Does Tridhya Tech (NSE:TRIDHYA) Have A Healthy Balance Sheet?

David Iben put it well when he said, 'Volatility is not a risk we care about. What we care about is avoiding the permanent loss of capital.' When we think about how risky a company is, we always like to look at its use of debt, since debt overload can lead to ruin. As with many other companies Tridhya Tech Limited (NSE:TRIDHYA) makes use of debt. But should shareholders be worried about its use of debt?

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When Is Debt A Problem?

Debt is a tool to help businesses grow, but if a business is incapable of paying off its lenders, then it exists at their mercy. Part and parcel of capitalism is the process of 'creative destruction' where failed businesses are mercilessly liquidated by their bankers. While that is not too common, we often do see indebted companies permanently diluting shareholders because lenders force them to raise capital at a distressed price. Of course, debt can be an important tool in businesses, particularly capital heavy businesses. The first thing to do when considering how much debt a business uses is to look at its cash and debt together.

What Is Tridhya Tech's Debt?

The image below, which you can click on for greater detail, shows that at September 2025 Tridhya Tech had debt of ₹771.4m, up from ₹350.4m in one year. Net debt is about the same, since the it doesn't have much cash.

How Healthy Is Tridhya Tech's Balance Sheet?

The latest balance sheet data shows that Tridhya Tech had liabilities of ₹701.6m due within a year, and liabilities of ₹151.7m falling due after that. Offsetting this, it had ₹5.92m in cash and ₹550.3m in receivables that were due within 12 months. So its liabilities total ₹297.1m more than the combination of its cash and short-term receivables.

This deficit is considerable relative to its market capitalization of ₹363.3m, so it does suggest shareholders should keep an eye on Tridhya Tech's use of debt. This suggests shareholders would be heavily diluted if the company needed to shore up its balance sheet in a hurry. There's no doubt that we learn most about debt from the balance sheet. But you can't view debt in total isolation; since Tridhya Tech will need earnings to service that debt. So if you're keen to discover more about its earnings, it might be worth checking out this graph of its long term earnings trend.

Check out our latest analysis for Tridhya Tech

Over 12 months, Tridhya Tech made a loss at the EBIT level, and saw its revenue drop to ₹276m, which is a fall of 30%. To be frank that doesn't bode well.

Caveat Emptor

While Tridhya Tech's falling revenue is about as heartwarming as a wet blanket, arguably its earnings before interest and tax (EBIT) loss is even less appealing. Its EBIT loss was a whopping ₹52m. When we look at that and recall the liabilities on its balance sheet, relative to cash, it seems unwise to us for the company to have any debt. Quite frankly we think the balance sheet is far from match-fit, although it could be improved with time. We would feel better if it turned its trailing twelve month loss of ₹59m into a profit. So in short it's a really risky stock. The balance sheet is clearly the area to focus on when you are analysing debt. However, not all investment risk resides within the balance sheet - far from it. For instance, we've identified 4 warning signs for Tridhya Tech (3 shouldn't be ignored) you should be aware of.

If you're interested in investing in businesses that can grow profits without the burden of debt, then check out this free list of growing businesses that have net cash on the balance sheet.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.