WeP Solutions Limited

Technology — Computer Hardware · BSE

₹33.60+₹1.10 (+3.38%)

DalalBaazaar Score

37 / 100

🔴 Weak

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, 6:09 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 WeP Solutions Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

WeP Solutions Limited provides managed printing solutions and digital services in India and internationally. The company operates through two segments, Partners Business and Enterprise Business.

IndustryComputer Hardware

SectorTechnology

Employees201

Annual revenue₹68 Cr

How does it make money?

Turns over ₹68 Cr a year. Of every ₹100 of sales, about ₹3 reaches shareholders as profit, with ₹26 left at the operating level before interest, tax and depreciation. Each of its 201 employees supports ₹33.7 lakh of revenue a year, the signature of a people-led business.

EBITDA margin25.7%

Net margin3.0%

Revenue / employee₹33.7 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 6.4% 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.

ROCE6.4%

ROE3.2%

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 -26% while net margin moved -52% 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-26%

Margin effect-52%

DalalBaazaar Score

37/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 9.7% a year
✗ Profit has declined at 29.4% a year
✗ Profit fell 40.0% in the latest year

Quality vs. Valuation

Company Quality

37/ 100

Weak

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

Valuation

39/ 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.

Historical Valuation

Current P/E

67.2x

3Y Median

24.5x

40 monthly readings · mean 28.8x · range 15.0x–64.1x

Sector Median

16.5x

median of 4 sector peers

⚠️Current valuation is approximately 174% above its 3y median of 24.5x. 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 306% above the peer median of 16.5x.

vs. its own history

Expensive

24.5x median over 40 months · +174%

vs. sector peers

Expensive

16.5x median of 4 peers · +306%

vs. generic bands

Expensive

Above 35x

P/E (Trailing)

67.2x

P/B

1.96x

EV/EBITDA

7.8x

PEG

—

Dividend Yield

1.49%

What's Good / What's Bad

🟢 What's Going Well3

Margins are improving
EBITDA margin is up from 17.9% to 25.7% over 3 years.
Very low debt
Debt/Equity of 0.19x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention6

Debt is rising
Total debt is up 125% over 3 years — worth checking what it funded.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Return on equity is falling
ROE has dropped from 10.1% to 3.2% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 9.1% to 6.4% — often a sign of competition or overexpansion.
Receivables growing faster than sales
Receivables are up 18% against revenue growth of -26% — customers are taking longer to pay.
Valuation above its historical average
At 67.2x the stock trades 174% above its own median of 24.5x.

Red Flags

5 items require attention · 1 high · 4 watch

🔴Debt has risen sharplyFinancial
Total debt is up 125% over 3 years, from ₹5 Cr to ₹12 Cr.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 5.6x to 2.3x.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹1 Cr in the latest year.
🟡Profit is decliningFinancial
Net profit is down 65% over 3 years.
🟡Receivables growing faster than salesFinancial
Receivables up 18% against revenue up -26% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 17.9% to 25.7%. 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?

Sales are being booked faster than collected
Receivables are up 18% against revenue up -26%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
The price already assumes success
The stock trades 174% 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.
Returns on shareholder capital are falling
ROE has dropped from 10.1% to 3.2%. 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.
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 24%✓ 25.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹1 Cr
Profit that never becomes cash eventually stops being profit.
3Interest cover stays above 3x✗ 2.3x
How much operating profit can fall before interest stops being comfortably covered.
4Debt / EBITDA stays below 2x✓ 0.7x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 8%✗ 6.4%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

4 / 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

2 good · 3 neutral · 6 weak

Market Cap

₹124 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

67.2x

Expensive

Expensive — verify against sector peers

P/B Ratio

1.96x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹0.5

Profitable

Profitable on a per-share basis

ROE

3.2%

Weak

Weak capital efficiency

ROCE

6.4%

Weak

Low return on total capital employed

Debt/Equity

0.19x

Low

Conservative leverage

Revenue Growth (YoY)

-0.3%

Shrinking

Sales are contracting

Profit Growth (YoY)

-40.0%

Falling

Profits are shrinking

Dividend Yield

1.49%

Modest

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

Free Cash Flow

-₹1 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹33.6

Operating Margin

3.3%

Weak

Thin margins leave little room for error

Net Margin

2.7%

Weak

Very little revenue reaches the bottom line

Current Ratio

2.36

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.15

Defensive

Steadier than the market

52W Range Position

73%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

33.4 / 32.9

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

39.9

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹92 Cr	₹69 Cr	₹65 Cr	₹68 Cr	-9.7%
EBITDA	₹17 Cr	₹17 Cr	₹19 Cr	₹17 Cr	+1.8%
EBITDA Margin	17.9%	24.1%	29.7%	25.7%	—
PAT (Net Profit)	₹6 Cr	₹4 Cr	₹4 Cr	₹2 Cr	-29.4%
EPS	₹1.59	₹1.05	₹1.09	₹0.56	-29.4%
ROE	10.1%	6.4%	6.4%	3.2%	—
ROCE	9.1%	9.5%	10.0%	6.4%	—
Total Debt	₹5 Cr	₹13 Cr	₹15 Cr	₹12 Cr	+31.1%
Free Cash Flow	₹2 Cr	₹5 Cr	-₹3 Cr	-₹1 Cr	—

🔴 Revenue has shrunk at 9.7% a year over 3 years.

🟡 EBITDA has been broadly flat over 3 years (1.8% a year).

🟢 EBITDA Margin has risen from 17.9% to 25.7% over 3 years (+7.8 pts).

🔴 PAT (Net Profit) has shrunk at 29.4% a year over 3 years.

🔴 EPS has shrunk at 29.4% a year over 3 years.

🔴 ROE has fallen from 10.1% to 3.2% over 3 years (-6.9 pts).

🔴 ROCE has fallen from 9.1% to 6.4% over 3 years (-2.7 pts).

🔴 Total Debt has grown at 31.1% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹2 Cr to -₹1 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹90 Cr

Total Liabilities

₹26 Cr

Total Debt

₹12 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

₹10 Cr

Capex

-₹11 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

65.8%

Corporate Actions

Dividend Rate

₹0.5

Ex-Dividend Date

09 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

1 positive5 general

WEP Solutions Upper Circuit Today: Price, Data and Peers

Univest, 14 Oct

WEP Solutions Lower Circuit Today: Price, Data and Peers

Univest, 09 Oct

WEP Solutions Ltd. Peer Comparison – Compare with Others

Value Research, 30 Aug

Wep Solutions sets Sep 9 record date for 31st AGM and dividend

scanx.trade, 08 AugCapital return

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

WEP Solutions Ltd. Key Financial Ratios – Valuation, Profitability & More

Value Research, 30 Aug

DOVE SOFT LTD. Stock/Share price , NSE/BSE Forecast News and Live Quotes

Equitymaster, 08 Oct

Watch Items

Revenue growth is negative (-0.3%) 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.

DalalBaazaar Thesis

🟡Business QualityAdequate10.3/20

🟡Financial HealthAdequate10.1/20

🔴GrowthWeak2.4/20

🔴ProfitabilityWeak4.6/15

🔴ValuationDemanding4.9/15

🔴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. 1 high-severity red flag sits above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above 24%25.7%
✗Free cash flow remains positive-₹1 Cr
✗Interest cover stays above 3x2.3x
✓Debt / EBITDA stays below 2x0.7x
✗ROCE stays above 8%6.4%