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Check Before You Invest : Danlaw Technologies India Ltd

BSE: 532329 NSE: ISIN: INE310B01013
  |   Sector:  IT & ITES   |   Industry:  IT - Software

Snapshot

Q.1 Which industry/sub-sector does Danlaw Technologies India Ltd belong to?
Danlaw Technologies India Ltd belongs to the IT & ITES sector, operating specifically within the IT - Software segment.
Q.2 Is Danlaw Technologies India Ltd a good quality company?
Danlaw Technologies India 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 Danlaw Technologies India Ltd undervalued or overvalued?
Danlaw Technologies India 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 19.41 23.25
Price to Book 4.3 6.17
Price to Sales 1.59 2.24
EV to EBITDA 10.77 14.69
Q.4 Is Danlaw Technologies India Ltd a good buy now?
Danlaw Technologies India 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 Danlaw Technologies India Ltd?
Danlaw Technologies India Ltd revenue growth is 3.5% for FY-2025, which is below its 5-year CAGR of 70.09%, indicating slower growth.

Q.2 Gross Profit margin of Danlaw Technologies India Ltd?
Danlaw Technologies India Ltd Gross profit margin which is the profit after deduction of direct costs, is 14% for FY-2025, which is above its 5-year median of 10.5%, indicating increasing margins.

Q.3 Operating Profit Margin of Danlaw Technologies India Ltd?
Danlaw Technologies India Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 15.14% for FY-2025, which is above its 5-year median of 13.6% indicating increasing margins.

Q.4 Net Profit Margin of Danlaw Technologies India Ltd?
Danlaw Technologies India Ltd Net Profit Margin is 8.66% for FY-2025, is above its 5-year median of 4.34%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 14 10.5
Operating Profit Margin (%) 15.14 13.6
Net Profit Margin (%) 8.66 4.34

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Danlaw Technologies India Ltd?
Danlaw Technologies India Ltd Return on Asset is 12.63%, which is above its 5-year historical median of 7.33%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Danlaw Technologies India Ltd?
Danlaw Technologies India Ltd Return on capital employed is 31.09% for FY-2025, which is above its 5-year historical median of 22.69%. 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 Danlaw Technologies India Ltd?
Danlaw Technologies India Ltd Return on equity is 28.11% for FY-2025, which is above its 5-year historical median of 23.01%, indicating the business is making better use of its shareholders capital.

Q.8 Cash conversion cycle of Danlaw Technologies India Ltd?
Danlaw Technologies India Ltd Cash conversion cycle is 87 days, above its 5-year historical median of 78 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) 1.46 1.69
ROE (%) 28.11 23.01
ROCE (%) 31.09 22.69
Cash Conversion Cycle 87 days 78 days

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

Q.9 Debt to Equity ratio of Danlaw Technologies India Ltd?
Danlaw Technologies India Ltd Debt-to-Equity ratio is 0.29, which is above the industry average of 0.01, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Danlaw Technologies India Ltd?
Danlaw Technologies India Ltd Debt to cash flow from operations is 2.19, which is at a moderate level.

Ownership & governance

D: Promoter shareholding and pledge status of Danlaw Technologies India Ltd?

Q.1 Promoter shareholding and pledge status of Danlaw Technologies India Ltd?
Promoters hold 61.88% of the Danlaw Technologies India Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

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

Q.1 Revenue growth of Danlaw Technologies India Ltd vs industry peers?
Danlaw Technologies India Ltd revenue CAGR is 70.09%, compared to the industry median CAGR of 3.17%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 3.5 3.2
Gross Profit Growth (%) -8.8 18.4
Operating Profit Growth (%) -11.1 18.8
Net Profit Growth (%) -13.6 21.9
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 1.46 0.46
ROE (%) 28.11 4.22
ROCE (%) 31.09 6.49
Cash Conversion Cycle (days) 86.83 36

Valuation & price assessment

Q.1 Stock return of Danlaw Technologies India Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 26.4% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
26.4% 20.2% 10.3% -18.2%
Q.2 Valuation ratios of Danlaw Technologies India Ltd vs historical?
The current P/E ratio of 19.41 is lower than its historical median of 23.25, 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 19.41 23.25 47.38
Price to Book 4.3 6.17 2.64
Price to Sales 1.59 2.24 4.79
EV to EBITDA 10.77 14.69 16.75

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