Meta Infotech Limited

Technology — Software - Infrastructure · BSE

₹70.55−₹1.45 (−2.01%)

DalalBaazaar Score

59 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Moderate

Driven by negative free cash flow, micro-cap size, which brings thin liquidity, falling profits.

In simple words: Strong business and financial position, though profits are falling even as sales grow. Cash generation is currently 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 Meta Infotech Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Meta Infotech Limited provides cybersecurity solutions in India.

IndustrySoftware - Infrastructure

SectorTechnology

Employees309

Annual revenue₹270 Cr

How does it make money?

Turns over ₹270 Cr a year. Of every ₹100 of sales, about ₹4 reaches shareholders as profit, with ₹7 left at the operating level before interest, tax and depreciation. Each of its 309 employees supports ₹87.4 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹87.4 lakh

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?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 21.7%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 18.5% against a peer median of 32.0% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

Peer median ROE32.0%

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +149% while net margin moved -33% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+149%

Margin effect-33%

DalalBaazaar Score

59/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ 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

79/ 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

12.0x

1.4Y Median

11.6x

17 monthly readings · mean 14.3x · range 7.1x–35.5x

Sector Median

16.5x

median of 4 sector peers

🟡Currently trading close to its 1.4y median of 11.6x — the market is paying about what it usually pays for this company.

🟢Against its sector it trades 27% below the peer median of 16.5x.

vs. its own history

Fair

11.6x median over 17 months · +3%

vs. sector peers

Cheap

16.5x median of 4 peers · -27%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

7.4x

PEG

0.65

What's Good / What's Bad

🟢 What's Going Well3

High return on capital employed
ROCE of 21.7% is the mark of a business that converts capital into profit efficiently.
Very low debt
Debt/Equity of 0.12x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 33.5% to 14.9% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 44.2% to 21.7% — often a sign of competition or overexpansion.

Red Flags

4 items require attention · 3 high · 1 watch

🔴Free cash flow negative for 3 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴Receivables growing faster than salesFinancial
Receivables up 235% against revenue up 149% — sales are being booked faster than they are collected.
🔴Inventory building faster than salesFinancial
Inventory up 585% against revenue up 149% — stock may not be moving.
🟡Margins are compressingFinancial
EBITDA margin is down 2.3 points over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 21.7% 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 27% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 9.3% to 7.0%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Sales are being booked faster than collected
Receivables are up 235% against revenue up 149%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Returns on shareholder capital are falling
ROE has dropped from 33.5% to 14.9%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
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

1Revenue growth stays above 27% a year✓ 35.6% CAGR
Latest reported year was 75.4%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 5%✓ 7.0%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹5 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.5x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 19%✓ 21.7%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

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

₹133 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

12.0x

Cheap

Cheap against the generic band

P/B Ratio

1.82x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹5.87

Profitable

Profitable on a per-share basis

ROE

18.5%

Strong

Strong capital efficiency

ROCE

21.7%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.12x

Low

Conservative leverage

Revenue Growth (YoY)

75.4%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-83.9%

Falling

Profits are shrinking

Dividend Yield

None

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

Free Cash Flow

-₹5 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

ROA

14.2%

Good

Assets are working hard

Operating Margin

14.0%

Average

Average margins

Net Margin

4.0%

Average

Average bottom-line conversion

Current Ratio

1.69

Comfortable

Healthy short-term liquidity

52W Range Position

18%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

77.2 / 85.6

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

31.8

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹108 Cr	₹152 Cr	₹219 Cr	₹270 Cr	+35.6%
EBITDA	₹10 Cr	₹16 Cr	₹26 Cr	₹19 Cr	+23.2%
EBITDA Margin	9.3%	10.6%	11.8%	7.0%	—
PAT (Net Profit)	₹7 Cr	₹11 Cr	₹14 Cr	₹11 Cr	+18.5%
EPS	₹3.47	₹5.57	₹7.58	—	—
ROE	33.5%	35.0%	32.1%	14.9%	—
ROCE	44.2%	48.0%	43.2%	21.7%	—
Total Debt	₹8 Cr	₹1 Cr	₹17 Cr	₹8 Cr	+3.7%
Free Cash Flow	₹29 Cr	-₹5 Cr	-₹16 Cr	-₹5 Cr	—

🟢 Revenue has grown at 35.6% a year over 3 years.

🟢 EBITDA has grown at 23.2% a year over 3 years.

🔴 EBITDA Margin has fallen from 9.3% to 7.0% over 3 years (-2.3 pts).

🟢 PAT (Net Profit) has grown at 18.5% a year over 3 years.

🔴 ROE has fallen from 33.5% to 14.9% over 3 years (-18.6 pts).

🔴 ROCE has fallen from 44.2% to 21.7% over 3 years (-22.4 pts).

🔴 Total Debt has grown at 3.7% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹29 Cr to -₹5 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹129 Cr

Total Liabilities

₹55 Cr

Cash & Equivalents

₹2 Cr

Operating Cash Flow

-₹5 Cr

Capex

-₹1 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

72.1%

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 positive5 general

Compare with

Equitymaster, 17 Oct

Meta Infotech Schedules Analyst Meeting for July 3 Following ₹506 Cr Order Book Milestone

Sahi, 30 JunOrder win

🟢Potentially positiveOrder wins add to future revenue, though the effect depends on the contract's size against annual sales and on when it is executed.

Meta Infotech promoter buys 16,800 shares via open market

scanx.trade, 15 Jun

Meta Infotech hits the roof after securing renewal orders worth over Rs 5 crore

Business Standard, 17 Jun

META INFOTECH LIMITED Share Price

Upstox, 05 May

Meta Infotech targets 4x PAT growth by FY29

scanx.trade, 20 May

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongFinancial Health · Growth · Valuation

MiddlingBusiness Quality · Profitability

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 ↑