At a Glance
Naapbooks Ltd is an SME-listed IT firm that’s grown profit 170% YoY on just ₹12 Cr of revenue in FY25. They build fintech, e-governance, and blockchain software — but suffer from 172 debtor days and 682 days of working capital. Is this the next SaaS star or a smallcap sugar rush?
1️⃣ Introduction with Hook
Fintech. ERP. Blockchain. AI. Cloud.
Naapbooks’ pitch deck sounds like ChatGPT wrote it after too much Red Bull.
But beyond the buzzwords, here’s the truth:
- FY25 revenue = ₹12.18 Cr
- FY25 profit = ₹4.48 Cr
- FY25 OPM = 56.5% 😳
- Working capital days = 682 😵
SaaS or sus? Let’s find out.
2️⃣ WTF Do They Even Do?
- 👨💻 Business: CMMI Level 3 & ISO certified IT dev shop
- 🧾 Offerings:
- Fintech apps
- ERP for e-governance
- Blockchain apps
- Mobile + Web + Embedded dev
- 🧠 Clients: Mostly government and financial sector
- 🛠️ Services: Full lifecycle — from UI/UX to debugging
They basically say “yes” to every tender that has “digital” in the title.
3️⃣ Financials – Profit, Margins, ROE, Growth
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | ₹5.2 Cr | ₹7.8 Cr | ₹12.18 Cr ⬆️ 57% |
| Net Profit | ₹0.63 Cr | ₹1.66 Cr | ₹4.48 Cr ⬆️ 170% |
| EPS | ₹1.07 | ₹1.84 | ₹4.18 |
| OPM | 26% | 36% | 56.5% |
| ROE | 12.6% | 17.4% | 17.1% |
⚡ Revenue nearly tripled in 2 years. Profit grew 7x. Margins exploded. But…
All of this on a ₹12 Cr topline?
4️⃣ Valuation – Is It Cheap, Meh, or Crack?
- CMP: ₹114
- P/E: 27.4x
- Book Value: ₹33.2 → P/B = 3.44x
- Market Cap: ₹123 Cr
- FY25 PAT: ₹4.48 Cr
Fair Value Range:
Let’s assume a reasonable P/E of 15–20 for a microcap IT firm with volatile revenue but high margins:
iniCopyEditFV = ₹4.18 × 15–20 = ₹62.7 – ₹83.6
📉 So the stock is currently 25–80% overvalued depending on your optimism level.
5️⃣ What’s Cooking – News, Triggers, Drama
- 🔥 FY25 results show sharp profit and margin expansion
- 😳 Working capital days up to 682 — cash stuck much?
- 🧍 Chairman Nirmal Jain resigned May 2025 → sudden exit
- 🚫 No dividend declared yet again
- 📉 Stock fell 10% after FY25 results despite profit growth
🧐 That resignation + WC stretch is… sketchy?
6️⃣ Balance Sheet – How Much Debt, How Many Dreams?
| FY25 |
|---|
| Equity Capital |
| Reserves |
| Debt |
| Total Liabilities |
| Fixed Assets |
| CWIP |
| Investments |
| Cash & Other Assets |
Balance sheet looks okay. Low debt, but large receivables. Big jump in “other assets”.
7️⃣ Cash Flow – Sab Number Game Hai
| FY | CFO | CFI | CFF | Net |
|---|---|---|---|---|
| FY24 | -₹3.72 Cr | -₹4.49 Cr | ₹7.49 Cr | -₹0.73 Cr |
| FY25 | -₹9.19 Cr | -₹4.18 Cr | ₹14.04 Cr | ₹0.67 Cr |
Negative operating cash despite profit growth is a red flag.
They’re essentially borrowing/raising funds to stay liquid.
8️⃣ Ratios – Sexy or Stressy?
| Metric | FY25 |
|---|---|
| ROE | 17.1% ✅ |
| ROCE | 23.6% ✅ |
| OPM | 56.5% 🚀 |
| Debtor Days | 173 ❌ |
| Working Capital Days | 682 🚨 |
| Dividend Yield | 0% ❌ |
📛 They’re generating profit on paper but can’t collect cash on time. Not a SaaS issue — it’s a governance issue.
9️⃣ P&L Breakdown – Show Me the Money
- Revenue: ₹12.18 Cr
- Operating Profit: ₹6.88 Cr
- Net Profit: ₹4.48 Cr
- Interest + Depreciation: ₹0.92 Cr combined
- Other Income: ₹0.24 Cr
Margins are sky-high — almost suspiciously so for a small, low-volume IT vendor.
🔟 Peer Comparison – Who Else Is in the Game?
| Company | P/E | ROE | OPM | Revenue |
|---|---|---|---|---|
| Persistent | 69x | 24.1% | 17.2% | ₹11,939 Cr |
| Naapbooks | 27.4x | 17.1% | 56.5% | ₹12 Cr |
| LTIMindtree | 34.1x | 21.5% | 17% | ₹38,000 Cr |
| Wipro | 21.2x | 16.6% | 20% | ₹89,000 Cr |
🤣 Tiny revenue, huge margin, mid-range P/E. This is an oddball, not a pattern.
1️⃣1️⃣ Miscellaneous – Shareholding, Promoters
| Holder | Mar 2023 | Mar 2025 |
|---|---|---|
| Promoters | 63.1% | 53.76% ⬇️ |
| Public | 36.9% | 46.2% ⬆️ |
Promoter stake has dropped 9% in 2 years. Why?
FII stake is negligible.
🧠 EduInvesting Verdict™
💸 Naapbooks looks like a BharatPe-size ambition on a UPI-challan budget.
- 🔥 Profit growth is legit
- ❄️ But cash isn’t
- 🧾 Debt minimal, but working capital bloated
- 🤐 Chairman exits before FY close
- 📉 Overvalued based on real cash flow metrics
🚦 Proceed with extreme caution. Not a scam, but not a slam dunk either.
🎯 Fair Value Range: ₹62 – ₹84
✍️ Written by Prashant | 📅 30 June 2025
Tags: Naapbooks, SME IT Stocks, Blockchain India, Fintech Software, Working Capital Trap, SME IPOs, EduInvesting Deep Dive, Microcap IT, Software Stocks India
