Swelect Energy Systems Limited

Technology — Solar · NSE

₹630.00+₹3.65 (+0.58%)

DalalBaazaar Score

59 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

Driven by moderate debt load, negative free cash flow, micro-cap size, which brings thin liquidity.

In simple words: The business is earning a fairly low return on the money invested in it, but sales are shrinking. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:02 pm

Understanding the Business

Company site ↗

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

What does this company do?

Swelect Energy Systems Limited engages in the manufacture and trading of solar mounting structures, solar photovoltaic inverters**and other ancillary products in India.

IndustrySolar

SectorTechnology

Employees354

Annual revenue₹649 Cr

How does it make money?

Turns over ₹649 Cr a year. Of every ₹100 of sales, about ₹9 reaches shareholders as profit, with ₹26 left at the operating level before interest, tax and depreciation. Each of its 354 employees supports ₹1.83 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.83 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?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 +175% while net margin moved +262% 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+175%

Margin effect+262%

DalalBaazaar Score

59/ 100

Moderate

Weighted across six categories. Every point is explained below.

✓ Beta of 0.72 — historically steadier than the index
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

57/ 100

Average

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

22.6x

3Y Median

74.7x

40 monthly readings · mean 93.8x · range 12.3x–311.9x

Sector Median

16.5x

median of 4 sector peers

🟢Current valuation is approximately 70% below its 3y median of 74.7x. 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 36% above the peer median of 16.5x.

vs. its own history

Cheap

74.7x median over 40 months · -70%

vs. sector peers

Expensive

16.5x median of 4 peers · +36%

vs. generic bands

Fair

15x–35x

EV/EBITDA

10.3x

PEG

0.20

What's Good / What's Bad

🟢 What's Going Well3

Return on equity is rising
ROE has improved from 0.7% to 6.0%.
Return on capital is rising
ROCE has improved from 5.6% to 9.2%.
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

4 items require attention · 3 high · 1 watch

🔴Free cash flow negative for 4 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴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.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 11.9 points, from 37.8% to 25.9%.
🟡Debt is increasingFinancial
Total debt is up 45% over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 70% 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 37.8% to 25.9%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The debt load needs earnings to hold up
Debt is 4.7x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
A premium to the sector to defend
It trades 36% above the peer median. That premium needs a reason that persists, or it closes.
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 30% a year✓ 40.0% CAGR
Latest reported year was -26.2%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 24%✓ 25.9%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA falls below 3x✗ 4.7x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
4Free cash flow remains positive✗ -₹146 Cr
Profit that never becomes cash eventually stops being profit.
5Interest cover stays above 3x✗ 2.3x
How much operating profit can fall before interest stops being comfortably covered.

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 · 5 neutral · 4 weak

Market Cap

₹979 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

22.6x

Fair

Fairly valued against the generic band

P/B Ratio

1.04x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹27.92

Profitable

Profitable on a per-share basis

ROE

6.0%

Weak

Weak capital efficiency

ROCE

9.2%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.84x

Moderate

Moderate leverage

Revenue Growth (YoY)

-26.2%

Shrinking

Sales are contracting

Profit Growth (YoY)

-66.7%

Falling

Profits are shrinking

Dividend Yield

0.56%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

-₹146 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

12.0%

Average

Average margins

Net Margin

6.8%

Average

Average bottom-line conversion

Current Ratio

1.49

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.72

Defensive

Steadier than the market

52W Range Position

40%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

596.5 / 602.5

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

65.0

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹236 Cr	₹237 Cr	₹614 Cr	₹649 Cr	+40.0%
EBITDA	₹89 Cr	₹99 Cr	₹117 Cr	₹168 Cr	+23.5%
EBITDA Margin	37.8%	41.9%	19.1%	25.9%	—
PAT (Net Profit)	₹6 Cr	₹62 Cr	₹13 Cr	₹55 Cr	+115.1%
EPS	₹4.23	₹41.59	₹8.31	₹36.36	+104.8%
ROE	0.7%	7.4%	1.5%	6.0%	—
ROCE	5.6%	9.9%	7.8%	9.2%	—
Total Debt	₹550 Cr	₹569 Cr	₹629 Cr	₹798 Cr	+13.2%
Free Cash Flow	-₹20 Cr	-₹38 Cr	-₹7 Cr	-₹146 Cr	—

🟢 Revenue has grown at 40.0% a year over 3 years.

🟢 EBITDA has grown at 23.5% a year over 3 years.

🔴 EBITDA Margin has fallen from 37.8% to 25.9% over 3 years (-11.9 pts).

🟢 PAT (Net Profit) has grown at 115.1% a year over 3 years.

🟢 EPS has grown at 104.8% a year over 3 years.

🟢 ROE has risen from 0.7% to 6.0% over 3 years (+5.3 pts).

🟢 ROCE has risen from 5.6% to 9.2% over 3 years (+3.7 pts).

🔴 Total Debt has grown at 13.2% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹2,083 Cr

Total Liabilities

₹1,128 Cr

Cash & Equivalents

₹36 Cr

Operating Cash Flow

₹95 Cr

Capex

-₹242 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

62.2%

Corporate Actions

Dividend Rate

₹3.5

Ex-Dividend Date

24 Jul 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

3 mixed3 general

Swelect Energy Systems Share Price - Live NSE: SWELECTES Stock Price & Chart

Upstox, 16 Oct

Swelect Energy Systems (SWELECTES.NS) Steadies Near ₹596 as Solar Theme Holds Ground - Bullish Sentiment

https://www.siam.in/, 05 OctAnalyst view

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

Swelect Energy Systems Share Price: 8.02% Fall Analysis

Univest, 14 Aug

Swelect Energy Systems' (NSE:SWELECTES) Earnings Are Of Questionable Quality

Simply Wall Street, 17 JulResults

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

Swelect Energy Systems Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 28 Aug

Swelect Energy Systems closes trading window ahead of Q2FY27 results

scanx.trade, 28 SeptResults

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

Watch Items

Revenue growth is negative (-26.2%) on the latest reported period — check if this is one-off or a trend.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongGrowth · Valuation

MiddlingBusiness Quality · Profitability

WeakFinancial Health · 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. 3 high-severity red flags sit above this conclusion and should be read first.

3 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Free cash flow remains positive; Interest cover stays above 3x · see Key things to watch ↑