MoneyWorks4Me

Check Before You Invest : Dolat Algotech Ltd

BSE: 505526 NSE: DOLATALGO ISIN: INE966A01022
  |   Sector:  BFSI   |   Industry:  Finance - Stock Broking

Snapshot

Q.1 Which industry/sub-sector does Dolat Algotech Ltd belong to?
Dolat Algotech Ltd belongs to the BFSI sector, operating specifically within the Finance - Stock Broking segment.
Q.2 Is Dolat Algotech Ltd a good quality company?
Dolat Algotech Ltd is a good quality company, based on a consistently good 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 Dolat Algotech Ltd undervalued or overvalued?
Dolat Algotech Ltd appears Undervalued, as its key valuation ratios are lower 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 7.32 8.67
Price to Book 0.89 1.76
Price to Sales 2.43 5.45
EV to EBITDA 5.38 6.35
Q.4 Is Dolat Algotech Ltd a good buy now?
Dolat Algotech 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 Dolat Algotech Ltd?
Dolat Algotech Ltd Gross profit margin which is the profit after deduction of direct costs, is 45.7% for FY-2026, which is below its 5-year median of 58.6%, indicating decreasing margins.

Q.2 Operating Profit Margin of Dolat Algotech Ltd?
Dolat Algotech Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 56.4% for FY-2026, which is below its 5-year median of 63.02% indicating decreasing margins.

Q.3 Net Profit Margin of Dolat Algotech Ltd?
Dolat Algotech Ltd Net Profit Margin is 32.05% for FY-2026, is below its 5-year median of 41.87%, indicating decreasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 45.7 58.6
Operating Profit Margin (%) 56.4 63.02
Net Profit Margin (%) 32.05 41.87

B: Does the business utilize capital efficiently?

Q.4 Return on Asset of Dolat Algotech Ltd?
Dolat Algotech Ltd Return on Asset is 9.7%, which is below its 5-year historical median of 18.1%, indicating deteriorated asset utilization efficiency.

Q.5 Return on capital employed (ROCE) of Dolat Algotech Ltd?
Dolat Algotech Ltd Return on capital employed is 18.1% for FY-2026, which is below its 5-year historical median of 30%. 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 Dolat Algotech Ltd?
Dolat Algotech Ltd Return on equity is 12.1% for FY-2026, which is below its 5-year historical median of 22%, indicating the business is making worse 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 Dolat Algotech Ltd?
Dolat Algotech Ltd Debt-to-Equity ratio is 0.25, which is above the industry average of 0.06, indicating higher debt levels in the industry.

Q.8 Debt to cash flow from operations of Dolat Algotech Ltd?
Dolat Algotech Ltd Debt to cash flow from operations is 5.1, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Dolat Algotech Ltd?

Q.1 Promoter shareholding and pledge status of Dolat Algotech Ltd?
Promoters hold 74.49% of the Dolat Algotech Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Dolat Algotech Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Dolat Algotech Ltd vs industry peers?
Dolat Algotech Ltd revenue CAGR is 8.78%, compared to the industry median CAGR of 8.78%, indicating stable growth and maintaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) -23.8 8.8
Gross Profit Growth (%) -39.3 16.5
Operating Profit Growth (%) -34.5 20.1
Net Profit Growth (%) -40.3 20.1
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.3 0.24
ROE (%) 12.1 7.4
ROCE (%) 18.1 10.1
Cash Conversion Cycle (days) - -18

Valuation & price assessment

Q.1 Stock return of Dolat Algotech Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 36.8% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
36.8% -8.3% -1% -24.1%
Q.2 Valuation ratios of Dolat Algotech Ltd vs historical?
The current P/E ratio of 7.32 is lower than its historical median of 8.67, 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 7.32 8.67 17.40
Price to Book 0.89 1.76 1.64
Price to Sales 2.43 5.45 5.07
EV to EBITDA 5.38 6.35 7.08

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