R Systems International Limited

Technology — Information Technology Services · NSE

₹261.80+₹3.75 (+1.45%)

DalalBaazaar Score

68 / 100

🟢 Good

Verdict

REASONABLE

Risk

Low

Driven by micro-cap size, which brings thin liquidity, falling profits.

In simple words: Strong business and financial position, though profits are falling even as sales grow. The direction of profits is 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 R Systems International Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

R Systems International Limited, a digital product engineering company, designs and builds chip-to-cloud software products and platforms in Europe, the United States, and internationally. It provides information technology and business process outsourcing services.

IndustryInformation Technology Services

SectorTechnology

Employees5,359

Annual revenue₹1,958 Cr

How does it make money?

Turns over ₹1,958 Cr a year. Of every ₹100 of sales, about ₹10 reaches shareholders as profit, with ₹16 left at the operating level before interest, tax and depreciation. Each of its 5,359 employees supports ₹36.5 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹36.5 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?Some evidence

ROCE of 16.5% 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 ROE32.0%

What is the outlook?

4 analysts covering the stock expect revenue to grow about 8.7% and earnings to grow about 8.8% in the year to 2027. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+8.7%

Est. earnings growth+8.8%

Analysts4

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 +29% while net margin moved +3% 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+29%

Margin effect+3%

DalalBaazaar Score

68/ 100

Good

Weighted across six categories. Every point is explained below.

✓ ROCE of 16.5% is comfortably above a typical cost of capital
✗ ROCE has fallen by 11.1 points — returns are eroding
• EBITDA margin of 16.2% is respectable
• Net margin of 8.6% is reasonable
• Revenue has compounded at 8.9% a year, which is the base these returns are earned on

Quality vs. Valuation

Company Quality

68/ 100

Good

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

Valuation

65/ 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

16.8x

4Y Median

37.8x

44 monthly readings · mean 33.6x · range 15.6x–46.5x

Sector Median

16.5x

median of 4 sector peers

🟢Current valuation is approximately 56% below its 4y median of 37.8x. 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 is priced broadly in line with the peer median of 16.5x.

vs. its own history

Cheap

37.8x median over 44 months · -56%

vs. sector peers

Fair

16.5x median of 4 peers · +2%

vs. generic bands

Fair

15x–35x

EV/EBITDA

10.1x

PEG

1.67

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 13.6% to 16.2% over 3 years.
Cash generation is improving
Free cash flow is up 191% over 3 years.
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 27.6% to 16.5% — often a sign of competition or overexpansion.

Red Flags

2 items require attention · 1 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 431% over 3 years, from ₹77 Cr to ₹410 Cr.
🟡Receivables growing faster than salesFinancial
Receivables up 60% against revenue up 29% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 13.6% to 16.2%. 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 56% 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.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹176 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.
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 60% against revenue up 29%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
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

1EBITDA margin holds above 14%✓ 16.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Revenue growth stays above 7% a year✓ 8.9% CAGR
Latest reported year was 30.5%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
3Free cash flow remains positive✓ ₹176 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.3x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 14%✓ 16.5%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

10 / 12 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
✓ Analyst consensus isn't majority-sell
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

7 good · 3 neutral · 1 weak

Market Cap

₹3,102 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

16.8x

Fair

Fairly valued against the generic band

P/B Ratio

2.82x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹15.57

Profitable

Profitable on a per-share basis

ROE

17.3%

Strong

Strong capital efficiency

ROCE

16.5%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.29x

Low

Conservative leverage

Revenue Growth (YoY)

30.5%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-26.6%

Falling

Profits are shrinking

Dividend Yield

6.11%

Healthy

Meaningful cash return while you hold the stock

Free Cash Flow

₹266 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

11.9x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

ROA

11.5%

Good

Assets are working hard

Operating Margin

14.9%

Average

Average margins

Net Margin

8.6%

Average

Average bottom-line conversion

Current Ratio

2.29

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.26

Defensive

Steadier than the market

52W Range Position

22%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

256.4 / 249.4

Bullish alignment (short > long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

56.8

Neutral momentum

Financial Trend (4-Year)

Metric	FY22	FY23	FY24	FY25	3Y CAGR
Revenue	₹1,516 Cr	₹1,685 Cr	₹1,742 Cr	₹1,958 Cr	+8.9%
EBITDA	₹206 Cr	₹263 Cr	₹265 Cr	₹317 Cr	+15.5%
EBITDA Margin	13.6%	15.6%	15.2%	16.2%	—
PAT (Net Profit)	₹140 Cr	₹140 Cr	₹131 Cr	₹186 Cr	+10.1%
EPS	₹11.81	₹11.84	₹10.59	₹15.01	+8.3%
ROE	25.6%	22.9%	21.0%	23.5%	—
ROCE	27.6%	22.1%	20.9%	16.5%	—
Total Debt	₹77 Cr	₹131 Cr	₹73 Cr	₹410 Cr	+74.5%
Free Cash Flow	₹60 Cr	₹191 Cr	₹223 Cr	₹176 Cr	+42.7%

🟢 Revenue has grown at 8.9% a year over 3 years.

🟢 EBITDA has grown at 15.5% a year over 3 years.

🟢 EBITDA Margin has risen from 13.6% to 16.2% over 3 years (+2.6 pts).

🟢 PAT (Net Profit) has grown at 10.1% a year over 3 years.

🟢 EPS has grown at 8.3% a year over 3 years.

🔴 ROE has fallen from 25.6% to 23.5% over 3 years (-2.1 pts).

🔴 ROCE has fallen from 27.6% to 16.5% over 3 years (-11.1 pts).

🔴 Total Debt has grown at 74.5% a year over 3 years.

🟢 Free Cash Flow has grown at 42.7% a year over 3 years.

Balance Sheet & Cash Flow — FY2025

Total Assets

₹2,102 Cr

Total Liabilities

₹877 Cr

Cash & Equivalents

₹308 Cr

Operating Cash Flow

₹220 Cr

Capex

-₹44 Cr

Shareholding (proxy)

Institutional Holding

9.0%

Insider Holding

73.6%

Corporate Actions

Dividend Rate

₹16

Ex-Dividend Date

01 Oct 2026

Analyst Consensus

Recommendations

4 Buy · 0 Hold · 0 Sell

Target Price (Mean)

₹353.5

+35.0% vs CMP

Target Range

₹300 – ₹410

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

R Systems International (NSEI:RSYSTEMS) Stock Forecast & Analyst Predictions

Simply Wall Street, 02 OctAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Why are R Systems International shares up 28% in 2 days despite weak trends on Dalal Street? Reason, next target price

Livemint, 29 SeptPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

R Systems International Declares Second Interim Dividend Of ₹8 Per Share

Sahi, 25 SeptCapital return

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

R Systems International rallies over 14% as board declares 2nd interim dividend; what investors should know

Upstox, 28 SeptCapital return

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

Is R Systems International the Best Stock in Its Sector? A Look at the Numbers

Univest, 06 Oct

Price Band Hitters, September 28, 2026 at 3:30 PM IST: R Systems Leads Upper Band

HDFC Sky, 28 Sept

Watch Items

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

DalalBaazaar Thesis

StrongFinancial Health · Growth · Profitability · Valuation

MiddlingBusiness Quality · Risk

Points for each in the Score ↑

Good business at a fair price

A sound business at a reasonable valuation. Suitable for a long-term holding, with the valuation and the direction of margins worth watching rather than the business itself. 1 high-severity red flag sits above this conclusion and should be read first.

All 5 tripwires holding · see Key things to watch ↑