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Check Before You Invest : Digilogic Systems Ltd

BSE: 544684 NSE: ISIN: INE1OOT01028
  |   Sector:  Capital Goods & Industrial Consumables   |   Industry:  Aerospace & Defense

Snapshot

Q.1 Which industry/sub-sector does Digilogic Systems Ltd belong to?
Digilogic Systems Ltd belongs to the Capital Goods & Industrial Consumables sector, operating specifically within the Aerospace & Defense segment.
Q.2 Is Digilogic Systems Ltd a good quality company?
Digilogic Systems 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 Digilogic Systems Ltd undervalued or overvalued?
Digilogic Systems 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 3-year
Historic Median
Price to Earnings 33.06 34.30
Price to Book 3.35 2.79
Price to Sales 4.45 3.94
EV to EBITDA 21.42 21.33
Q.4 Is Digilogic Systems Ltd a good buy now?
Digilogic Systems 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.

Q.1 Gross Profit margin of Digilogic Systems Ltd?
Digilogic Systems Ltd Gross profit margin which is the profit after deduction of direct costs, is 16.9% for FY-2025, which is above its 3-year median of 8.9%, indicating increasing margins.

Q.2 Operating Profit Margin of Digilogic Systems Ltd?
Digilogic Systems Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 18.73% for FY-2025, which is above its 3-year median of 11.11% indicating increasing margins.

Q.3 Net Profit Margin of Digilogic Systems Ltd?
Digilogic Systems Ltd Net Profit Margin is 10.78% for FY-2025, is above its 3-year median of 4.76%, indicating increasing margins.
Current Level 3-year
Historic Median
Gross Profit Margin (%) 16.9 8.9
Operating Profit Margin (%) 18.73 11.11
Net Profit Margin (%) 10.78 4.76

B: Does the business utilize capital efficiently?

Q.4 Return on Asset of Digilogic Systems Ltd?
Digilogic Systems Ltd Return on Asset is 14.51%, which is above its 3-year historical median of 6.97%, indicating improved asset utilization efficiency.

Q.5 Return on capital employed (ROCE) of Digilogic Systems Ltd?
Digilogic Systems Ltd Return on capital employed is 34.99% for FY-2025, which is above its 3-year historical median of 21.08%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 14%, indicating value creation.

Q.6 Return on Equity (ROE) of Digilogic Systems Ltd?
Digilogic Systems Ltd Return on equity is 33.24% for FY-2025, which is above its 3-year historical median of 19.92%, indicating the business is making better use of its shareholders capital.

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

Q.7 Debt to Equity ratio of Digilogic Systems Ltd?
Digilogic Systems Ltd Debt-to-Equity ratio is 0.40, which is above the industry average of 0.09, indicating higher debt levels in the industry.

Q.8 Debt to cash flow from operations of Digilogic Systems Ltd?
Digilogic Systems Ltd Debt to cash flow from operations is -1.27, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Digilogic Systems Ltd?

Q.1 Promoter shareholding and pledge status of Digilogic Systems Ltd?
Promoters hold 64.26% of the Digilogic Systems Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Digilogic Systems Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Digilogic Systems Ltd vs industry peers?
Digilogic Systems Ltd revenue CAGR is 0.00%, compared to the industry median CAGR of 24.84%, indicating slower growth and losing its market share.
Profit Metrics
Current Level 3-year
Industry Median
Revenue Growth (%) - 24.8
Gross Profit Growth (%) 140 50.6
Operating Profit Growth (%) 116.7 46.4
Net Profit Growth (%) 300 54.5
Operating Efficiency
Current Level 3-year
Industry Median
Asset Turnover (x) 1.35 0.68
ROE (%) 33.24 9.9
ROCE (%) 34.99 13.79
Cash Conversion Cycle (days) 93.89 108

Valuation & price assessment

Q.1 Stock return of Digilogic Systems Ltd over the last decade?
Over the last - year(s), the stock has delivered a CAGR of N/A% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
- - - -
Q.2 Valuation ratios of Digilogic Systems Ltd vs historical?
The current P/E ratio of 33.06 is in line with than its historical median of 34.30, indicating that the stock is trading near its historical average valuation.
Q.3 How do the current valuation ratios compare with 3-year historical median and industry numbers?
Valuation Ratios Current 3-year
Historic Median
3-year
Industry Median
Price to Earnings 33.06 34.30 70.21
Price to Book 3.35 2.79 8.10
Price to Sales 4.45 3.94 9.52
EV to EBITDA 21.42 21.33 39.29

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