Subex Limited

Technology — Software - Application · NSE

₹19.05+₹0.58 (+3.14%)

DalalBaazaar Score

54 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

High

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

In simple words: Reasonable but unspectacular business quality, with both sales and profits growing well. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:03 pm

Understanding the Business

Company site ↗

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

What does this company do?

Subex Limited engages in the provision of operations and business support systems to communication service providers (CSPs) worldwide.

IndustrySoftware - Application

SectorTechnology

Employees626

Annual revenue₹279 Cr

How does it make money?

Turns over ₹279 Cr a year. Of every ₹100 of sales, about ₹10 reaches shareholders as profit, with ₹19 left at the operating level before interest, tax and depreciation. Each of its 626 employees supports ₹44.6 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹44.6 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?Little sign of one

Returns on capital of 9.2% 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 ROE32.0%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +0% while net margin moved -156% 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+0%

Margin effect-156%

DalalBaazaar Score

54/ 100

Moderate

Weighted across six categories. Every point is explained below.

• Beta of 0.93 — moves roughly with the market
✗ 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

Quality vs. Valuation

Company Quality

58/ 100

Average

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

Valuation

30/ 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

35.3x

Sector Median

16.5x

median of 4 sector peers

⚠️Against its sector it trades 113% above the peer median of 16.5x.

vs. its own history

Not enough price and earnings history

vs. sector peers

Expensive

16.5x median of 4 peers · +113%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

19.3x

PEG

2.71

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from -1.8% to 18.6% over 3 years.
Debt is being paid down
Total debt is down 15% over 3 years.
Cash generation is improving
Free cash flow is up 1478% over 3 years.
Return on equity is rising
ROE has improved from -9.8% to 8.3%.
Return on capital is rising
ROCE has improved from -6.0% to 9.2%.

🔴 What Needs Attention0

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

Red Flags

2 items require attention · 1 high · 1 watch

🔴High leverageFinancial
Debt/Equity of 8.25x — earnings must service borrowings before shareholders see anything.
🟡Low reported insider holdingOwnership
Reported insider holding is 1.3%. For Indian companies this field is an unreliable proxy — check the official promoter shareholding in the exchange filing.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from -1.8% to 18.6%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Deleveraging frees up earnings
Debt is down 15% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.

🔴 Bear CaseWhat could go wrong?

Leverage amplifies any setback
Debt/Equity of 8.25x. Interest is payable whether or not the business has a good year.
A premium to the sector to defend
It trades 113% above the peer median. That premium needs a reason that persists, or it closes.
Growth barely outpaces inflation
Revenue compounding at 0.0% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
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

1EBITDA margin holds above 17%✓ 18.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Revenue growth stays above 4% a year✗ 0.0% CAGR
Latest reported year was 19.7%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
3Free cash flow remains positive✓ ₹68 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.5x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 8%✓ 9.2%
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

4 good · 6 neutral · 1 weak

Market Cap

₹1,057 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

35.3x

Fair

Fairly valued against the generic band

P/B Ratio

3.08x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹0.54

Profitable

Profitable on a per-share basis

ROE

8.3%

Moderate

Moderate capital efficiency

ROCE

9.2%

Moderate

Moderate return on the capital in the business

Debt/Equity

8.25x

High

High leverage

Revenue Growth (YoY)

19.7%

Healthy

Healthy top-line growth

Profit Growth (YoY)

13.0%

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

₹68 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

15.6%

Good

Healthy core-business profitability

Net Margin

10.3%

Good

Strong bottom-line conversion

Current Ratio

2.64

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.93

Market-like

Moves roughly in line with the market

52W Range Position

77%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

19.7 / 18.1

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

32.1

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹279 Cr	₹310 Cr	₹286 Cr	₹279 Cr	+0.0%
EBITDA	-₹5 Cr	-₹151 Cr	₹13 Cr	₹52 Cr	—
EBITDA Margin	-1.8%	-48.9%	4.5%	18.6%	—
PAT (Net Profit)	-₹51 Cr	-₹192 Cr	-₹31 Cr	₹29 Cr	—
EPS	₹-0.93	₹-3.47	₹-0.57	₹0.51	—
ROE	-9.8%	-57.5%	-10.3%	8.3%	—
ROCE	-6.0%	-40.6%	-4.6%	9.2%	—
Total Debt	₹33 Cr	₹28 Cr	₹19 Cr	₹28 Cr	-5.4%
Free Cash Flow	₹4 Cr	-₹11 Cr	₹7 Cr	₹68 Cr	+150.8%

🟡 Revenue has been broadly flat over 3 years (0.0% a year).

🟢 EBITDA has turned positive, from -₹5 Cr to ₹52 Cr.

🟢 EBITDA Margin has risen from -1.8% to 18.6% over 3 years (+20.4 pts).

🟢 PAT (Net Profit) has turned positive, from -₹51 Cr to ₹29 Cr.

🟢 EPS has turned positive, from ₹-0.93 to ₹0.51.

🟢 ROE has risen from -9.8% to 8.3% over 3 years (+18.1 pts).

🟢 ROCE has risen from -6.0% to 9.2% over 3 years (+15.1 pts).

🟢 Total Debt has shrunk at 5.4% a year over 3 years.

🟢 Free Cash Flow has grown at 150.8% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹552 Cr

Total Liabilities

₹209 Cr

Cash & Equivalents

₹82 Cr

Operating Cash Flow

₹72 Cr

Capex

-₹4 Cr

Shareholding (proxy)

Institutional Holding

0.6%

Insider Holding

1.3%

Corporate Actions

Ex-Dividend Date

01 Jul 2021

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

1 positive3 mixed2 general

Subex Ltd. Share Price Gain: Price Action and Valuation

Univest, 18 AugPrice 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.

Subex share price jumps 9% after European deal win; key details

Business Today, 21 AugPrice 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.

Subex Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 29 Aug

Subex Q1 Net Profit Increases To ₹14.22 Crore; Revenue Climbs To ₹79.45 Crore

Sahi, 06 AugResults

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

Subex Wins US$5 Million APAC Telecom Deal; Shares Rise 14.15%

HDFC Sky, 23 SeptOrder win

🟢Potentially positiveAn order or contract win, which adds to future revenue. How much depends on its size against annual sales and on when it is executed.

Subex (NSE:SUBEXLTD shareholders incur further losses as stock declines 15% this week, taking three-year losses to 74%

Simply Wall Street, 24 Jan

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
Reported insider holding is low — cross-check the official promoter shareholding % in the company's exchange filing.

DalalBaazaar Thesis

StrongFinancial Health

MiddlingBusiness Quality · Profitability · Valuation

WeakGrowth · 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.

1 of 5 tripwires tripped — Revenue growth stays above 4% a year · see Key things to watch ↑