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Check Before You Invest : Axis Solution Ltd

BSE: 511144 NSE: ISIN: INE520G01024
  |   Sector:  Capital Goods & Industrial Consumables   |   Industry:  Engineering - Industrial Equipments

Snapshot

Q.1 Which industry/sub-sector does Axis Solution Ltd belong to?
Axis Solution Ltd belongs to the Capital Goods & Industrial Consumables sector, operating specifically within the Engineering - Industrial Equipments segment.
Q.2 Is Axis Solution Ltd a good quality company?
Axis Solution Ltd is a weak quality company, based on a inconsistent 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 Axis Solution Ltd undervalued or overvalued?
Axis Solution 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 45.66 6.69
Price to Book 9.76 0.17
Price to Sales 5.69 0.19
EV to EBITDA 39.9 15.83
Q.4 Is Axis Solution Ltd a good buy now?
Axis Solution Ltd is not a good buy now, based on weak price trend analysis suggesting prices may fall. 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 Axis Solution Ltd?
Axis Solution Ltd revenue growth is 47.2% for FY-2025, which is below its 5-year CAGR of 70.76%, indicating slower growth.

Q.2 Gross Profit margin of Axis Solution Ltd?
Axis Solution Ltd Gross profit margin which is the profit after deduction of direct costs, is 17.7% for FY-2025, which is above its 5-year median of 0.3%, indicating increasing margins.

Q.3 Operating Profit Margin of Axis Solution Ltd?
Axis Solution Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 18.43% for FY-2025, which is above its 5-year median of 0.44% indicating increasing margins.

Q.4 Net Profit Margin of Axis Solution Ltd?
Axis Solution Ltd Net Profit Margin is 17.44% for FY-2025, is above its 5-year median of 0.16%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 17.7 0.3
Operating Profit Margin (%) 18.43 0.44
Net Profit Margin (%) 17.44 0.16

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Axis Solution Ltd?
Axis Solution Ltd Return on Asset is 20.98%, which is above its 5-year historical median of 0.12%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Axis Solution Ltd?
Axis Solution Ltd Return on capital employed is 30.38% for FY-2025, which is above its 5-year historical median of 1.87%. 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 Axis Solution Ltd?
Axis Solution Ltd Return on equity is 39.84% for FY-2025, which is above its 5-year historical median of 0.25%, indicating the business is making better use of its shareholders capital.

Q.8 Cash conversion cycle of Axis Solution Ltd?
Axis Solution Ltd Cash conversion cycle is 131 days, above its 5-year historical median of 31 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 1.2 0.91
ROE (%) 39.84 0.25
ROCE (%) 30.38 1.87
Cash Conversion Cycle 131 days 31 days

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

Q.9 Debt to Equity ratio of Axis Solution Ltd?
Axis Solution Ltd Debt-to-Equity ratio is 0.32, which is above the industry average of 0.18, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Axis Solution Ltd?
Axis Solution Ltd Debt to cash flow from operations is -1.82, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Axis Solution Ltd?

Q.1 Promoter shareholding and pledge status of Axis Solution Ltd?
Promoters hold 85.84% of the Axis Solution Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Axis Solution Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Axis Solution Ltd vs industry peers?
Axis Solution Ltd revenue CAGR is 70.76%, compared to the industry median CAGR of 3.04%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 47.2 3
Gross Profit Growth (%) 56.5 23
Operating Profit Growth (%) 48 21.7
Net Profit Growth (%) 9.4 26.9
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 1.2 0.89
ROE (%) 39.84 11.8
ROCE (%) 30.38 14.41
Cash Conversion Cycle (days) 131.4 99

Valuation & price assessment

Q.1 Stock return of Axis Solution Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 18.5% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
18.5% 129.5% 311.8% 6880.6%
Q.2 Valuation ratios of Axis Solution Ltd vs historical?
The current P/E ratio of 45.66 is higher than its historical median of 6.69, indicating that the stock is trading above 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 45.66 6.69 29.36
Price to Book 9.76 0.17 2.91
Price to Sales 5.69 0.19 2.93
EV to EBITDA 39.9 15.83 15.77

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