Xtranet Technologies Limited

Technology — Information Technology Services · NSE

₹305.25+₹3.35 (+1.11%)

DalalBaazaar Score

60 / 100

🟢 Good

Verdict

NEUTRAL

Risk

High

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

In simple words: Strong business and financial position, with both sales and profits growing well. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:10 pm

Mixed / neutral. No major red flags jump out, but nothing here screams "obviously cheap" either. This is a name that needs a peer comparison and a view on near-term earnings triggers before sizing a position.

Understanding the Business

Company site ↗

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

What does this company do?

Xtranet Technologies Limited provides integrated information technology solutions. It offers enterprise applications, digital services, managed services, proprietary platforms, and technology partnerships for clients across industries and geographies.

IndustryInformation Technology Services

SectorTechnology

Employees504

Annual revenue₹365 Cr

How does it make money?

Turns over ₹365 Cr a year. Of every ₹100 of sales, about ₹11 reaches shareholders as profit, with ₹17 left at the operating level before interest, tax and depreciation. Each of its 504 employees supports ₹72.5 lakh of revenue a year, the signature of a people-led business.

EBITDA margin17.4%

Net margin11.0%

Revenue / employee₹72.5 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?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 32.3%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 29.6% against a peer median of 32.0% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

ROCE32.3%

ROE29.6%

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 +64% while net margin moved +314% 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+64%

Margin effect+314%

DalalBaazaar Score

60/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

71/ 100

Good

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

Valuation

37/ 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

37.3x

Sector Median

16.5x

median of 4 sector peers

⚠️Against its sector it trades 125% above the peer median of 16.5x.

vs. its own history

Not enough price and earnings history

vs. sector peers

Expensive

16.5x median of 4 peers · +125%

vs. generic bands

Expensive

Above 35x

P/E (Trailing)

37.3x

P/B

8.79x

EV/EBITDA

26.4x

PEG

0.42

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 6.1% to 17.4% over 3 years.
Return on equity is rising
ROE has improved from 22.6% to 29.6%.
High return on capital employed
ROCE of 32.3% 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 Attention3

Debt is rising
Total debt is up 343% over 3 years — worth checking what it funded.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Inventory building faster than sales
Inventory is up 116% against revenue growth of 64% — stock may not be moving.

Red Flags

3 items require attention · 2 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 343% over 3 years, from ₹19 Cr to ₹86 Cr.
🔴Free cash flow negative for 4 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🟡Inventory building faster than salesFinancial
Inventory up 116% against revenue up 64% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 32.3% 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 6.1% to 17.4%. 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?

A premium to the sector to defend
It trades 125% 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.
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

1Revenue growth stays above 13% a year✓ 18.0% CAGR
Latest reported year was 10.5%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 15%✓ 17.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹22 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.3x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 29%✓ 32.3%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

10 / 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

5 good · 4 neutral · 2 weak

Market Cap

₹1,596 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

37.3x

Fair

Fairly valued against the generic band

P/B Ratio

8.79x

Rich

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

EPS (TTM)

₹8.19

Profitable

Profitable on a per-share basis

ROE

29.6%

Strong

Strong capital efficiency

ROCE

32.3%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.63x

Moderate

Moderate leverage

Revenue Growth (YoY)

10.5%

Healthy

Healthy top-line growth

Profit Growth (YoY)

72.2%

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

-₹22 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹305.25

Operating Margin

17.3%

Good

Healthy core-business profitability

Net Margin

11.6%

Good

Strong bottom-line conversion

Current Ratio

1.31

Comfortable

Healthy short-term liquidity

52W Range Position

77%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

301.6 / 240.2

Bullish alignment (short > long)

RSI (14)

52.6

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹223 Cr	₹233 Cr	₹276 Cr	₹365 Cr	+18.0%
EBITDA	₹14 Cr	₹20 Cr	₹48 Cr	₹64 Cr	+66.9%
EBITDA Margin	6.1%	8.6%	17.6%	17.4%	—
PAT (Net Profit)	₹6 Cr	₹11 Cr	₹30 Cr	₹40 Cr	+89.4%
ROE	22.6%	28.4%	31.2%	29.6%	—
ROCE	30.8%	31.5%	40.2%	32.3%	—
Total Debt	₹19 Cr	₹41 Cr	₹39 Cr	₹86 Cr	+64.3%
Free Cash Flow	-₹1 Cr	-₹8 Cr	-₹17 Cr	-₹22 Cr	—

🟢 Revenue has grown at 18.0% a year over 3 years.

🟢 EBITDA has grown at 66.9% a year over 3 years.

🟢 EBITDA Margin has risen from 6.1% to 17.4% over 3 years (+11.3 pts).

🟢 PAT (Net Profit) has grown at 89.4% a year over 3 years.

🟢 ROE has risen from 22.6% to 29.6% over 3 years (+7.0 pts).

🟢 ROCE has risen from 30.8% to 32.3% over 3 years (+1.4 pts).

🔴 Total Debt has grown at 64.3% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹342 Cr

Total Liabilities

₹206 Cr

Total Debt

₹86 Cr

Cash & Equivalents

₹1 Cr

Operating Cash Flow

₹28 Cr

Capex

-₹50 Cr

Shareholding (proxy)

Institutional Holding

0.4%

Insider Holding

74.4%

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

XTRANET TECHNOLOGIES LTD Share Price

Upstox, 16 Oct

Xtranet Technologies Ltd (XTRANET) Share Price

Business Today, 16 Oct

Xtranet Technologies Ltd | Stock Share Price Live

MarketSmith India, 16 Oct

Compare with

Equitymaster, 18 Oct

XTRANET TECHNOLOGIES Upper Circuit Today: Price, Data and Peers

Univest, 12 Oct

Xtranet Technologies holds analyst meet, shares no UPSI

scanx.trade, 24 SeptAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Watch Items

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

DalalBaazaar Thesis

🟢Business QualityStrong14.1/20

🟡Financial HealthAdequate11/20

🟢GrowthStrong14.9/20

🟢ProfitabilityStrong12.9/15

🔴ValuationDemanding5/15

🔴RiskHigh2.5/10

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.

This thesis breaks if

✓Revenue growth stays above 13% a year18.0% CAGR
✓EBITDA margin holds above 15%17.4%
✗Free cash flow remains positive-₹22 Cr
✓Debt / EBITDA stays below 2x1.3x
✓ROCE stays above 29%32.3%