overexpansion.

Red Flags

4 items require attention · 4 high

🔴Debt has risen sharplyFinancial
Total debt is up 274% over 3 years, from ₹25 Cr to ₹93 Cr.
🔴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.
🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🔴Receivables growing faster than salesFinancial
Receivables up 275% against revenue up 68% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 29% 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.
Cheaper than its peers
It trades 76% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
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?

Sales are being booked faster than collected
Receivables are up 275% against revenue up 68%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Returns on shareholder capital are falling
ROE has dropped from 32.8% to 11.5%. 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.
Several serious flags at once
4 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 14% a year✓ 18.8% CAGR
Latest reported year was 38.5%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 11%✓ 13.5%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹72 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.8x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 13%✓ 16.4%
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

5 good · 5 neutral · 1 weak

Market Cap

₹786 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

21.2x

Fair

Fairly valued against the generic band

P/B Ratio

2.74x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹6.3

Profitable

Profitable on a per-share basis

ROE

11.5%

Moderate

Moderate capital efficiency

ROCE

16.4%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.32x

Low

Conservative leverage

Revenue Growth (YoY)

38.5%

Healthy

Healthy top-line growth

Profit Growth (YoY)

85.4%

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

-₹72 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

7.5%

Average

Average margins

Net Margin

8.8%

Average

Average bottom-line conversion

Current Ratio

1.82

Comfortable

Healthy short-term liquidity

52W Range Position

20%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

132.6 / 134.7

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

33.8

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹230 Cr	₹258 Cr	₹351 Cr	₹386 Cr	+18.8%
EBITDA	₹28 Cr	₹37 Cr	₹47 Cr	₹52 Cr	+22.3%
EBITDA Margin	12.4%	14.4%	13.5%	13.5%	—
PAT (Net Profit)	₹20 Cr	₹23 Cr	₹30 Cr	₹33 Cr	+18.2%
EPS	₹3.39	₹3.96	₹5.04	₹5.82	+19.7%
ROE	32.8%	27.7%	28.6%	11.5%	—
ROCE	38.5%	37.8%	40.6%	16.4%	—
Total Debt	₹25 Cr	₹43 Cr	₹67 Cr	₹93 Cr	+55.2%
Free Cash Flow	-₹25 Cr	-₹16 Cr	-₹15 Cr	-₹72 Cr	—

🟢 Revenue has grown at 18.8% a year over 3 years.

🟢 EBITDA has grown at 22.3% a year over 3 years.

🟢 EBITDA Margin has risen from 12.4% to 13.5% over 3 years (+1.1 pts).

🟢 PAT (Net Profit) has grown at 18.2% a year over 3 years.

🟢 EPS has grown at 19.7% a year over 3 years.

🔴 ROE has fallen from 32.8% to 11.5% over 3 years (-21.3 pts).

🔴 ROCE has fallen from 38.5% to 16.4% over 3 years (-22.2 pts).

🔴 Total Debt has grown at 55.2% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹537 Cr

Total Liabilities

₹251 Cr

Cash & Equivalents

₹1 Cr

Operating Cash Flow

-₹49 Cr

Capex

-₹23 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

72.8%

Peer Comparison

Company	P/E	ROE
SIEMENS LTD	88.8x	10.5%
ABB INDIA LIMITED	92.6x	19.1%
HAVELLS INDIA LIMITED	43.5x	17.1%

Recent News

1 positive5 general

Prostarm Info Systems allots 28.98 lakh warrants at ₹147 per warrant

scanx.trade, 15 Oct

Compare with

Equitymaster, 16 Oct

Prostarm Info Systems Ltd Peer Comparison – Compare with Others

Value Research, 29 Aug

PROSTARM INFO SYSTEMS LTD Share Price - Live NSE: PROSTARM Stock Price & Chart

Upstox, 05 May

Prostarm Info Systems gains 13% after bagging ₹165 Cr EPC order for 50 MW solar project

Alice Blue, 08 Apr

Prostarm Info Systems consolidated net profit rises 17.08% in the March 2026 quarter

Business Standard, 23 MayResults

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

Watch Items

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

DalalBaazaar Thesis

StrongFinancial Health · Growth · Valuation

MiddlingBusiness Quality · Profitability

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. 4 high-severity red flags sit above this conclusion and should be read first.

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