Sancode Technologies Limited

Industrials — Consulting Services · BSE

₹936.60−₹19.10 (−2.00%)

DalalBaazaar Score

43 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

Driven by negative free cash flow, micro-cap size, which brings thin liquidity, a very high earnings multiple, which leaves little margin for disappointment.

In simple words: The business is earning a fairly low return on the money invested in it, though profits are falling even as sales grow. 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 Sancode Technologies Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Sancode Technologies Limited provides technology and software-related services in India. The company offers digital transformation, workflow automation, artificial intelligence and machine learning, robotic process automation and data analytics, and system integration.

IndustryConsulting Services

SectorIndustrials

Employees5

Annual revenue₹16 Cr

How does it make money?

Turns over ₹16 Cr a year. Of every ₹100 of sales, about ₹3 reaches shareholders as profit, with ₹4 left at the operating level before interest, tax and depreciation. Each of its 5 employees supports ₹3.15 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹3.15 Cr

Who are its competitors?

The closest listed comparisons in its industry are LARSEN & TOUBRO LTD., SIEMENS LTD, ABB 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?Little sign of one

Returns on capital of 7.2% 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 ROE15.2%

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 +914% while net margin moved -92% 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+914%

Margin effect-92%

DalalBaazaar Score

43/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ P/E of 836.3x is demanding — it needs sustained high growth to justify
✗ P/E is 1323% above its own historical median of 58.7x — expensive by its own standards
✗ P/B of 49.98x is a steep premium to book

Quality vs. Valuation

Company Quality

47/ 100

Average

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

Valuation

23/ 100

Expensive

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

836.3x

3Y Median

58.7x

40 monthly readings · mean 100.7x · range 24.3x–450.3x

Sector Median

88.8x

median of 3 sector peers

⚠️Current valuation is approximately 1323% above its 3y median of 58.7x. 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 841% above the peer median of 88.8x.

vs. its own history

Expensive

58.7x median over 40 months · +1323%

vs. sector peers

Expensive

88.8x median of 3 peers · +841%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

1037.5x

PEG

—

What's Good / What's Bad

🟢 What's Going Well2

Return on capital is rising
ROCE has improved from 0.7% to 7.2%.
Very low debt
Debt/Equity of 0.24x leaves the balance sheet with plenty of headroom.

🔴 What Needs Attention1

Return on equity is falling
ROE has dropped from 18.1% to 6.1% — each rupee of shareholder capital earns less than it did.

Red Flags

1 item require attention · 1 high

🔴Debt has risen sharplyFinancial
Total debt is up 3185% over 3 years, from ₹0 Cr to ₹2 Cr.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Self-funding with balance-sheet headroom
Positive free cash flow of ₹0 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.

🔴 Bear CaseWhat could go wrong?

The price already assumes success
The stock trades 1323% 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.
Returns on shareholder capital are falling
ROE has dropped from 18.1% to 6.1%. 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.
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.

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

1Revenue growth stays above 87% a year✓ 116.4% CAGR
Latest reported year was 3.2%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 2%✓ 4.3%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA stays below 2x✗ 2.7x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4Free cash flow remains positive✓ ₹0 Cr
Profit that never becomes cash eventually stops being profit.
5ROCE stays above 8%✗ 7.2%
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 · 3 neutral · 6 weak

Market Cap

₹698 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

836.3x

Expensive

Expensive — verify against sector peers

P/B Ratio

49.98x

Rich

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

EPS (TTM)

₹1.12

Profitable

Profitable on a per-share basis

ROE

7.3%

Weak

Weak capital efficiency

ROCE

7.2%

Weak

Low return on total capital employed

Debt/Equity

0.24x

Low

Conservative leverage

Revenue Growth (YoY)

3.2%

Modest

Modest growth

Profit Growth (YoY)

-63.4%

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

-₹1 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

ROA

2.9%

Weak

Assets generate little profit

Operating Margin

8.2%

Average

Average margins

Net Margin

3.0%

Weak

Very little revenue reaches the bottom line

Current Ratio

3.81

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

-0.34

Defensive

Steadier than the market

52W Range Position

98%

Near high

Near its 52-week high

Technical Snapshot

SMA 20 / SMA 50

833.0 / 676.5

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

90.7

Overbought zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹2 Cr	₹5 Cr	₹14 Cr	₹16 Cr	+116.4%
EBITDA	₹0 Cr	-₹1 Cr	₹0 Cr	₹1 Cr	+104.7%
EBITDA Margin	5.0%	-31.2%	1.9%	4.3%	—
PAT (Net Profit)	₹1 Cr	-₹2 Cr	₹0 Cr	₹0 Cr	-5.2%
EPS	₹1.34	₹-4.36	₹2.08	—	—
ROE	18.1%	-34.3%	8.9%	6.1%	—
ROCE	0.7%	-25.7%	7.7%	7.2%	—
Total Debt	₹0 Cr	₹0 Cr	₹1 Cr	₹2 Cr	+220.3%
Free Cash Flow	₹1 Cr	-₹3 Cr	-₹3 Cr	₹0 Cr	-47.2%

🟢 Revenue has grown at 116.4% a year over 3 years.

🟢 EBITDA has grown at 104.7% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 4.3% over 3 years.

🔴 PAT (Net Profit) has shrunk at 5.2% a year over 3 years.

🔴 ROE has fallen from 18.1% to 6.1% over 3 years (-11.9 pts).

🟢 ROCE has risen from 0.7% to 7.2% over 3 years (+6.4 pts).

🔴 Total Debt has grown at 220.3% a year over 3 years.

🔴 Free Cash Flow has shrunk at 47.2% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹10 Cr

Total Liabilities

₹3 Cr

Cash & Equivalents

₹3 Cr

Operating Cash Flow

₹0 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

87.7%

Peer Comparison

Company	P/E	ROE
LARSEN & TOUBRO LTD.	30.1x	15.2%
SIEMENS LTD	88.8x	10.5%
ABB INDIA LIMITED	92.6x	19.1%

Recent News

6 general

Sancode Technologies Lower Circuit Today: Price, Data and Peers

Univest, 16 Oct

Sancode Technologies appoints Jerry A. Agnes as CEO of subsidiary Sancode Semi

scanx.trade, 12 Oct

Sancode Technologies Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 30 Aug

Sancode Technologies Upper Circuit Streak: Day 4 Price and Data

Univest, 13 Oct

Sancode Technologies Ltd Hits All-Time High of Rs 867 as Momentum Builds Across Timeframes

MarketsMojo, 08 Oct

Promoters raise stake in Sancode Technologies via preferential allotment

scanx.trade, 20 Jul

Watch Items

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

WeakBusiness Quality · Growth · Profitability · Valuation · 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. 1 high-severity red flag sits above this conclusion and should be read first.

2 of 5 tripwires tripped — Debt / EBITDA stays below 2x; ROCE stays above 8% · see Key things to watch ↑