Sigma Solve Limited

Technology — Information Technology Services · NSE

₹44.10−₹0.28 (−0.63%)

DalalBaazaar Score

72 / 100

🟢 Good

Verdict

REASONABLE

Risk

High

Driven by high debt relative to equity, 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, 6:09 pm

Mixed / neutral. No major red flags jump out, but nothing here screams "obviously cheap" either. This is a name that needs a peer comparison and a view on near-term earnings triggers before sizing a position.

Understanding the Business

Company site ↗

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

What does this company do?

Sigma Solve Limited, together with its subsidiary, Sigma Solve Inc., engages in the enterprise software development business worldwide. The company offers IT and turnkey consultancy services to customers in their business domain.

IndustryInformation Technology Services

SectorTechnology

Employees216

Annual revenue₹96 Cr

How does it make money?

Turns over ₹96 Cr a year. Of every ₹100 of sales, about ₹25 reaches shareholders as profit, with ₹37 left at the operating level before interest, tax and depreciation. Each of its 216 employees supports ₹44.3 lakh of revenue a year, the signature of a people-led business.

EBITDA margin36.7%

Net margin25.0%

Revenue / employee₹44.3 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.

TATA CONSULTANCY SERV LTP/E 17.3x · ROE 45.6%

INFOSYS LIMITEDP/E 15.8x · ROE 32.0%

HCL TECHNOLOGIES LTDP/E 20.4x · ROE 24.6%

WIPRO LTDP/E 14.5x · ROE 15.9%

What is its competitive advantage?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 38.5%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 31.0% 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.

ROCE38.5%

ROE31.0%

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 +71% while net margin moved +19% 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+71%

Margin effect+19%

DalalBaazaar Score

72/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of 0.36 — historically steadier than the index
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ High leverage magnifies any downturn in earnings

Quality vs. Valuation

Company Quality

78/ 100

Good

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

Valuation

69/ 100

Cheap

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

A good business currently available at an undemanding price — the combination this framework is built to look for.

Historical Valuation

Current P/E

18.0x

3Y Median

29.6x

40 monthly readings · mean 154.6x · range 15.4x–446.0x

Sector Median

16.5x

median of 4 sector peers

🟢Current valuation is approximately 39% below its 3y median of 29.6x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟡Against its sector it is priced broadly in line with the peer median of 16.5x.

vs. its own history

Cheap

29.6x median over 40 months · -39%

vs. sector peers

Fair

16.5x median of 4 peers · +9%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

18.0x

P/B

5.90x

EV/EBITDA

12.7x

PEG

0.68

Dividend Yield

1.13%

What's Good / What's Bad

🟢 What's Going Well5

Debt is being paid down
Total debt is down 48% over 3 years.
Cash generation is improving
Free cash flow is up 129% over 3 years.
High return on capital employed
ROCE of 38.5% is the mark of a business that converts capital into profit efficiently.
Valuation below its historical average
At 18.0x the stock trades 39% below its own median of 29.6x.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention3

Margins are compressing
EBITDA margin has slipped from 43.8% to 36.7% over 3 years.
Return on capital is falling
ROCE has declined from 42.3% to 38.5% — often a sign of competition or overexpansion.
Receivables growing faster than sales
Receivables are up 239% against revenue growth of 71% — customers are taking longer to pay.

Red Flags

4 items require attention · 3 high · 1 watch

🔴High leverageFinancial
Debt/Equity of 2.61x — earnings must service borrowings before shareholders see anything.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 7.2 points, from 43.8% to 36.7%.
🔴Receivables growing faster than salesFinancial
Receivables up 239% against revenue up 71% — sales are being booked faster than they are collected.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 900% 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 38.5% 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.
Deleveraging frees up earnings
Debt is down 48% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Priced below its own history
The stock trades 39% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
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 43.8% to 36.7%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Leverage amplifies any setback
Debt/Equity of 2.61x. Interest is payable whether or not the business has a good year.
Sales are being booked faster than collected
Receivables are up 239% against revenue up 71%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
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 15% a year✓ 19.6% CAGR
Latest reported year was 11.5%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 35%✓ 36.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✓ ₹30 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.1x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 36%✓ 38.5%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

9 / 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

₹453 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

18.0x

Fair

Fairly valued against the generic band

P/B Ratio

5.90x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹2.45

Profitable

Profitable on a per-share basis

ROE

31.0%

Strong

Strong capital efficiency

ROCE

38.5%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

2.61x

High

High leverage

Revenue Growth (YoY)

11.5%

Healthy

Healthy top-line growth

Profit Growth (YoY)

142.1%

Healthy

Profits growing at a healthy clip

Dividend Yield

1.13%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹30 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹44.1

Operating Margin

32.8%

Good

Healthy core-business profitability

Net Margin

31.9%

Good

Strong bottom-line conversion

Current Ratio

5.24

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.36

Defensive

Steadier than the market

52W Range Position

30%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

45.1 / 46.1

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

44.2

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹56 Cr	₹65 Cr	₹76 Cr	₹96 Cr	+19.6%
EBITDA	₹24 Cr	₹24 Cr	₹29 Cr	₹35 Cr	+12.7%
EBITDA Margin	43.8%	37.2%	38.2%	36.7%	—
PAT (Net Profit)	₹12 Cr	₹16 Cr	₹19 Cr	₹24 Cr	+26.6%
EPS	₹1.15	₹1.57	₹1.86	₹2.32	+26.5%
ROE	32.4%	53.4%	38.6%	31.0%	—
ROCE	42.3%	75.5%	47.2%	38.5%	—
Total Debt	₹4 Cr	₹5 Cr	₹4 Cr	₹2 Cr	-19.6%
Free Cash Flow	₹13 Cr	₹6 Cr	₹17 Cr	₹30 Cr	+31.9%

🟢 Revenue has grown at 19.6% a year over 3 years.

🟢 EBITDA has grown at 12.7% a year over 3 years.

🔴 EBITDA Margin has fallen from 43.8% to 36.7% over 3 years (-7.2 pts).

🟢 PAT (Net Profit) has grown at 26.6% a year over 3 years.

🟢 EPS has grown at 26.5% a year over 3 years.

🔴 ROE has fallen from 32.4% to 31.0% over 3 years (-1.4 pts).

🔴 ROCE has fallen from 42.3% to 38.5% over 3 years (-3.8 pts).

🟢 Total Debt has shrunk at 19.6% a year over 3 years.

🟢 Free Cash Flow has grown at 31.9% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹89 Cr

Total Liabilities

₹12 Cr

Total Debt

₹2 Cr

Cash & Equivalents

₹9 Cr

Operating Cash Flow

₹30 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

81.1%

Corporate Actions

Dividend Rate

₹0.5

Ex-Dividend Date

16 Sept 2026

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 positive4 general

Sigma Solve (SIGMA) Share/Stock Price Live, NSE

TechGraph, 07 Oct

Sigma Solve vs Nifty 50: 1Y Return -15.95% vs -10.93%

Univest, 12 Oct

20 Best Stocks Under 50 Rs In India October 2026 For High Returns

Samco, 13 Oct

If EPS Growth Is Important To You, Sigma Solve (NSE:SIGMA) Presents An Opportunity

Simply Wall Street, 17 Feb

Sigma Solve net profit surges 142% in Q1FY26 to ₹1,257 lakh

scanx.trade, 31 JulResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Sigma Solve consolidated net profit rises 142.86% in the June 2026 quarter

Business Standard, 31 JulResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Watch Items

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

DalalBaazaar Thesis

🟢Business QualityStrong15.2/20

🟢Financial HealthStrong14.5/20

🟢GrowthStrong14.9/20

🟢ProfitabilityStrong14.1/15

🟡ValuationFair9.1/15

🔴RiskHigh4.3/10

Attractive on both counts

A good business currently available at an undemanding price — the combination this framework exists to look for. The work left is qualitative: whether the advantage the numbers imply is one you can identify and expect to last. 3 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓Revenue growth stays above 15% a year19.6% CAGR
✓EBITDA margin holds above 35%36.7%
✓Free cash flow remains positive₹30 Cr
✓Debt / EBITDA stays below 2x0.1x
✓ROCE stays above 36%38.5%