Cambridge Tech. (CTE)

Score breakdown: P/E: 0/3 · ROCE: 0/2 · Growth: 2/2 · Dividend: 0/1

Key Financials

Strengths

• Promoter holding of 50.91% aligns owner-manager interests reasonably well.
• Price-to-book of 1.19 is only a modest premium over the stated book value of ₹25.91.
• Latest quarter is net positive at ₹1 Cr, and reported profit growth of 128.22% suggests a possible turn from a weak base.
• Small market cap of ₹56 Cr leaves room for meaningful upside if operations genuinely recover.

Concerns

• ROCE is deeply negative at -18.79%, indicating the business is not earning its cost of capital.
• Sales declined by 9.33%, so the top line is shrinking.
• Debt/equity of 1.18 is high for an asset-light software consulting company.
• P/E of 0.00 and insufficient data for a FairStock Score point to an unreliable, unproven earnings record.

AI Analysis

In investing, I prefer certainty to excitement, and Cambridge Tech offers more uncertainty than clarity. The first red flag is the P/E printed at 0.00—this tells me the trailing earnings stream is not reliable enough to value. The latest quarter shows sales of ₹47 Cr and net profit of only ₹1 Cr; that is a razor-thin 2% margin, hardly the hallmark of a software consulting franchise with pricing power. Sales have declined 9.33%, and ROCE is deeply negative at -18.79%. In other words, the business is destroying capital on its existing operations. The 128.22% profit growth looks impressive at first glance, but a percentage from a negligible base means little; one crore rupees is not a moat. Book value stands at ₹25.91, and with a price of ₹30.87, I am paying a 19% premium over book. That could look like an asset cushion, but with debt/equity at 1.18 and negative returns on capital, book value can be eroded. ROE of 4.79% is no better than a fixed deposit, and there is no dividend to compensate. Promoter holding of 50.91% is a positive sign, but good intentions don't substitute for a durable competitive advantage. Software consulting has low barriers to entry, and I see no proprietary edge here. The Piotroski score of 5/9 is mediocre, and the FairStock Score of INSUFFICIENT_DATA reinforces that this is not a well-understood business. Graham taught me to buy with a margin of safety; at this price, with shrinking sales and negative ROCE, the margin is thin. If the company can stabilize revenues, reduce debt, and earn better returns on capital, I could look again. Today, I will pass.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer