Response Informatics Limited

Technology — Software - Application · BSE

₹18.03₹0.00 (0.00%)

DalalBaazaar Score

56 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Very High

Driven by high debt relative to equity, negative free cash flow, micro-cap size, which brings thin liquidity.

In simple words: Reasonable but unspectacular business quality, but sales are shrinking. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:59 pm

Understanding the Business

Company site ↗

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

What does this company do?

Response Informatics Limited provides software staffing, consultancy, and allied services in India. The company offers IT staffing and HR services, including contract staffing, contract to hire staffing, direct hire, full-time, and human capital management.

IndustrySoftware - Application

SectorTechnology

Annual revenue₹26 Cr

How does it make money?

Turns over ₹26 Cr a year. Of every ₹100 of sales, about ₹8 reaches shareholders as profit, with ₹10 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 10.4% 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 +134% while net margin moved +44% 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+134%

Margin effect+44%

DalalBaazaar Score

56/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ High leverage magnifies any downturn in earnings
✗ 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

53/ 100

Average

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

Valuation

88/ 100

Cheap

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

6.2x

3Y Median

13.3x

40 monthly readings · mean 31.8x · range 7.0x–101.5x

Sector Median

16.5x

median of 4 sector peers

🟢Current valuation is approximately 53% below its 3y median of 13.3x. 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 62% below the peer median of 16.5x.

vs. its own history

Cheap

13.3x median over 40 months · -53%

vs. sector peers

Cheap

16.5x median of 4 peers · -62%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

6.5x

PEG

0.12

What's Good / What's Bad

🟢 What's Going Well2

Margins are improving
EBITDA margin is up from 6.8% to 9.9% over 3 years.
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

3 items require attention · 2 high · 1 watch

🔴High leverageFinancial
Debt/Equity of 9.47x — earnings must service borrowings before shareholders see anything.
🔴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.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹3 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 6.8% to 9.9%. 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 53% 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 62% 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?

Leverage amplifies any setback
Debt/Equity of 9.47x. Interest is payable whether or not the business has a good year.
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
2 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 25% a year✓ 32.8% CAGR
Latest reported year was -21.7%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 8%✓ 9.9%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹3 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.7x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 8%✓ 10.4%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

4 / 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

2 good · 6 neutral · 3 weak

Market Cap

₹15 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

6.2x

Cheap

Cheap against the generic band

P/B Ratio

Not available

No data

Source didn't return this field

EPS (TTM)

₹2.89

Profitable

Profitable on a per-share basis

ROE

10.3%

Moderate

Moderate capital efficiency

ROCE

10.4%

Moderate

Moderate return on the capital in the business

Debt/Equity

9.47x

High

High leverage

Revenue Growth (YoY)

-21.7%

Shrinking

Sales are contracting

Profit Growth (YoY)

0.5%

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

-₹3 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

0.0%

Weak

Thin margins leave little room for error

Net Margin

0.0%

Weak

Very little revenue reaches the bottom line

Current Ratio

4.35

Comfortable

Healthy short-term liquidity

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

19.3 / 19.7

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

35.1

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹11 Cr	₹34 Cr	₹34 Cr	₹26 Cr	+32.8%
EBITDA	₹1 Cr	₹3 Cr	₹3 Cr	₹3 Cr	+50.7%
EBITDA Margin	6.8%	10.2%	7.6%	9.9%	—
PAT (Net Profit)	₹1 Cr	₹2 Cr	₹2 Cr	₹2 Cr	+50.1%
EPS	₹0.83	₹2.94	₹2.58	₹2.53	+45.0%
ROE	11.4%	28.7%	13.0%	10.3%	—
ROCE	10.8%	26.9%	13.0%	10.4%	—
Total Debt	₹2 Cr	₹2 Cr	₹1 Cr	₹2 Cr	+6.5%
Free Cash Flow	-₹4 Cr	₹0 Cr	-₹2 Cr	-₹3 Cr	—

🟢 Revenue has grown at 32.8% a year over 3 years.

🟢 EBITDA has grown at 50.7% a year over 3 years.

🟢 EBITDA Margin has risen from 6.8% to 9.9% over 3 years (+3.1 pts).

🟢 PAT (Net Profit) has grown at 50.1% a year over 3 years.

🟢 EPS has grown at 45.0% a year over 3 years.

🔴 ROE has fallen from 11.4% to 10.3% over 3 years (-1.0 pts).

🟡 ROCE has held roughly flat at 10.4% over 3 years.

🔴 Total Debt has grown at 6.5% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹26 Cr

Total Liabilities

₹7 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹3 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

73.9%

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 positive1 mixed3 general

Response Informatics Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 13 Oct

Response Informatics conducts 29th AGM on September 29, 2026

scanx.trade, 29 Sept

Response Informatics consolidated net profit rises 102.99% in the March 2026 quarter

Business Standard, 01 JunResults

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

Response Informatics Ltd. Peer Comparison – Compare with Others

Value Research, 04 Sept

Response Informatics jumps on getting nod to acquire remaining 33.3% stake in Datalabs AI

Investment Guru India, 14 AugM&A

🟡Mixed / dependsAcquisitions change the balance sheet before they change the earnings. Look at what was paid, how it was funded, and whether debt rose.

Response Informatics FY26 Results: Net profit up 70% to ₹32.57 lakh

scanx.trade, 05 SeptResults

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

Watch Items

Revenue growth is negative (-21.7%) on the latest reported period — check if this is one-off or a trend.
Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
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

StrongGrowth · Valuation

MiddlingFinancial Health

WeakBusiness Quality · Profitability · 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. 2 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 ↑