SGL Resources Limited

Technology — Software - Application · NSE

₹2.36−₹0.08 (−3.28%)

DalalBaazaar Score

44 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

Driven by the company is currently loss-making, micro-cap size, which brings thin liquidity, falling profits.

In simple words: The company is currently losing money, but sales are shrinking. The direction of profits is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:46 pm

Understanding the Business

Company site ↗

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

What does this company do?

SGL Resources Limited, together with its subsidiary, Jyacad Solutions Private Limited, designs, develops, and sells integrated GIS and image processing software solutions in India.

IndustrySoftware - Application

SectorTechnology

Employees68

Annual revenue₹35 Cr

How does it make money?

Turns over ₹35 Cr a year. Of every ₹100 of sales, about ₹0 reaches shareholders as profit, with ₹24 left at the operating level before interest, tax and depreciation. Each of its 68 employees supports ₹51.3 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹51.3 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?Little sign of one

Returns on capital of 0.2% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE32.0%

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +105% while net margin moved -91% 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+105%

Margin effect-91%

DalalBaazaar Score

44/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROE of 0.1% is weak

Quality vs. Valuation

Company Quality

44/ 100

Weak

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

Valuation

36/ 100

Expensive

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

Weak on business quality and not cheap enough to compensate.

vs. its own history

Not enough price and earnings history

vs. sector peers

Not enough peers with a usable P/E

vs. generic bands

N/A

No P/E — the company is lossmaking

EV/EBITDA

16.6x

PEG

—

What's Good / What's Bad

🟢 What's Going Well2

Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Return on capital is falling
ROCE has declined from 2.3% to 0.2% — often a sign of competition or overexpansion.

Red Flags

5 items require attention · 1 high · 4 watch

🔴Thin interest coverageFinancial
Operating profit covers interest only 1.5x — little room if earnings dip.
🟡Debt is increasingFinancial
Total debt is up 50% over 3 years.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 2.3x to 1.5x.
🟡Profit is decliningFinancial
Net profit is down 82% over 3 years.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 121% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Self-funding with balance-sheet headroom
Positive free cash flow of ₹37 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.
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?

The debt load needs earnings to hold up
Debt is 9.6x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
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.

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

1Revenue growth stays above 20% a year✓ 27.0% CAGR
Latest reported year was -71.1%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 22%✓ 24.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA falls below 3x✗ 9.6x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
4Interest cover stays above 3x✗ 1.5x
How much operating profit can fall before interest stops being comfortably covered.
5Free cash flow remains positive✓ ₹37 Cr
Profit that never becomes cash eventually stops being profit.

Investment Checklist

5 / 10 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

Price history

Quick Metrics

3 good · 2 neutral · 6 weak

Market Cap

₹59 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

Not meaningful

Loss-making

Earnings are negative, so a P/E multiple can't be read here

P/B Ratio

0.32x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹-0.03

Loss-making

Negative earnings per share — the business is losing money

ROE

0.1%

Weak

Weak capital efficiency

ROCE

0.2%

Weak

Low return on total capital employed

Debt/Equity

0.44x

Low

Conservative leverage

Revenue Growth (YoY)

-71.1%

Shrinking

Sales are contracting

Profit Growth (YoY)

-92.6%

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

₹37 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

-267.3%

Weak

Thin margins leave little room for error

Net Margin

-1.7%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.42

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

1.09

Market-like

Moves roughly in line with the market

52W Range Position

41%

Mid-range

Technical Snapshot

RSI (14)

43.0

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹17 Cr	₹30 Cr	₹49 Cr	₹35 Cr	+27.0%
EBITDA	₹4 Cr	₹4 Cr	₹11 Cr	₹8 Cr	+27.2%
EBITDA Margin	24.0%	15.0%	23.2%	24.2%	—
PAT (Net Profit)	₹1 Cr	₹2 Cr	₹1 Cr	₹0 Cr	-43.1%
EPS	₹0.06	₹0.16	₹0.08	—	—
ROE	0.7%	1.9%	0.8%	0.1%	—
ROCE	2.3%	2.3%	1.3%	0.2%	—
Total Debt	₹54 Cr	₹64 Cr	₹16 Cr	₹81 Cr	+14.4%
Free Cash Flow	-₹22 Cr	-₹7 Cr	-₹46 Cr	₹37 Cr	—

🟢 Revenue has grown at 27.0% a year over 3 years.

🟢 EBITDA has grown at 27.2% a year over 3 years.

🟡 EBITDA Margin has held roughly flat at 24.2% over 3 years.

🔴 PAT (Net Profit) has shrunk at 43.1% a year over 3 years.

🟡 ROE has held roughly flat at 0.1% over 3 years.

🔴 ROCE has fallen from 2.3% to 0.2% over 3 years (-2.1 pts).

🔴 Total Debt has grown at 14.4% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹22 Cr to ₹37 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹316 Cr

Total Liabilities

₹131 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

₹37 Cr

Capex

—

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

54.5%

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

2 mixed4 general

SGL Resources Ltd

Equitypandit, 26 Sept

SGL Resources passes all 8 resolutions at 34th annual general meeting

scanx.trade, 04 Oct

SGL Carbon SE (SGL.F) Stock Price, News, Quote & History

Yahoo! Finance Canada, 16 Oct

SGL Carbon (XTRA:SGL) Stock Fair Value Rises After Improved Guidance And Analyst Target Increases

Yahoo Finance, 16 OctAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

CRSL Stock Price and Chart — NSE:CRSL

TradingView, 17 Aug

Choksi Imaging Ltd. Share Price Rises 8.33% Today

Univest, 17 AugPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Watch Items

Revenue growth is negative (-71.1%) on the latest reported period — check if this is one-off or a trend.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

MiddlingBusiness Quality · Financial Health · Valuation

WeakGrowth · Profitability · Risk

Points for each in the Score ↑

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation. 1 high-severity red flag sits above this conclusion and should be read first.

2 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Interest cover stays above 3x · see Key things to watch ↑