Shradha AI Technologies Limited

Technology — Electronics & Computer Distribution · BSE

₹19.91−₹0.38 (−1.87%)

DalalBaazaar Score

70 / 100

🟢 Good

Verdict

REASONABLE

Risk

Moderate

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

In simple words: Strong business and financial position, with modest growth. Thin profit margins are the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:00 pm

Understanding the Business

Company site ↗

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

What does this company do?

Shradha AI Technologies Limited provides solutions to the complex information management requirements. It offers IT consulting, mobile app development, website development, and data analytics services.

IndustryElectronics & Computer Distribution

SectorTechnology

Annual revenue₹19 Cr

How does it make money?

Turns over ₹19 Cr a year. Of every ₹100 of sales, about ₹56 reaches shareholders as profit, with ₹76 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?Some evidence

ROCE of 21.1% 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 has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +262% while net margin moved +310% 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+262%

Margin effect+310%

DalalBaazaar Score

70/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast

Quality vs. Valuation

Company Quality

74/ 100

Good

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

Valuation

83/ 100

Cheap

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

A good business currently available at an undemanding price — the combination this framework is built to look for.

Historical Valuation

Current P/E

13.0x

3Y Median

42.2x

39 monthly readings · mean 163.9x · range 11.5x–721.7x

Sector Median

16.5x

median of 4 sector peers

🟢Current valuation is approximately 69% below its 3y median of 42.2x. 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 21% below the peer median of 16.5x.

vs. its own history

Cheap

42.2x median over 39 months · -69%

vs. sector peers

Cheap

16.5x median of 4 peers · -21%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

8.4x

PEG

0.09

What's Good / What's Bad

🟢 What's Going Well6

Margins are improving
EBITDA margin is up from 19.4% to 76.0% over 3 years.
Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
Return on equity is rising
ROE has improved from 1.7% to 16.1%.
Return on capital is rising
ROCE has improved from 2.5% to 21.1%.
High return on capital employed
ROCE of 21.1% 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 Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

2 items require attention · 2 high

🔴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 1582% against revenue up 262% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 21.1% 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 19.4% to 76.0%. 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 69% 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 21% 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?

Sales are being booked faster than collected
Receivables are up 1582% against revenue up 262%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
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 40% a year✓ 53.6% CAGR
Latest reported year was 27.5%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 74%✓ 76.0%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✓ ₹0 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.0x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 18%✓ 21.1%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

9 / 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

7 good · 4 neutral · 0 weak

Market Cap

₹121 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

13.0x

Cheap

Cheap against the generic band

P/B Ratio

Not available

No data

Source didn't return this field

EPS (TTM)

₹1.53

Profitable

Profitable on a per-share basis

ROE

16.1%

Strong

Strong capital efficiency

ROCE

21.1%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.64x

Moderate

Moderate leverage

Revenue Growth (YoY)

27.5%

Healthy

Healthy top-line growth

Profit Growth (YoY)

8.8%

Modest

Slow profit growth

Dividend Yield

3.01%

Healthy

Meaningful cash return while you hold the stock

Free Cash Flow

₹0 Cr

Cash generative

Generates cash even after funding its capex

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

15.48

Comfortable

Healthy short-term liquidity

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

20.2 / 22.2

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

48.0

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹5 Cr	₹17 Cr	₹15 Cr	₹19 Cr	+53.6%
EBITDA	₹1 Cr	₹9 Cr	₹13 Cr	₹14 Cr	+141.9%
EBITDA Margin	19.4%	50.5%	85.6%	76.0%	—
PAT (Net Profit)	₹1 Cr	₹6 Cr	₹10 Cr	₹11 Cr	+145.9%
EPS	₹0.12	₹1.05	₹1.58	₹1.73	+145.8%
ROE	1.7%	11.4%	11.1%	16.1%	—
ROCE	2.5%	15.1%	13.8%	21.1%	—
Total Debt	—	₹0 Cr	₹0 Cr	₹0 Cr	—
Free Cash Flow	-₹2 Cr	₹3 Cr	₹9 Cr	₹0 Cr	—

🟢 Revenue has grown at 53.6% a year over 3 years.

🟢 EBITDA has grown at 141.9% a year over 3 years.

🟢 EBITDA Margin has risen from 19.4% to 76.0% over 3 years (+56.5 pts).

🟢 PAT (Net Profit) has grown at 145.9% a year over 3 years.

🟢 EPS has grown at 145.8% a year over 3 years.

🟢 ROE has risen from 1.7% to 16.1% over 3 years (+14.4 pts).

🟢 ROCE has risen from 2.5% to 21.1% over 3 years (+18.6 pts).

🟢 Free Cash Flow has turned positive, from -₹2 Cr to ₹0 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹69 Cr

Total Liabilities

₹3 Cr

Cash & Equivalents

₹1 Cr

Operating Cash Flow

₹1 Cr

Capex

-₹1 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

80.4%

Corporate Actions

Dividend Rate

₹0.6

Ex-Dividend Date

21 Aug 2026

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 positive4 general

Top 15 Low-Price Stocks In India To Buy In October 2026

Samco, 17 Oct

Shradha AI Technologies Ltd Falls to 52-Week Low of Rs 19.5 as Sell-Off Deepens

MarketsMojo, 07 Oct

Compare with

Equitymaster, 11 Oct

Shradha AI Technologies recommends ₹0.50 per share final dividend for FY26

scanx.trade, 17 AugCapital return

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

Stock Market Live Updates: Market Ends Mildly Lower, Sensex Dips 200 Points, Nifty ABove 24,600

Goodreturns, 15 Oct

Dividend, rights issue record date: Last chance to buy today - Shivam Autotech, Shraddha Prime, Anand Rathi Wealth

Livemint, 13 OctCapital return

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

Watch Items

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

StrongBusiness Quality · Financial Health · Growth · Profitability · Valuation

WeakRisk

Points for each in the Score ↑

Attractive on both counts

A good business currently available at an undemanding price — the combination this framework exists to look for. The work left is qualitative: whether the advantage the numbers imply is one you can identify and expect to last. 2 high-severity red flags sit above this conclusion and should be read first.

All 5 tripwires holding · see Key things to watch ↑