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INVESTMENT INSIGHTS

Check Before You Invest : Black Box Ltd

BSE: 500463 NSE: BBOX ISIN: INE676A01027
  |   Sector:  Telecom   |   Industry:  Telecommunication - Equipment

Snapshot

Q.1 Which industry/sub-sector does Black Box Ltd belong to?
Black Box Ltd belongs to the Telecom sector, operating specifically within the Telecommunication - Equipment segment.
Q.2 Is Black Box Ltd a good quality company?
Black Box Ltd is a average quality company, based on a somewhat consistent 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 Black Box Ltd undervalued or overvalued?
Black Box Ltd appears Overvalued, as its key valuation ratios are higher than 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 912.44 175.47
Price to Book 21.82 12.58
Price to Sales 40.23 11.67
EV to EBITDA 456.02 223.07
Q.4 Is Black Box Ltd a good buy now?
Black Box Ltd is a good buy now, based on strong price trend analysis suggesting prices may rise. 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 Black Box Ltd?
Black Box Ltd revenue growth is -2.5% for FY-2025, which is below its 5-year CAGR of 4.03%, indicating slower growth.

Q.2 Gross Profit margin of Black Box Ltd?
Black Box Ltd Gross profit margin which is the profit after deduction of direct costs, is 5.3% for FY-2025, which is above its 5-year median of 3.4%, indicating increasing margins.

Q.3 Operating Profit Margin of Black Box Ltd?
Black Box Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 5.16% for FY-2025, which is above its 5-year median of 4.45% indicating increasing margins.

Q.4 Net Profit Margin of Black Box Ltd?
Black Box Ltd Net Profit Margin is 3.15% for FY-2025, is above its 5-year median of 1.61%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 5.3 3.4
Operating Profit Margin (%) 5.16 4.45
Net Profit Margin (%) 3.15 1.61

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Black Box Ltd?
Black Box Ltd Return on Asset is 2.09%, which is above its 5-year historical median of 1.2%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Black Box Ltd?
Black Box Ltd Return on capital employed is 4.38% for FY-2025, which is above its 5-year historical median of 4.09%. The current ROCE is below its estimated weighted average cost of capital (WACC) of 13.5%, indicating value preservation.

Q.7 Return on Equity (ROE) of Black Box Ltd?
Black Box Ltd Return on equity is 3.45% for FY-2025, which is above its 5-year historical median of 1.95%, indicating the business is making better use of its shareholders capital.

Q.8 Cash conversion cycle of Black Box Ltd?
Black Box Ltd Cash conversion cycle is -43 days, in line with its 5-year historical median of -44 days, indicating stable working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 0.66 0.66
ROE (%) 3.45 1.95
ROCE (%) 4.38 4.09
Cash Conversion Cycle -43 days -44 days

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

Q.9 Debt to Equity ratio of Black Box Ltd?
Black Box Ltd Debt-to-Equity ratio is 0.02, which is lower the industry average of 0.03, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Black Box Ltd?
Black Box Ltd Debt to cash flow from operations is -0.32, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Black Box Ltd?

Q.1 Promoter shareholding and pledge status of Black Box Ltd?
Promoters hold 70.49% of the Black Box Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Black Box Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Black Box Ltd vs industry peers?
Black Box Ltd revenue CAGR is 4.03%, compared to the industry median CAGR of 12.15%, indicating slower growth and losing its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) -2.5 12.2
Gross Profit Growth (%) 185.7 42.5
Operating Profit Growth (%) 0 20.6
Net Profit Growth (%) 0 65.8
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.66 0.59
ROE (%) 3.45 0.03
ROCE (%) 4.38 1.33
Cash Conversion Cycle (days) -42.78 115

Valuation & price assessment

Q.1 Stock return of Black Box Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 53.1% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR		 53.1% 26.9% 89.9% 110.4%
Q.2 Valuation ratios of Black Box Ltd vs historical?
The current P/E ratio of 912.44 is higher than its historical median of 175.47, 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 912.44 175.47 31.57
Price to Book 21.82 12.58 2.63
Price to Sales 40.23 11.67 6.09
EV to EBITDA 456.02 223.07 14.85

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