String Metaverse Limited

Technology — Information Technology Services · BSE

₹7.00−₹0.09 (−1.27%)

DalalBaazaar Score

60 / 100

🟢 Good

Verdict

NEUTRAL

Risk

High

Driven by high debt relative to equity, negative free cash flow, micro-cap size, which brings thin liquidity.

In simple words: Strong business and financial position, with both sales and profits growing well. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:48 pm

Understanding the Business

Company site ↗

The 60-second version of String Metaverse Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

String Metaverse Limited, together with its subsidiaries, provides IT and software services in India. The company offers information technology (IT), software development, and technology-enabled services.

IndustryInformation Technology Services

SectorTechnology

Employees53

Annual revenue₹1,069 Cr

How does it make money?

Turns over ₹1,069 Cr a year. Of every ₹100 of sales, about ₹10 reaches shareholders as profit, with ₹12 left at the operating level before interest, tax and depreciation. Each of its 53 employees supports ₹20.17 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹20.17 Cr

Who are its competitors?

The closest listed comparisons in its industry are TATA CONSULTANCY SERV LT, INFOSYS LIMITED, HCL TECHNOLOGIES LTD, WIPRO LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Some evidence

ROCE of 30.7% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

Peer median ROE32.0%

DalalBaazaar Score

60/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of -0.04 — historically steadier than the index
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ High leverage magnifies any downturn in earnings
✗ Profits have swung sharply from year to year — earnings are hard to forecast
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

61/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

77/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

10.4x

2Y Median

11.2x

28 monthly readings · mean 25.3x · range 0.7x–93.0x

Sector Median

16.5x

median of 4 sector peers

🟡Currently trading close to its 2y median of 11.2x — the market is paying about what it usually pays for this company.

🟢Against its sector it trades 37% below the peer median of 16.5x.

vs. its own history

Fair

11.2x median over 28 months · -7%

vs. sector peers

Cheap

16.5x median of 4 peers · -37%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

6.5x

PEG

—

What's Good / What's Bad

🟢 What's Going Well3

Return on equity is rising
ROE has improved from -3.8% to 30.9%.
Return on capital is rising
ROCE has improved from -3.4% to 30.7%.
High return on capital employed
ROCE of 30.7% is the mark of a business that converts capital into profit efficiently.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

4 items require attention · 3 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 56% over 3 years, from ₹4 Cr to ₹6 Cr.
🔴High leverageFinancial
Debt/Equity of 1.82x — earnings must service borrowings before shareholders see anything.
🔴Free cash flow negative for 4 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 6985% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 30.7% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Cheaper than its peers
It trades 37% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.

🔴 Bear CaseWhat could go wrong?

Leverage amplifies any setback
Debt/Equity of 1.82x. Interest is payable whether or not the business has a good year.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.
Several serious flags at once
3 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 10%✓ 11.9%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹13 Cr
Profit that never becomes cash eventually stops being profit.
3Debt / EBITDA stays below 2x✓ 0.0x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4ROCE stays above 28%✓ 30.7%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Valuation vs its own median of 11.2x✓ 10.4x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

7 / 11 checks passed

✓ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

6 good · 3 neutral · 2 weak

Market Cap

₹854 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

10.4x

Cheap

Cheap against the generic band

P/B Ratio

3.03x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹0.67

Profitable

Profitable on a per-share basis

ROE

30.9%

Strong

Strong capital efficiency

ROCE

30.7%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

1.82x

High

High leverage

Revenue Growth (YoY)

97.1%

Healthy

Healthy top-line growth

Profit Growth (YoY)

87.5%

Healthy

Profits growing at a healthy clip

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹13 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

9.4%

Average

Average margins

Net Margin

9.6%

Average

Average bottom-line conversion

Current Ratio

12.16

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

-0.04

Defensive

Steadier than the market

52W Range Position

10%

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

7.5 / 7.8

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

24.5

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	—	₹151 Cr	₹407 Cr	₹1,069 Cr	—
EBITDA	-₹0 Cr	₹14 Cr	₹42 Cr	₹128 Cr	—
EBITDA Margin	—	9.1%	10.3%	11.9%	—
PAT (Net Profit)	-₹1 Cr	₹11 Cr	₹35 Cr	₹102 Cr	—
EPS	₹-0.68	₹1.44	₹0.27	₹0.72	—
ROE	-3.8%	9.8%	21.8%	30.9%	—
ROCE	-3.4%	9.7%	21.8%	30.7%	—
Total Debt	₹4 Cr	₹0 Cr	₹0 Cr	₹6 Cr	+15.9%
Free Cash Flow	-₹0 Cr	-₹34 Cr	-₹27 Cr	-₹13 Cr	—

🟢 EBITDA has turned positive, from -₹0 Cr to ₹128 Cr.

🟢 EBITDA Margin has risen from 9.1% to 11.9% over 3 years (+2.8 pts).

🟢 PAT (Net Profit) has turned positive, from -₹1 Cr to ₹102 Cr.

🟢 EPS has turned positive, from ₹-0.68 to ₹0.72.

🟢 ROE has risen from -3.8% to 30.9% over 3 years (+34.7 pts).

🟢 ROCE has risen from -3.4% to 30.7% over 3 years (+34.0 pts).

🔴 Total Debt has grown at 15.9% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹342 Cr

Total Liabilities

₹10 Cr

Cash & Equivalents

₹27 Cr

Operating Cash Flow

₹144 Cr

Capex

-₹157 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

76.3%

Peer Comparison

Company	P/E	ROE
TATA CONSULTANCY SERV LT	17.3x	45.6%
INFOSYS LIMITED	15.8x	32.0%
HCL TECHNOLOGIES LTD	20.4x	24.6%
WIPRO LTD	14.5x	15.9%

Recent News

1 positive2 mixed3 general

2:9 Bonus Issue Share: THIS Small Cap IT Stock Rewards Investors With Bonus Issue | Record Date Revealed!

Goodreturns, 13 OctCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

String Metaverse Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 30 Aug

String Metaverse EGM approves ₹73.5 crore preferential share issue

scanx.trade, 14 Oct

String Metaverse Shareholders Approve Preferential Issue of Equity Shares

Whalesbook, 16 OctFunding

🟡Mixed / dependsNew funding changes the capital structure. Debt raises leverage; an equity raise dilutes existing holders.

String Metaverse Q1 Profit Doubles to ₹37 Cr

HDFC Sky, 13 AugResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Penny stock under ₹10 hits 5% upper circuit despite stock market sell-off

Livemint, 12 Aug

Watch Items

Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

StrongBusiness Quality · Profitability · Valuation

MiddlingFinancial Health · Growth

WeakRisk

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 3 high-severity red flags sit above this conclusion and should be read first.

1 of 5 tripwires tripped — Free cash flow remains positive · see Key things to watch ↑