Macfos Limited

Technology — Electronic Components · BSE

₹1,016.10−₹38.90 (−3.69%)

DalalBaazaar Score

60 / 100

🟢 Good

Verdict

NEUTRAL

Risk

Moderate

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, 7:46 pm

Understanding the Business

Company site ↗

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

What does this company do?

Macfos Limited, together with its subsidiaries, operates an e-commerce platform for electronic products in India.

IndustryElectronic Components

SectorTechnology

Employees189

Annual revenue₹309 Cr

How does it make money?

Turns over ₹309 Cr a year. Of every ₹100 of sales, about ₹8 reaches shareholders as profit, with ₹13 left at the operating level before interest, tax and depreciation. Each of its 189 employees supports ₹1.63 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.63 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 38.4%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 26.7% 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?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +285% while net margin moved -10% 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+285%

Margin effect-10%

DalalBaazaar Score

60/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.32 — historically steadier than the index
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

64/ 100

Average

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

Valuation

49/ 100

Fair

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

39.8x

3Y Median

57.7x

40 monthly readings · mean 59.5x · range 36.4x–109.4x

Sector Median

16.5x

median of 4 sector peers

🟢Current valuation is approximately 31% below its 3y median of 57.7x. 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 141% above the peer median of 16.5x.

vs. its own history

Cheap

57.7x median over 40 months · -31%

vs. sector peers

Expensive

16.5x median of 4 peers · +141%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

27.9x

PEG

0.78

What's Good / What's Bad

🟢 What's Going Well2

High return on capital employed
ROCE of 38.4% is the mark of a business that converts capital into profit efficiently.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention3

Margins are compressing
EBITDA margin has slipped from 14.4% to 12.6% over 3 years.
Return on equity is falling
ROE has dropped from 44.9% to 26.7% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 53.6% to 38.4% — 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 456% over 3 years, from ₹6 Cr to ₹36 Cr.
🔴Receivables growing faster than salesFinancial
Receivables up 446% against revenue up 285% — sales are being booked faster than they are collected.
🔴Inventory building faster than salesFinancial
Inventory up 378% against revenue up 285% — stock may not be moving.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹11 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 38.4% 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.
Priced below its own history
The stock trades 31% 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?

Margins are being competed away
EBITDA margin has fallen from 14.4% to 12.6%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Sales are being booked faster than collected
Receivables are up 446% against revenue up 285%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
A premium to the sector to defend
It trades 141% above the peer median. That premium needs a reason that persists, or it closes.
Returns on shareholder capital are falling
ROE has dropped from 44.9% to 26.7%. 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.

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

1Revenue growth stays above 43% a year✓ 56.8% CAGR
Latest reported year was 37.2%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 11%✓ 12.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹11 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.9x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 35%✓ 38.4%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

8 / 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

6 good · 3 neutral · 2 weak

Market Cap

₹1,053 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

39.8x

Fair

Fairly valued against the generic band

P/B Ratio

10.98x

Rich

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

EPS (TTM)

₹25.5

Profitable

Profitable on a per-share basis

ROE

26.7%

Strong

Strong capital efficiency

ROCE

38.4%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.38x

Low

Conservative leverage

Revenue Growth (YoY)

37.2%

Healthy

Healthy top-line growth

Profit Growth (YoY)

15.3%

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

-₹11 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

9.6%

Average

Average margins

Net Margin

8.0%

Average

Average bottom-line conversion

Current Ratio

2.12

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.32

Defensive

Steadier than the market

52W Range Position

56%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

1067.2 / 1098.3

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

26.5

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹80 Cr	₹125 Cr	₹255 Cr	₹309 Cr	+56.8%
EBITDA	₹12 Cr	₹17 Cr	₹27 Cr	₹39 Cr	+50.2%
EBITDA Margin	14.4%	13.4%	10.7%	12.6%	—
PAT (Net Profit)	₹7 Cr	₹11 Cr	₹18 Cr	₹26 Cr	+51.2%
EPS	₹7.63	₹11.14	₹17.3	₹24.75	+48.0%
ROE	44.9%	39.6%	25.5%	26.7%	—
ROCE	53.6%	53.6%	36.2%	38.4%	—
Total Debt	₹6 Cr	₹8 Cr	₹20 Cr	₹36 Cr	+77.1%
Free Cash Flow	₹0 Cr	₹2 Cr	-₹28 Cr	-₹11 Cr	—

🟢 Revenue has grown at 56.8% a year over 3 years.

🟢 EBITDA has grown at 50.2% a year over 3 years.

🔴 EBITDA Margin has fallen from 14.4% to 12.6% over 3 years (-1.7 pts).

🟢 PAT (Net Profit) has grown at 51.2% a year over 3 years.

🟢 EPS has grown at 48.0% a year over 3 years.

🔴 ROE has fallen from 44.9% to 26.7% over 3 years (-18.2 pts).

🔴 ROCE has fallen from 53.6% to 38.4% over 3 years (-15.2 pts).

🔴 Total Debt has grown at 77.1% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹0 Cr to -₹11 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹160 Cr

Total Liabilities

₹64 Cr

Cash & Equivalents

₹2 Cr

Operating Cash Flow

-₹8 Cr

Capex

-₹3 Cr

Shareholding (proxy)

Institutional Holding

4.0%

Insider Holding

70.2%

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 positive2 mixed2 general

Macfos Share Price Fall: Technicals Omitted, Fundamentals

Univest, 12 AugPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Get Ready For 1:10 Bonus Shares! Record Date Just 1-Day Away; Buy The Stock For Bonus Issue Allotment?

Goodreturns, 09 MarCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Macfos Limited Earnings Call Reveals Strong FY26 Performance and Strategic Vision

scanx.trade, 29 AprResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Everyone Knows About Swiggy, Zomato, & Nykaa. But Here are 5 Under the Radar Ecommerce Stocks to Watch

Equitymaster, 13 Dec

Macfos Ltd. Share Price: Technical and Fundamental View

Univest, 11 Aug

Macfos consolidated net profit rises 17.14% in the June 2026 quarter

Business Standard, 12 AugResults

🟢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.
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

StrongFinancial Health

MiddlingBusiness Quality · Growth · Profitability · Valuation

WeakRisk

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. 3 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 ↑