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Check Before You Invest : Creative Newtech Ltd

BSE: 544631 NSE: CNL ISIN: INE985W01018
  |   Sector:  Miscellaneous   |   Industry:  Trading

Snapshot

Q.1 Which industry/sub-sector does Creative Newtech Ltd belong to?
Creative Newtech Ltd belongs to the Miscellaneous sector, operating specifically within the Trading segment.
Q.2 Is Creative Newtech Ltd a good quality company?
Creative Newtech 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 Creative Newtech Ltd undervalued or overvalued?
Creative Newtech 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 45.18 36.05
Price to Book 5.18 5.74
Price to Sales 0.61 0.61
EV to EBITDA 27.4 21.64
Q.4 Is Creative Newtech Ltd a good buy now?
Creative Newtech 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 Creative Newtech Ltd?
Creative Newtech Ltd revenue growth is 0.1% for FY-2025, which is below its 5-year CAGR of 29.56%, indicating slower growth.

Q.2 Gross Profit margin of Creative Newtech Ltd?
Creative Newtech Ltd Gross profit margin which is the profit after deduction of direct costs, is 2.1% for FY-2025, which is below its 5-year median of 2.6%, indicating decreasing margins.

Q.3 Operating Profit Margin of Creative Newtech Ltd?
Creative Newtech Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 1.6% for FY-2025, which is below its 5-year median of 2.16% indicating decreasing margins.

Q.4 Net Profit Margin of Creative Newtech Ltd?
Creative Newtech Ltd Net Profit Margin is 1.55% for FY-2025, is below its 5-year median of 1.84%, indicating decreasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 2.1 2.6
Operating Profit Margin (%) 1.6 2.16
Net Profit Margin (%) 1.55 1.84

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Creative Newtech Ltd?
Creative Newtech Ltd Return on Asset is 6.37%, which is below its 5-year historical median of 7.92%, indicating deteriorated asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Creative Newtech Ltd?
Creative Newtech Ltd Return on capital employed is 14.14% for FY-2025, which is below its 5-year historical median of 22.45%. 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 Creative Newtech Ltd?
Creative Newtech Ltd Return on equity is 10.96% for FY-2025, which is below its 5-year historical median of 22.67%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of Creative Newtech Ltd?
Creative Newtech Ltd Cash conversion cycle is 35 days, in line with its 5-year historical median of 34 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) 4.11 4.3
ROE (%) 10.96 22.67
ROCE (%) 14.14 22.45
Cash Conversion Cycle 35 days 34 days

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

Q.9 Debt to Equity ratio of Creative Newtech Ltd?
Creative Newtech Ltd Debt-to-Equity ratio is 0.27, which is above the industry average of 0.03, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Creative Newtech Ltd?
Creative Newtech Ltd Debt to cash flow from operations is 5.13, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Creative Newtech Ltd?

Q.1 Promoter shareholding and pledge status of Creative Newtech Ltd?
Promoters hold 56.62% of the Creative Newtech Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Creative Newtech Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Creative Newtech Ltd vs industry peers?
Creative Newtech Ltd revenue CAGR is 29.56%, compared to the industry median CAGR of 0.00%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 0.1 0
Gross Profit Growth (%) -16.7 20.5
Operating Profit Growth (%) -16.1 17.1
Net Profit Growth (%) -16.1 18.1
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 4.11 0.54
ROE (%) 10.96 2.07
ROCE (%) 14.14 3.59
Cash Conversion Cycle (days) 34.92 45

Valuation & price assessment

Q.1 Stock return of Creative Newtech Ltd over the last decade?
Over the last 5 year(s), the stock has delivered a CAGR of 36.75% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
- 36.8% 24.1% 59.6%
Q.2 Valuation ratios of Creative Newtech Ltd vs historical?
The current P/E ratio of 45.18 is higher than its historical median of 36.05, 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 45.18 36.05 33.62
Price to Book 5.18 5.74 1.57
Price to Sales 0.61 0.61 2.21
EV to EBITDA 27.4 21.64 14.09

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