Touchwood Entertainment Limited

Communication Services — Advertising Agencies · NSE

₹59.80+₹1.62 (+2.78%)

DalalBaazaar Score

54 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Very High

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

In simple words: Reasonable but unspectacular business quality, but sales are shrinking. Debt is 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 Touchwood Entertainment Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Touchwood Entertainment Limited engages in the provision of wedding and event management services in India.

IndustryAdvertising Agencies

SectorCommunication Services

Annual revenue₹75 Cr

How does it make money?

Turns over ₹75 Cr a year. Of every ₹100 of sales, about ₹5 reaches shareholders as profit, with ₹11 left at the operating level before interest, tax and depreciation.

Who are its competitors?

The closest listed comparisons in its industry are BHARTI AIRTEL LIMITED, VODAFONE IDEA 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 12.4% 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 ROE20.2%

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 +103% while net margin moved -19% 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+103%

Margin effect-19%

DalalBaazaar Score

54/ 100

Moderate

Weighted across six categories. Every point is explained below.

✓ Beta of 0.07 — historically steadier than the index
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ High leverage magnifies any downturn in earnings
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

51/ 100

Average

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

Valuation

84/ 100

Cheap

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

16.3x

3Y Median

32.2x

40 monthly readings · mean 38.3x · range 12.4x–84.1x

Sector Median

21.7x

median of 2 sector peers

🟢Current valuation is approximately 49% below its 3y median of 32.2x. 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 25% below the peer median of 21.7x.

vs. its own history

Cheap

32.2x median over 40 months · -49%

vs. sector peers

Cheap

21.7x median of 2 peers · -25%

vs. generic bands

Fair

15x–35x

EV/EBITDA

6.4x

PEG

0.91

What's Good / What's Bad

🟢 What's Going Well1

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

3 items require attention · 3 high

🔴Debt has risen sharplyFinancial
Total debt is up 1220% over 3 years, from ₹0 Cr to ₹4 Cr.
🔴High leverageFinancial
Debt/Equity of 7.90x — earnings must service borrowings before shareholders see anything.
🔴Free cash flow negative for 3 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 49% 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 25% 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?

Leverage amplifies any setback
Debt/Equity of 7.90x. Interest is payable whether or not the business has a good year.
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
3 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 20% a year✓ 26.7% CAGR
Latest reported year was -76.6%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 9%✓ 11.0%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹1 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.4x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 9%✓ 12.4%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

3 / 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

₹66 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

16.3x

Fair

Fairly valued against the generic band

P/B Ratio

1.46x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹3.66

Profitable

Profitable on a per-share basis

ROE

9.2%

Moderate

Moderate capital efficiency

ROCE

12.4%

Moderate

Moderate return on the capital in the business

Debt/Equity

7.90x

High

High leverage

Revenue Growth (YoY)

-76.6%

Shrinking

Sales are contracting

Profit Growth (YoY)

-69.9%

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

Operating Margin

10.9%

Average

Average margins

Net Margin

5.1%

Average

Average bottom-line conversion

Current Ratio

4.87

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.07

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

59.6 / 61.3

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

40.4

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹37 Cr	₹33 Cr	₹69 Cr	₹75 Cr	+26.7%
EBITDA	₹4 Cr	₹5 Cr	₹8 Cr	₹8 Cr	+28.0%
EBITDA Margin	10.7%	16.4%	11.8%	11.0%	—
PAT (Net Profit)	₹2 Cr	₹3 Cr	₹5 Cr	₹4 Cr	+18.0%
EPS	₹2.42	₹2.97	₹4.68	—	—
ROE	9.7%	9.2%	13.0%	9.2%	—
ROCE	13.6%	12.0%	17.0%	12.4%	—
Total Debt	₹0 Cr	₹2 Cr	₹1 Cr	₹4 Cr	+136.3%
Free Cash Flow	₹2 Cr	-₹5 Cr	-₹3 Cr	-₹1 Cr	—

🟢 Revenue has grown at 26.7% a year over 3 years.

🟢 EBITDA has grown at 28.0% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 11.0% over 3 years.

🟢 PAT (Net Profit) has grown at 18.0% a year over 3 years.

🟡 ROE has held roughly flat at 9.2% over 3 years.

🔴 ROCE has fallen from 13.6% to 12.4% over 3 years (-1.2 pts).

🔴 Total Debt has grown at 136.3% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹2 Cr to -₹1 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹57 Cr

Total Liabilities

₹13 Cr

Cash & Equivalents

₹17 Cr

Operating Cash Flow

₹4 Cr

Capex

-₹5 Cr

Corporate Actions

Ex-Dividend Date

20 Sept 2024

Peer Comparison

Company	P/E	ROE
BHARTI AIRTEL LIMITED	39.8x	20.2%
VODAFONE IDEA LIMITED	3.6x	—

Recent News

1 mixed5 general

Touchwood Entertainment Ltd (TOUCHWOOD) Share Price

Business Today, 05 Oct

Touchwood Entertainment Share: Bull Case vs Bear Case for 2026

Univest, 28 Sept

Touchwood Entertainment incorporates TouchTown Ventures

scanx.trade, 16 Jun

Touchwood Entertainment NSE:TOUCHWOOD Reg 74(5) Q2 Certificate

Kalkine India, 12 OctResults

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

Touchwood Entertainment Ltd. Key Financial Ratios – Valuation, Profitability & More

Value Research, 03 Sept

Touchwood Entertainment Share Price Outlook: Where It Could Be in 3 Years

Univest, 04 Aug

Watch Items

Revenue growth is negative (-76.6%) on the latest reported period — check if this is one-off or a trend.
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.

DalalBaazaar Thesis

StrongValuation

MiddlingBusiness Quality · Financial Health · Growth

WeakProfitability · 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.

1 of 5 tripwires tripped — Free cash flow remains positive · see Key things to watch ↑