Valiant Communications Limited

Technology — Communication Equipment · BSE

₹1,688.00+₹9.10 (+0.54%)

DalalBaazaar Score

73 / 100

🟢 Good

Verdict

NEUTRAL

Risk

High

Driven by high debt relative to equity, micro-cap size, which brings thin liquidity, a very high earnings multiple, which leaves little margin for disappointment.

In simple words: Strong business and financial position, 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, 6:58 pm

Understanding the Business

Company site ↗

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

What does this company do?

Valiant Communications Limited manufactures and markets communications equipment.

IndustryCommunication Equipment

SectorTechnology

Employees81

Annual revenue₹85 Cr

How does it make money?

Turns over ₹85 Cr a year. Of every ₹100 of sales, about ₹28 reaches shareholders as profit, with ₹38 left at the operating level before interest, tax and depreciation. Each of its 81 employees supports ₹1.05 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.05 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?Some evidence

ROCE of 32.8% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

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 +169% while net margin moved +434% 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+169%

Margin effect+434%

DalalBaazaar Score

73/ 100

Good

Weighted across six categories. Every point is explained below.

✗ P/E of 71.7x is demanding — it needs sustained high growth to justify
• P/E is close to its own historical median of 72.6x
✗ P/B of 20.03x is a steep premium to book

Quality vs. Valuation

Company Quality

85/ 100

Excellent

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

Valuation

42/ 100

Expensive

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

A good business, but the price already reflects that. The quality is real; the question is whether you are overpaying for it today.

Historical Valuation

Current P/E

71.7x

3Y Median

72.6x

40 monthly readings · mean 79.1x · range 26.2x–192.5x

Sector Median

16.5x

median of 4 sector peers

🟡Currently trading close to its 3y median of 72.6x — the market is paying about what it usually pays for this company.

⚠️Against its sector it trades 333% above the peer median of 16.5x.

vs. its own history

Fair

72.6x median over 40 months · -1%

vs. sector peers

Expensive

16.5x median of 4 peers · +333%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

61.2x

PEG

0.50

What's Good / What's Bad

🟢 What's Going Well6

Margins are improving
EBITDA margin is up from 13.9% to 37.7% over 3 years.
Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
Return on equity is rising
ROE has improved from 5.1% to 25.1%.
Return on capital is rising
ROCE has improved from 6.6% to 32.8%.
High return on capital employed
ROCE of 32.8% is the mark of a business that converts capital into profit efficiently.
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 · 2 high · 2 watch

🔴High leverageFinancial
Debt/Equity of 2.61x — earnings must service borrowings before shareholders see anything.
🔴Receivables growing faster than salesFinancial
Receivables up 415% against revenue up 169% — sales are being booked faster than they are collected.
🟡Debt is increasingFinancial
Total debt is up 38% over 3 years.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 58% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 32.8% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Margin expansion has further to run
EBITDA margin has risen from 13.9% to 37.7%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
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 2.61x. Interest is payable whether or not the business has a good year.
Sales are being booked faster than collected
Receivables are up 415% against revenue up 169%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
A premium to the sector to defend
It trades 333% 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 29% a year✓ 39.1% CAGR
Latest reported year was 38.8%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 36%✓ 37.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✓ ₹26 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.1x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 30%✓ 32.8%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

9 / 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

6 good · 2 neutral · 3 weak

Market Cap

₹1,974 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

71.7x

Expensive

Expensive — verify against sector peers

P/B Ratio

20.03x

Rich

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

EPS (TTM)

₹23.55

Profitable

Profitable on a per-share basis

ROE

25.1%

Strong

Strong capital efficiency

ROCE

32.8%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

2.61x

High

High leverage

Revenue Growth (YoY)

38.8%

Healthy

Healthy top-line growth

Profit Growth (YoY)

61.1%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.09%

Modest

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

Free Cash Flow

₹26 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

39.7%

Good

Healthy core-business profitability

Net Margin

29.6%

Good

Strong bottom-line conversion

Current Ratio

7.38

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.52

Defensive

Steadier than the market

52W Range Position

84%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

1616.6 / 1372.3

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

64.6

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹32 Cr	₹46 Cr	₹51 Cr	₹85 Cr	+39.1%
EBITDA	₹4 Cr	₹11 Cr	₹15 Cr	₹32 Cr	+93.8%
EBITDA Margin	13.9%	23.1%	29.4%	37.7%	—
PAT (Net Profit)	₹2 Cr	₹6 Cr	₹10 Cr	₹24 Cr	+143.2%
EPS	₹2.33	₹8.56	₹12.6	₹21.08	+108.4%
ROE	5.1%	12.0%	15.6%	25.1%	—
ROCE	6.6%	15.8%	20.5%	32.8%	—
Total Debt	₹2 Cr	₹2 Cr	₹2 Cr	₹3 Cr	+11.4%
Free Cash Flow	-₹1 Cr	₹0 Cr	-₹3 Cr	₹26 Cr	—

🟢 Revenue has grown at 39.1% a year over 3 years.

🟢 EBITDA has grown at 93.8% a year over 3 years.

🟢 EBITDA Margin has risen from 13.9% to 37.7% over 3 years (+23.7 pts).

🟢 PAT (Net Profit) has grown at 143.2% a year over 3 years.

🟢 EPS has grown at 108.4% a year over 3 years.

🟢 ROE has risen from 5.1% to 25.1% over 3 years (+20.0 pts).

🟢 ROCE has risen from 6.6% to 32.8% over 3 years (+26.2 pts).

🔴 Total Debt has grown at 11.4% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹1 Cr to ₹26 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹112 Cr

Total Liabilities

₹15 Cr

Cash & Equivalents

₹19 Cr

Operating Cash Flow

₹32 Cr

Capex

-₹7 Cr

Shareholding (proxy)

Institutional Holding

3.5%

Insider Holding

52.2%

Corporate Actions

Dividend Rate

₹1.5

Ex-Dividend Date

10 Sept 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

2 positive4 general

Valiant Communications (BSE:526775) - Stock Analysis

Simply Wall Street, 15 Oct

Valiant Communications 52 Week High Streak: Key Signals

Univest, 29 Sept

Valiant Communications net profit surges 81% in Q1FY27 on strong revenue growth

scanx.trade, 12 AugResults

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

Valiant Communications Ltd. Key Financial Ratios – Valuation, Profitability & More

Value Research, 04 Sept

Valiant Communications consolidated net profit rises 65.04% in the June 2026 quarter

Business Standard, 12 AugResults

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

Valiant Communications validates cutting-edge GPS tech for Indian Armed Forces; stock zooms 6%

Alice Blue, 10 Feb

Watch Items

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

DalalBaazaar Thesis

StrongBusiness Quality · Financial Health · Growth · Profitability

WeakValuation · Risk

Points for each in the Score ↑

Good business, demanding price

The quality is real and the price already reflects it. Buying here is a bet that the business keeps compounding for long enough to grow into the multiple — which good businesses often do, but it removes the margin for error that a lower price would have given you. 2 high-severity red flags sit above this conclusion and should be read first.

All 5 tripwires holding · see Key things to watch ↑