VL E-Governance & IT Solutions Limited

Technology — Information Technology Services · NSE

₹9.47+₹0.48 (+5.34%)

DalalBaazaar Score

38 / 100

🔴 Weak

Verdict

CAUTION

Risk

Very High

Driven by the company is currently loss-making, micro-cap size, which brings thin liquidity, a beta above 1.3, so it swings harder than the index.

In simple words: The company is currently losing money, but sales are shrinking. Whether sales start growing again is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:08 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 VL E-Governance & IT Solutions Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

VL E-Governance & IT Solutions Limited provides system integration and IT/ITES services for various e-Governance projects in India.

IndustryInformation Technology Services

SectorTechnology

Employees7

Annual revenue₹17 Cr

How does it make money?

Turns over ₹17 Cr a year. Of every ₹100 of sales, about ₹-7 reaches shareholders as profit, with ₹-6 left at the operating level before interest, tax and depreciation. Each of its 7 employees supports ₹2.45 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin-5.6%

Net margin-6.6%

Revenue / employee₹2.45 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.

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 -2.5% 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.

ROCE-2.5%

ROE-2.5%

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 -98% while net margin moved -917% 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-98%

Margin effect-917%

DalalBaazaar Score

38/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Return on equity is negative

Quality vs. Valuation

Company Quality

40/ 100

Weak

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

Valuation

29/ 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

2.50x

EV/EBITDA

—

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 Attention2

Margins are compressing
EBITDA margin has slipped from 1.1% to -5.6% over 3 years.
Return on capital is falling
ROCE has declined from 0.3% to -2.5% — often a sign of competition or overexpansion.

Red Flags

2 items require attention · 2 high

🔴The company is lossmakingFinancial
Net profit of -₹1 Cr in the latest reported year.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 6.7 points, from 1.1% to -5.6%.

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 1.1% to -5.6%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
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
2 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 -8%✓ -5.6%
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%✗ -2.5%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

5 / 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 · 4 neutral · 5 weak

Market Cap

₹103 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

2.50x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹-0.22

Loss-making

Negative earnings per share — the business is losing money

ROE

-2.5%

Weak

Weak capital efficiency

ROCE

-2.5%

Weak

Low return on total capital employed

Debt/Equity

Not available

No data

Source didn't return this field

Revenue Growth (YoY)

-92.1%

Shrinking

Sales are contracting

Profit Growth (YoY)

100.0%

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

₹0 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹9.47

Operating Margin

-91.8%

Weak

Thin margins leave little room for error

Net Margin

-25.1%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.86

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

2.08

High swing

Swings more than the market in both directions

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

9.7 / 10.1

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

25.4

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹730 Cr	₹22 Cr	₹31 Cr	₹17 Cr	-71.4%
EBITDA	₹8 Cr	-₹7 Cr	₹1 Cr	-₹1 Cr	—
EBITDA Margin	1.1%	-32.6%	4.8%	-5.6%	—
PAT (Net Profit)	₹6 Cr	-₹170 Cr	-₹2,517 Cr	-₹1 Cr	—
EPS	₹0.56	₹-16.04	₹-236.42	₹-0.1	—
ROE	0.2%	-6.9%	-5508.2%	-2.5%	—
ROCE	0.3%	-6.9%	-5505.8%	-2.5%	—
Total Debt	₹54 Cr	₹51 Cr	—	—	—
Free Cash Flow	-₹56 Cr	₹2 Cr	-₹61 Cr	₹0 Cr	—

🔴 Revenue has shrunk at 71.4% a year over 3 years.

🔴 EBITDA has turned negative, from ₹8 Cr to -₹1 Cr.

🔴 EBITDA Margin has fallen from 1.1% to -5.6% over 3 years (-6.7 pts).

🔴 PAT (Net Profit) has turned negative, from ₹6 Cr to -₹1 Cr.

🔴 EPS has turned negative, from ₹0.56 to ₹-0.1.

🔴 ROE has fallen from 0.2% to -2.5% over 3 years (-2.8 pts).

🔴 ROCE has fallen from 0.3% to -2.5% over 3 years (-2.8 pts).

🟢 Free Cash Flow has turned positive, from -₹56 Cr to ₹0 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹47 Cr

Total Liabilities

₹3 Cr

Total Debt

—

Cash & Equivalents

₹2 Cr

Operating Cash Flow

₹0 Cr

Capex

—

Shareholding (proxy)

Institutional Holding

6.2%

Insider Holding

30.4%

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 mixed5 general

VL E-Governance & IT Solutions Upper Circuit Today

Univest, 06 Oct

VL E-Governance & IT Solutions (VLEGOV.NS) Jumps 4.94% to ₹9.78, Tests Key Resistance Zone - Early Entry Signals

https://www.siam.in/, 06 Oct

VL E-Governance approves FY26 financials and MD appointment at AGM

scanx.trade, 24 Sept

VL E-Governance & IT Solutions Ltd Spurts 3.1%

Business Standard, 14 Jul

Steamhouse India Q1 Results: कंपनी का मुनाफा **80%** बढ़ा, शानदार प्रदर्शन से निवेशक गदगद

Whalesbook, 10 OctResults

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

VL E-Governance & IT Solutions Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 30 Aug

Watch Items

Revenue growth is negative (-92.1%) 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.
1 metric couldn't be retrieved for this stock — this is more common for smaller or thinly-covered listings.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

🔴Business QualityWeak6.2/20

🟢Financial HealthStrong17.3/20

🔴GrowthWeak5/20

🔴ProfitabilityWeak1.3/15

🔴ValuationDemanding5.1/15

🔴RiskHigh2.6/10

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. 2 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above -8%-5.6%
✓Free cash flow remains positive₹0 Cr
✗ROCE stays above 8%-2.5%