Kairosoft AI Solutions Limited

Financial Services — Credit Services · BSE

₹12.29+₹0.18 (+1.49%)

DalalBaazaar Score

59 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Moderate

Driven by negative free cash flow, micro-cap size, which brings thin liquidity.

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, 6:50 pm

Understanding the Business

Company site ↗

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

What does this company do?

Kairosoft AI Solutions engaged in the field of Artificial Intelligence (AI) development and related technology solutions in India. It operates through two segments: Artificial Intelligence and Financing of loans and Advances.

IndustryCredit Services

SectorFinancial Services

Employees10

Annual revenue₹3 Cr

How does it make money?

Turns over ₹3 Cr a year. Of every ₹100 of sales, about ₹-13 reaches shareholders as profit, with ₹4 left at the operating level before interest, tax and depreciation. Each of its 10 employees supports ₹33.5 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹33.5 lakh

Who are its competitors?

The closest listed comparisons in its industry are BAJAJ FINANCE LIMITED, STATE BANK OF INDIA, HDFC BANK LTD, ICICI BANK 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?Not assessable from these ratios

For a lender, returns on capital are shaped by leverage and funding cost rather than by pricing power, so the usual financial signature of an advantage does not apply. Judge this one on deposit franchise, cost of funds and asset quality — none of which are in this data.

Peer median ROE16.5%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -10% while net margin moved +800% 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-10%

Margin effect+800%

DalalBaazaar Score

59/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 3.6% a year
✗ Latest-year revenue growth of -54.3% is below the longer-term trend — momentum is fading

Quality vs. Valuation

Company Quality

56/ 100

Average

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

Valuation

69/ 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

10.4x

Sector Median

17.0x

median of 4 sector peers

🟢Against its sector it trades 39% below the peer median of 17.0x.

vs. its own history

Not enough price and earnings history

vs. sector peers

Cheap

17.0x median of 4 peers · -39%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

105.9x

PEG

—

What's Good / What's Bad

🟢 What's Going Well1

Margins are improving
EBITDA margin is up from -0.3% to 3.8% over 3 years.

🔴 What Needs Attention1

Receivables growing faster than sales
Receivables are up 22% against revenue growth of -10% — customers are taking longer to pay.

Red Flags

3 items require attention · 2 high · 1 watch

🔴Thin interest coverageFinancial
Operating profit covers interest only -42.2x — little room if earnings dip.
🔴The company is lossmakingFinancial
Net profit of -₹0 Cr in the latest reported year.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 196% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from -0.3% to 3.8%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Cheaper than its peers
It trades 39% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.

🔴 Bear CaseWhat could go wrong?

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 2%✓ 3.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Return on equity stays above 8%✗ -1.1%
For a lender this is the cleanest single read on whether the book is being grown profitably.
3Interest cover stays above 3x✗ -42.2x
How much operating profit can fall before interest stops being comfortably covered.

Investment Checklist

6 / 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

4 good · 2 neutral · 5 weak

Market Cap

₹15 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

10.4x

Cheap

Cheap against the generic band

P/B Ratio

0.37x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹1.18

Profitable

Profitable on a per-share basis

ROE

-1.1%

Weak

Weak capital efficiency

ROCE

-1.0%

Weak

Low return on total capital employed

Debt/Equity

1.65x

High

High leverage

Revenue Growth (YoY)

-54.3%

Shrinking

Sales are contracting

Profit Growth (YoY)

82.2%

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

-₹10 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

22.0%

Good

Healthy core-business profitability

Net Margin

36.3%

Good

Strong bottom-line conversion

Current Ratio

16.94

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.67

Defensive

Steadier than the market

52W Range Position

53%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

15.8 / 14.7

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

23.7

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹4 Cr	₹2 Cr	₹1 Cr	₹3 Cr	-3.6%
EBITDA	-₹0 Cr	₹1 Cr	-₹3 Cr	₹0 Cr	—
EBITDA Margin	-0.3%	29.9%	-240.9%	3.8%	—
PAT (Net Profit)	-₹0 Cr	-₹5 Cr	-₹2 Cr	-₹0 Cr	—
EPS	₹-0.13	₹-11.36	₹-2.02	₹-0.36	—
ROE	-0.2%	-20.0%	-6.0%	-1.1%	—
ROCE	-0.1%	-20.0%	-6.0%	-1.0%	—
Total Debt	₹0 Cr	₹0 Cr	₹0 Cr	₹1 Cr	+135.5%
Free Cash Flow	₹3 Cr	-₹3 Cr	-₹1 Cr	-₹10 Cr	—

🔴 Revenue has shrunk at 3.6% a year over 3 years.

🟢 EBITDA has turned positive, from -₹0 Cr to ₹0 Cr.

🟢 EBITDA Margin has risen from -0.3% to 3.8% over 3 years (+4.1 pts).

🟡 ROE has held roughly flat at -1.1% over 3 years.

🟡 ROCE has held roughly flat at -1.0% over 3 years.

🔴 Total Debt has grown at 135.5% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹3 Cr to -₹10 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹41 Cr

Total Liabilities

₹1 Cr

Cash & Equivalents

₹2 Cr

Operating Cash Flow

₹4 Cr

Capex

-₹13 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

56.2%

Peer Comparison

Company	P/E	ROE
BAJAJ FINANCE LIMITED	30.2x	17.8%
STATE BANK OF INDIA	10.3x	15.2%
HDFC BANK LTD	15.9x	13.8%
ICICI BANK LTD.	18.1x	16.5%

Recent News

1 positive5 general

Kreon Financial raises stake in Kairosoft AI to 19.79%

scanx.trade, 07 Oct

Compare SOMDATT FINANCE with

Equitymaster, 07 Oct

Kairosoft AI Solutions (BSE:506122) - Company Overview and Sector Notes

Kalkine India, 17 Sept

Delhi High Court quashes Kairosoft AI tax notice for AY 2016-17

scanx.trade, 06 Oct

Compare LIBORD SECUR with

Equitymaster, 10 Oct

Kairosoft AI publishes AGM addendum confirming stock split and capital changes

scanx.trade, 20 AugCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Watch Items

Revenue growth is negative (-54.3%) on the latest reported period — check if this is one-off or a trend.
This is a financial-sector business: borrowing is its raw material, not leverage in the usual sense. Debt/Equity and ROCE here aren't comparable to a manufacturer's — read them alongside NIM, GNPA and capital adequacy from the company's own disclosures.
Cross-check against the company's latest quarterly filing / investor presentation before acting.
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

StrongFinancial Health · Valuation

MiddlingBusiness Quality · Profitability

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

2 of 3 tripwires tripped — Return on equity stays above 8%; Interest cover stays above 3x · see Key things to watch ↑