1. At a Glance – The Municipal Software With Startup Valuation
ABM Knowledgeware Ltd currently sits at a market cap of ~₹530 Cr, flexing a ₹265 stock price, a P/E of 46.6×, and the confidence of a startup despite behaving like a cautious municipal clerk.
Latest quarter (Q3 FY26) delivered ₹30.7 Cr revenue (+8.85% YoY) but PAT fell 45% YoY to ₹1.92 Cr — which is impressive if the goal was to scare momentum investors without collapsing the stock.
ROE is 6.27%, ROCE 9.55%, debt is zero, current ratio is a hilarious 8.47, and debtor days are a legendary 183 days — because government clients pay when they feel like it, not when Excel says so.
In short:
Balance sheet = fortress.
Growth = crawl.
Valuation = Olympic sprinter.
Curious already? Good. Because this story only gets weirder.
2. Introduction – When E-Governance Meets Market Euphoria
ABM Knowledgeware is one of those companies that sound futuristic in presentations but behave like a pension fund in financials. Founded in 1998, it has survived multiple tech cycles, multiple governments, and probably multiple tender delays without losing money or taking debt.
The company’s entire identity is built around e-governance — municipalities, urban local bodies, SAP-based systems, accounting reforms, tax digitisation, and dashboards that promise “citizen centricity” while citizens stand in line anyway.
Despite this, the stock has delivered ~50% returns in one year, even while profit growth over 3–5 years is negative. That contradiction is the heart of this analysis.
So the question is simple:
Is ABM finally
entering a growth phase… or is the market just drunk on “Digital India” keywords?
3. Business Model – WTF Do They Even Do?
Think of ABM as the IT contractor for municipalities who don’t want drama.
Core offerings:
- E-Municipality (MaiNet® 2.0) – end-to-end ERP for municipalities
- SAP implementation & AMS
- Smart Water Management (billing, IoT meters, leakage detection)
- Accrual-based accounting migration
- Property tax reform & automation
- Citizen Facilitation Centres (CFCs)
Revenue is mostly services (94%), not licenses. That means:
- Predictable cash flows
- Low scalability
- Zero explosive margins
This is not a SaaS rocket ship. This is a steady government IT contractor that prefers survivability over speed.
Does it sound boring? Yes.
Is boring sometimes beautiful? Also yes.
4. Financials Overview – Numbers Don’t Lie, But They Do Yawn
Quarterly Comparison (₹ Cr)
| Metric | Latest Qtr (Dec’25) | YoY Qtr | Prev Qtr | YoY % | QoQ % |
|---|---|---|---|---|---|
| Revenue | 30.74 | 28.24 | 22.08 | +8.85% | +39.2% |
| EBITDA | 4.26 | 7.39 | 2.39 | -42.3% | +78.2% |
| PAT | 3.14 | 6.11 | 1.40 | -45.3% | +124% |
| EPS (₹) | 0.96 | 1.75 | 1.01 | -45% | -5% |
Annualised EPS (Q3 rule) = average of Q1, Q2, Q3 × 4 → ~₹5.7, matching reported EPS.
Commentary:
Revenue is crawling up. Margins swing wildly quarter to
