TVS Electronics Limited

Technology — Computer Hardware · NSE

₹391.80+₹19.50 (+5.24%)

DalalBaazaar Score

34 / 100

🔴 Weak

Verdict

CAUTION

Risk

High

Driven by the company is currently loss-making, micro-cap size, which brings thin liquidity.

In simple words: The company is currently losing money, 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, 6:07 pm

Caution warranted. Multiple fundamental metrics — flagged in red below — point to either valuation stretch, leverage risk, or weakening profitability. This doesn't mean avoid the stock outright, but it does mean the burden of proof is on the growth story to justify the current price.

Understanding the Business

Company site ↗

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

What does this company do?

TVS Electronics Limited, through its subsidiaries, operates as an integrated technology solutions company in India. It operates in two segments, Products & Solutions, and Customer Support Services.

IndustryComputer Hardware

SectorTechnology

Employees982

Annual revenue₹455 Cr

How does it make money?

Turns over ₹455 Cr a year. Of every ₹100 of sales, about ₹0 reaches shareholders as profit, with ₹6 left at the operating level before interest, tax and depreciation. Each of its 982 employees supports ₹46.3 lakh of revenue a year, the signature of a people-led business.

EBITDA margin5.8%

Net margin0.3%

Revenue / employee₹46.3 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.

TATA CONSULTANCY SERV LTP/E 17.3x · ROE 45.6%

INFOSYS LIMITEDP/E 15.8x · ROE 32.0%

HCL TECHNOLOGIES LTDP/E 20.4x · ROE 24.6%

WIPRO LTDP/E 14.5x · ROE 15.9%

What is its competitive advantage?Little sign of one

Returns on capital of 6.8% 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.

ROCE6.8%

ROE1.3%

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 +29% while net margin moved -90% 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+29%

Margin effect-90%

DalalBaazaar Score

34/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ No meaningful P/E — the company is lossmaking
✗ P/B of 7.62x is a steep premium to book

Quality vs. Valuation

Company Quality

35/ 100

Weak

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

Valuation

20/ 100

Expensive

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

Weak on business quality and not cheap enough to compensate.

vs. its own history

Not enough price and earnings history

vs. sector peers

Not enough peers with a usable P/E

vs. generic bands

N/A

No P/E — the company is lossmaking

P/E (Trailing)

Not meaningful

P/B

7.62x

EV/EBITDA

30.1x

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well1

Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.

🔴 What Needs Attention4

Debt is rising
Total debt is up 293% over 3 years — worth checking what it funded.
Return on equity is falling
ROE has dropped from 9.4% to 1.3% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 12.8% to 6.8% — often a sign of competition or overexpansion.
Receivables growing faster than sales
Receivables are up 105% against revenue growth of 29% — customers are taking longer to pay.

Red Flags

5 items require attention · 4 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 293% over 3 years, from ₹14 Cr to ₹54 Cr.
🔴Thin interest coverageFinancial
Operating profit covers interest only 1.1x — little room if earnings dip.
🔴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 105% against revenue up 29% — sales are being booked faster than they are collected.
🟡Profit is decliningFinancial
Net profit is down 87% over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

No clear supporting case emerges from the available numbers.

🔴 Bear CaseWhat could go wrong?

Sales are being booked faster than collected
Receivables are up 105% against revenue up 29%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Returns on shareholder capital are falling
ROE has dropped from 9.4% to 1.3%. 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.
Several serious flags at once
4 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

1EBITDA margin holds above 4%✓ 5.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA stays below 2x✗ 2.1x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
3Interest cover stays above 3x✗ 1.1x
How much operating profit can fall before interest stops being comfortably covered.
4Revenue growth stays above 7% a year✓ 8.8% CAGR
Latest reported year was 9.6%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
5Free cash flow remains positive✓ ₹1 Cr
Profit that never becomes cash eventually stops being profit.

Investment Checklist

7 / 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

3 good · 3 neutral · 5 weak

Market Cap

₹737 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

Not meaningful

Loss-making

Earnings are negative, so a P/E multiple can't be read here

P/B Ratio

7.62x

Rich

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

EPS (TTM)

₹-0.97

Loss-making

Negative earnings per share — the business is losing money

ROE

1.3%

Weak

Weak capital efficiency

ROCE

6.8%

Weak

Low return on total capital employed

Debt/Equity

0.56x

Low

Conservative leverage

Revenue Growth (YoY)

9.6%

Modest

Modest growth

Profit Growth (YoY)

132.5%

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

₹1 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹391.8

Operating Margin

-6.0%

Weak

Thin margins leave little room for error

Net Margin

-0.4%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.18

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.75

Defensive

Steadier than the market

52W Range Position

14%

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

389.2 / 417.9

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

53.5

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹353 Cr	₹366 Cr	₹430 Cr	₹455 Cr	+8.8%
EBITDA	₹20 Cr	₹10 Cr	₹13 Cr	₹26 Cr	+9.1%
EBITDA Margin	5.7%	2.9%	3.0%	5.8%	—
PAT (Net Profit)	₹10 Cr	₹0 Cr	-₹4 Cr	₹1 Cr	-49.0%
EPS	₹5.11	₹0.15	₹-2.08	₹0.67	-49.2%
ROE	9.4%	0.3%	-4.1%	1.3%	—
ROCE	12.8%	1.1%	-1.3%	6.8%	—
Total Debt	₹14 Cr	₹40 Cr	₹43 Cr	₹54 Cr	+57.8%
Free Cash Flow	-₹24 Cr	-₹14 Cr	-₹2 Cr	₹1 Cr	—

🟢 Revenue has grown at 8.8% a year over 3 years.

🟢 EBITDA has grown at 9.1% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 5.8% over 3 years.

🔴 PAT (Net Profit) has shrunk at 49.0% a year over 3 years.

🔴 EPS has shrunk at 49.2% a year over 3 years.

🔴 ROE has fallen from 9.4% to 1.3% over 3 years (-8.0 pts).

🔴 ROCE has fallen from 12.8% to 6.8% over 3 years (-6.0 pts).

🔴 Total Debt has grown at 57.8% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹24 Cr to ₹1 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹283 Cr

Total Liabilities

₹187 Cr

Total Debt

₹54 Cr

Cash & Equivalents

₹2 Cr

Operating Cash Flow

₹6 Cr

Capex

-₹5 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

66.4%

Corporate Actions

Ex-Dividend Date

02 Aug 2024

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 positive1 mixed4 general

TVS Electronics (NSEI:TVSELECT) - Stock Analysis

Simply Wall Street, 14 Oct

TVS Electronics (TVSELECT) Share/Stock Price Live, NSE

TechGraph, 08 Oct

TVS Electronics Signs Cybersecurity Alliance; Shares Gain

HDFC Sky, 14 JulPrice 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.

TVS Electronics discloses ₹7.82 Cr GST demand from Karnataka authority

scanx.trade, 28 Sept

TVS Electronics Share: Bull Case vs Bear Case for 2026

Univest, 28 Sept

TVS Electronics Q4 Net Profit Jumps to ₹2.9 Cr as EBITDA Margin Surges to 7.71%

Sahi, 25 MayResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🔴Business QualityWeak4.7/20

🟡Financial HealthAdequate10.7/20

🔴GrowthWeak7.7/20

🔴ProfitabilityWeak3.4/15

🔴ValuationDemanding2.6/15

🔴RiskHigh4.4/10

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation. 4 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above 4%5.8%
✗Debt / EBITDA stays below 2x2.1x
✗Interest cover stays above 3x1.1x
✓Revenue growth stays above 7% a year8.8% CAGR
✓Free cash flow remains positive₹1 Cr