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Check Before You Invest : AAA Technologies Ltd

BSE: 543671 NSE: AAATECH ISIN: INE0D0U01013
  |   Sector:  IT & ITES   |   Industry:  BPO/ITeS

Snapshot

Q.1 Which industry/sub-sector does AAA Technologies Ltd belong to?
AAA Technologies Ltd belongs to the IT & ITES sector, operating specifically within the BPO/ITeS segment.
Q.2 Is AAA Technologies Ltd a good quality company?
AAA Technologies Ltd is a good quality company, based on a consistently good multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is AAA Technologies Ltd undervalued or overvalued?
AAA Technologies Ltd appears Fair, as its key valuation ratios are in line with their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 5-year
Historic Median
Price to Earnings 34.67 37.56
Price to Book 3.78 3.57
Price to Sales 4.3 4.83
EV to EBITDA 18.93 21.23
Q.4 Is AAA Technologies Ltd a good buy now?
AAA Technologies Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of AAA Technologies Ltd?
AAA Technologies Ltd revenue growth is 7% for FY-2025, which is below its 5-year CAGR of 12.45%, indicating slower growth.

Q.2 Gross Profit margin of AAA Technologies Ltd?
AAA Technologies Ltd Gross profit margin which is the profit after deduction of direct costs, is 20.3% for FY-2025, which is in line with its 5-year median of 20.3%, indicating stable margins.

Q.3 Operating Profit Margin of AAA Technologies Ltd?
AAA Technologies Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 14.17% for FY-2025, which is below its 5-year median of 15.4% indicating decreasing margins.

Q.4 Net Profit Margin of AAA Technologies Ltd?
AAA Technologies Ltd Net Profit Margin is 13.79% for FY-2025, is in line with its 5-year median of 13.5%, indicating stable margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 20.3 20.3
Operating Profit Margin (%) 14.17 15.4
Net Profit Margin (%) 13.79 13.5

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of AAA Technologies Ltd?
AAA Technologies Ltd Return on Asset is 11.34%, which is above its 5-year historical median of 10.76%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of AAA Technologies Ltd?
AAA Technologies Ltd Return on capital employed is 16.03% for FY-2025, which is in line with its 5-year historical median of 15.89%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 14%, indicating value creation.

Q.7 Return on Equity (ROE) of AAA Technologies Ltd?
AAA Technologies Ltd Return on equity is 11.94% for FY-2025, which is in line with its 5-year historical median of 11.87%, indicating the business is making similar use of its shareholders capital.

Q.8 Cash conversion cycle of AAA Technologies Ltd?
AAA Technologies Ltd Cash conversion cycle is 98 days, below its 5-year historical median of 126 days, indicating improved working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 0.82 0.82
ROE (%) 11.94 11.87
ROCE (%) 16.03 15.89
Cash Conversion Cycle 98 days 126 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of AAA Technologies Ltd?
AAA Technologies Ltd Debt-to-Equity ratio is 0.00, which is lower the industry average of 0.05, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of AAA Technologies Ltd?
AAA Technologies Ltd Debt to cash flow from operations is 0, which is at a healthy level.

Ownership & governance

D: Promoter shareholding and pledge status of AAA Technologies Ltd?

Q.1 Promoter shareholding and pledge status of AAA Technologies Ltd?
Promoters hold 34.38% of the AAA Technologies Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does AAA Technologies Ltd performance compare with that of its Peers?

Q.1 Revenue growth of AAA Technologies Ltd vs industry peers?
AAA Technologies Ltd revenue CAGR is 12.45%, compared to the industry median CAGR of 3.91%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 7 3.9
Gross Profit Growth (%) - 10.8
Operating Profit Growth (%) - 10.8
Net Profit Growth (%) 33.3 8.5
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.82 0.72
ROE (%) 11.94 10.43
ROCE (%) 16.03 15.4
Cash Conversion Cycle (days) 97.79 38

Valuation & price assessment

Q.1 Stock return of AAA Technologies Ltd over the last decade?
Over the last 5 year(s), the stock has delivered a CAGR of 15.94% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
- 15.9% 16.8% 11.4%
Q.2 Valuation ratios of AAA Technologies Ltd vs historical?
The current P/E ratio of 34.67 is lower than its historical median of 37.56, indicating that the stock is trading below its historical average valuation.
Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median
5-year
Industry Median
Price to Earnings 34.67 37.56 29.72
Price to Book 3.78 3.57 2.75
Price to Sales 4.3 4.83 4.18
EV to EBITDA 18.93 21.23 15.58

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