Purple Wave Infocom Limited

Technology — Information Technology Services · BSE

₹455.05₹0.00 (0.00%)

DalalBaazaar Score

60 / 100

🟢 Good

Verdict

CAUTION

Risk

Moderate

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

In simple words: Strong business and financial position, but sales are shrinking. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 8:28 pm

Understanding the Business

Company site ↗

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

What does this company do?

Purple Wave Infocom Limited designs, integrates, manages, and supports on site and cloud-based communication and automation solutions.

IndustryInformation Technology Services

SectorTechnology

Employees83

Annual revenue₹146 Cr

How does it make money?

Turns over ₹146 Cr a year. Of every ₹100 of sales, about ₹9 reaches shareholders as profit, with ₹14 left at the operating level before interest, tax and depreciation. Each of its 83 employees supports ₹1.76 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.76 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?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 32.4%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 35.9% against a peer median of 32.0% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

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 +108% while net margin moved +878% 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+108%

Margin effect+878%

DalalBaazaar Score

60/ 100

Good

Weighted across six categories. Every point is explained below.

• P/E of 31.3x already prices in growth
✗ P/E is 144% above its own historical median of 12.9x — expensive by its own standards
✗ P/B of 7.31x is a steep premium to book

Quality vs. Valuation

Company Quality

69/ 100

Good

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

Valuation

41/ 100

Expensive

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

A good business, but the price already reflects that. The quality is real; the question is whether you are overpaying for it today.

Historical Valuation

Current P/E

31.3x

1.0Y Median

12.9x

12 monthly readings · mean 22.1x · range 10.5x–46.4x

Sector Median

16.5x

median of 4 sector peers

⚠️Current valuation is approximately 144% above its 1.0y median of 12.9x. 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 89% above the peer median of 16.5x.

vs. its own history

Expensive

12.9x median over 12 months · +144%

vs. sector peers

Expensive

16.5x median of 4 peers · +89%

vs. generic bands

Fair

15x–35x

EV/EBITDA

20.9x

PEG

0.18

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 2.8% to 14.1% over 3 years.
High return on capital employed
ROCE of 32.4% is the mark of a business that converts capital into profit efficiently.
Very low debt
Debt/Equity of 0.29x 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 capital is falling
ROCE has declined from 36.7% to 32.4% — often a sign of competition or overexpansion.

Red Flags

6 items require attention · 4 high · 2 watch

🔴Debt has risen sharplyFinancial
Total debt is up 145% over 3 years, from ₹7 Cr to ₹17 Cr.
🔴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 210% against revenue up 108% — sales are being booked faster than they are collected.
🔴Inventory building faster than salesFinancial
Inventory up 1083% against revenue up 108% — stock may not be moving.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹25 Cr in the latest year.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 37% 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 32.4% 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 2.8% to 14.1%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
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 210% against revenue up 108%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
The price already assumes success
The stock trades 144% 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.
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
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 21% a year✓ 27.7% CAGR
Latest reported year was -6.3%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 12%✓ 14.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹25 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.8x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 29%✓ 32.4%
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

4 good · 3 neutral · 4 weak

Market Cap

₹421 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

31.3x

Fair

Fairly valued against the generic band

P/B Ratio

7.31x

Rich

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

EPS (TTM)

₹14.52

Profitable

Profitable on a per-share basis

ROE

35.9%

Strong

Strong capital efficiency

ROCE

32.4%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.29x

Low

Conservative leverage

Revenue Growth (YoY)

-6.3%

Shrinking

Sales are contracting

Profit Growth (YoY)

-25.4%

Falling

Profits are shrinking

Dividend Yield

None

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

Free Cash Flow

-₹28 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

ROA

16.2%

Good

Assets are working hard

Operating Margin

14.2%

Average

Average margins

Net Margin

9.2%

Average

Average bottom-line conversion

Current Ratio

2.35

Comfortable

Healthy short-term liquidity

52W Range Position

94%

Near high

Near its 52-week high

Technical Snapshot

SMA 20 / SMA 50

389.7 / 365.1

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

80.8

Overbought zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹70 Cr	₹90 Cr	₹128 Cr	₹146 Cr	+27.7%
EBITDA	₹2 Cr	₹8 Cr	₹14 Cr	₹21 Cr	+117.8%
EBITDA Margin	2.8%	9.2%	11.1%	14.1%	—
PAT (Net Profit)	₹1 Cr	₹5 Cr	₹9 Cr	₹13 Cr	+173.1%
EPS	₹0.71	₹5.88	₹9.8	—	—
ROE	24.0%	66.4%	52.7%	23.3%	—
ROCE	36.7%	91.3%	76.6%	32.4%	—
Total Debt	₹7 Cr	₹11 Cr	₹15 Cr	₹17 Cr	+34.8%
Free Cash Flow	₹3 Cr	-₹5 Cr	₹1 Cr	-₹25 Cr	—

🟢 Revenue has grown at 27.7% a year over 3 years.

🟢 EBITDA has grown at 117.8% a year over 3 years.

🟢 EBITDA Margin has risen from 2.8% to 14.1% over 3 years (+11.3 pts).

🟢 PAT (Net Profit) has grown at 173.1% a year over 3 years.

🟡 ROE has held roughly flat at 23.3% over 3 years.

🔴 ROCE has fallen from 36.7% to 32.4% over 3 years (-4.4 pts).

🔴 Total Debt has grown at 34.8% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹3 Cr to -₹25 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹94 Cr

Total Liabilities

₹36 Cr

Cash & Equivalents

₹7 Cr

Operating Cash Flow

-₹11 Cr

Capex

-₹14 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

79.3%

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

6 general

Purple Wave Infocom Ltd | Stock Share Price Live

MarketSmith India, 12 Oct

Purple Wave Infocom Share Price Near 52-Week High Today

Univest, 09 Oct

Purple Wave Infocom Ltd Key Financial Ratios – Valuation, Profitability & More

Value Research, 31 Aug

PURPLE WAVE INFOCOM LIMITED Share Price - Live PURPLEWAVE Stock Price & Chart

Upstox, 05 May

Purple Wave Infocom confirms all AGM resolutions passed with requisite majority

scanx.trade, 25 Sept

Purple Wave Infocom (BSE:544627) - Stock Analysis

Simply Wall Street, 05 Dec

Watch Items

Revenue growth is negative (-6.3%) on the latest reported period — check if this is one-off or a trend.
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

StrongFinancial Health · Growth · Profitability

MiddlingBusiness Quality

WeakValuation · Risk

Points for each in the Score ↑

Good business, demanding price

The quality is real and the price already reflects it. Buying here is a bet that the business keeps compounding for long enough to grow into the multiple — which good businesses often do, but it removes the margin for error that a lower price would have given you. 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 ↑