Universal Arts Limited

Communication Services — Entertainment · BSE

₹5.00−₹0.05 (−0.99%)

DalalBaazaar Score

47 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

Driven by negative free cash flow, micro-cap size, which brings thin liquidity, a very high earnings multiple, which leaves little margin for disappointment.

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, 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 Universal Arts Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Universal Arts Limited sells films and TV serials in India. It engages in the business of media, such as editing TV serials; feature films production; and television software, etc.; as well as trades in film rights.

IndustryEntertainment

SectorCommunication Services

Employees3

Annual revenue₹0 Cr

How does it make money?

Turns over ₹0 Cr a year. Of every ₹100 of sales, about ₹3993 reaches shareholders as profit, with ₹-8268 left at the operating level before interest, tax and depreciation. Each of its 3 employees supports ₹8,577 of revenue a year, the signature of a people-led business.

EBITDA margin-8268.3%

Net margin3992.7%

Revenue / employee₹8,577

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.

BHARTI AIRTEL LIMITEDP/E 39.8x · ROE 20.2%

VODAFONE IDEA LIMITEDP/E 3.6x · ROE —

What is its competitive advantage?Little sign of one

Returns on capital of 2.1% 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.

ROCE2.1%

ROE0.6%

Peer median ROE20.2%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -96% while net margin moved -1524% 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-96%

Margin effect-1524%

DalalBaazaar Score

47/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 66.7% a year
✗ Profit fell 31.8% in the latest year

Quality vs. Valuation

Company Quality

49/ 100

Average

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

Valuation

31/ 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

100.0x

2Y Median

32.0x

28 monthly readings · mean 27.8x · range 10.9x–56.0x

Sector Median

21.7x

median of 2 sector peers

⚠️Current valuation is approximately 212% above its 2y median of 32.0x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

⚠️Against its sector it trades 360% above the peer median of 21.7x.

vs. its own history

Expensive

32.0x median over 28 months · +212%

vs. sector peers

Expensive

21.7x median of 2 peers · +360%

vs. generic bands

Expensive

Above 35x

P/E (Trailing)

100.0x

P/B

0.67x

EV/EBITDA

—

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well2

Return on equity is rising
ROE has improved from -2.9% to 1.4%.
Return on capital is rising
ROCE has improved from -2.9% to 2.1%.

🔴 What Needs Attention3

Margins are compressing
EBITDA margin has slipped from -351.1% to -8268.3% over 3 years.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Valuation above its historical average
At 100.0x the stock trades 212% above its own median of 32.0x.

Red Flags

2 items require attention · 1 high · 1 watch

🔴Significant margin compressionFinancial
EBITDA margin has fallen 7917.2 points, from -351.1% to -8268.3%.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹0 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

No clear supporting case emerges from the available numbers.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from -351.1% to -8268.3%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The price already assumes success
The stock trades 212% above its own median multiple. At this level the business has to deliver just to stand still, and a stumble is repriced twice — lower earnings on a lower multiple.
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 -8270%✓ -8268.3%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹0 Cr
Profit that never becomes cash eventually stops being profit.
3ROCE stays above 8%✗ 2.1%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
4Valuation vs its own median of 32.0x✗ 100.0x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

3 / 10 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✓ 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 · 3 neutral · 6 weak

Market Cap

₹5 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

100.0x

Expensive

Expensive — verify against sector peers

P/B Ratio

0.67x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹0.05

Profitable

Profitable on a per-share basis

ROE

0.6%

Weak

Weak capital efficiency

ROCE

2.1%

Weak

Low return on total capital employed

Debt/Equity

Not available

No data

Source didn't return this field

Revenue Growth (YoY)

-54.1%

Shrinking

Sales are contracting

Profit Growth (YoY)

-31.8%

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

-₹0 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹5

ROA

-1.9%

Weak

Assets generate little profit

Operating Margin

-4564.3%

Weak

Thin margins leave little room for error

Net Margin

1423.6%

Good

Strong bottom-line conversion

Current Ratio

2491.63

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.38

Defensive

Steadier than the market

52W Range Position

51%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

5.2 / 5.3

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

50.3

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹0 Cr	₹1 Cr	₹0 Cr	₹0 Cr	-66.7%
EBITDA	-₹0 Cr	-₹0 Cr	-₹0 Cr	-₹0 Cr	—
EBITDA Margin	-351.1%	-14.5%	-3543.3%	-8268.3%	—
PAT (Net Profit)	-₹0 Cr	₹0 Cr	₹0 Cr	₹0 Cr	—
EPS	₹-0.2	₹0.36	₹0.15	₹0.1	—
ROE	-2.9%	5.1%	2.1%	1.4%	—
ROCE	-2.9%	5.1%	4.1%	2.1%	—
Free Cash Flow	₹0 Cr	₹2 Cr	-₹0 Cr	-₹0 Cr	—

🔴 Revenue has shrunk at 66.7% a year over 3 years.

🔴 EBITDA Margin has fallen from -351.1% to -8268.3% over 3 years (-7917.2 pts).

🟢 PAT (Net Profit) has turned positive, from -₹0 Cr to ₹0 Cr.

🟢 EPS has turned positive, from ₹-0.2 to ₹0.1.

🟢 ROE has risen from -2.9% to 1.4% over 3 years (+4.3 pts).

🟢 ROCE has risen from -2.9% to 2.1% over 3 years (+5.0 pts).

🔴 Free Cash Flow has turned negative, from ₹0 Cr to -₹0 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹8 Cr

Total Liabilities

₹0 Cr

Total Debt

—

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹0 Cr

Capex

—

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

45.3%

Peer Comparison

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

Recent News

5 mixed1 general

Universal Arts submits unaudited Q2FY27 standalone results to BSE

scanx.trade, 13 OctResults

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

Universal Arts Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 31 Aug

Upcoming Q2 FY27 results this week: HCLTech, Nestle, Wipro, BHEL, Tech Mahindra, HDFC Bank, and more; check list

Upstox, 11 OctResults

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

Q2 results today: HCLTech, ICICI Pru among 18 firms to report earnings

Business Standard, 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.

Music giant Universal rejects billionaire Bill Ackman's takeover bid

BBC, 29 MayM&A

🟡Mixed / dependsAcquisitions change the balance sheet before they change the earnings. Look at what was paid, how it was funded, and whether debt rose.

Universal Music shares plunge by a quarter on streaming growth fears

Financial Times, 31 JulPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Watch Items

Revenue growth is negative (-54.1%) 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.
1 metric couldn't be retrieved for this stock — this is more common for smaller or thinly-covered listings.

DalalBaazaar Thesis

🟡Business QualityAdequate11.5/20

🟢Financial HealthStrong13.2/20

🔴GrowthWeak2.4/20

🟢ProfitabilityStrong10/15

🔴ValuationDemanding6.2/15

🔴RiskHigh4/10

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.

This thesis breaks if

✓EBITDA margin holds above -8270%-8268.3%
✗Free cash flow remains positive-₹0 Cr
✗ROCE stays above 8%2.1%
✗Valuation vs its own median of 32.0x100.0x today