Sigma Advanced Systems Limited

Industrials — Aerospace & Defense · NSE

₹955.80+₹19.20 (+2.05%)

DalalBaazaar Score

61 / 100

🟢 Good

Verdict

CAUTION

Risk

Very High

Driven by short-term liabilities exceed short-term assets, negative free cash flow, small-cap size, which brings sharper price swings.

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, 7:02 pm

Understanding the Business

Company site ↗

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

What does this company do?

Sigma Advanced Systems Limited, a defence and aerospace company, designs, develops, and manufactures mission-critical platforms, sub-systems, and components.

IndustryAerospace & Defense

SectorIndustrials

Employees700

Annual revenue₹490 Cr

How does it make money?

Turns over ₹490 Cr a year. Of every ₹100 of sales, about ₹55 reaches shareholders as profit, with ₹19 left at the operating level before interest, tax and depreciation. Each of its 700 employees supports ₹70.1 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹70.1 lakh

Who are its competitors?

The closest listed comparisons in its industry are LARSEN & TOUBRO LTD., SIEMENS LTD, ABB INDIA LIMITED. 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 52.6% 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 ROE15.2%

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 +24782% while net margin moved -88% 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+24782%

Margin effect-88%

DalalBaazaar Score

61/ 100

Good

Weighted across six categories. Every point is explained below.

✗ P/E of 103.4x is demanding — it needs sustained high growth to justify
✗ P/E is 54% above its own historical median of 67.2x — expensive by its own standards
✗ P/B of 35.95x is a steep premium to book

Quality vs. Valuation

Company Quality

72/ 100

Good

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

Valuation

42/ 100

Expensive

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

A good business, but the price already reflects that. The quality is real; the question is whether you are overpaying for it today.

Historical Valuation

Current P/E

103.4x

3Y Median

67.2x

40 monthly readings · mean 109.1x · range 36.3x–519.6x

Sector Median

88.8x

median of 3 sector peers

⚠️Current valuation is approximately 54% above its 3y median of 67.2x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

⚠️Against its sector it trades 16% above the peer median of 88.8x.

vs. its own history

Expensive

67.2x median over 40 months · +54%

vs. sector peers

Fair

88.8x median of 3 peers · +16%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

198.6x

PEG

0.49

What's Good / What's Bad

🟢 What's Going Well3

Return on equity is rising
ROE has improved from 4.6% to 57.2%.
Return on capital is rising
ROCE has improved from 6.1% to 52.6%.
High return on capital employed
ROCE of 52.6% 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

6 items require attention · 3 high · 3 watch

🔴Debt has risen sharplyFinancial
Total debt is up 127% over 3 years, from ₹146 Cr to ₹332 Cr.
🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 1269.4 points, from 1288.4% to 19.0%.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹279 Cr in the latest year.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 139% over 3 years — each existing share owns a smaller slice of the company.
🟡Short-term liquidity is tightFinancial
Current ratio of 0.99 — near-term obligations exceed near-term assets.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 52.6% 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.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 1288.4% to 19.0%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The debt load needs earnings to hold up
Debt is 3.6x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
The price already assumes success
The stock trades 54% above its own median multiple. At this level the business has to deliver just to stand still, and a stumble is repriced twice — lower earnings on a lower multiple.
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
Small 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 397% a year✓ 529.0% CAGR
Latest reported year was 77343.6%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 17%✓ 19.0%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA falls below 3x✗ 3.6x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
4Free cash flow remains positive✗ -₹279 Cr
Profit that never becomes cash eventually stops being profit.
5ROCE stays above 50%✓ 52.6%
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

4 good · 3 neutral · 4 weak

Market Cap

₹18,153 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

103.4x

Expensive

Expensive — verify against sector peers

P/B Ratio

35.95x

Rich

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

EPS (TTM)

₹9.24

Profitable

Profitable on a per-share basis

ROE

57.2%

Strong

Strong capital efficiency

ROCE

52.6%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.71x

Moderate

Moderate leverage

Revenue Growth (YoY)

77343.6%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-89.1%

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

-₹279 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

14.9%

Average

Average margins

Net Margin

19.2%

Good

Strong bottom-line conversion

Current Ratio

0.99

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

1.79

High swing

Swings more than the market in both directions

52W Range Position

80%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

989.8 / 835.9

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

51.1

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹2 Cr	—	₹107 Cr	₹490 Cr	+529.0%
EBITDA	₹25 Cr	₹28 Cr	₹18 Cr	₹93 Cr	+54.1%
EBITDA Margin	1288.4%	—	16.5%	19.0%	—
PAT (Net Profit)	₹9 Cr	-₹13 Cr	-₹14 Cr	₹268 Cr	+212.0%
EPS	₹1.2	₹-1.73	₹-0.79	₹15.21	+133.2%
ROE	4.6%	-7.1%	-6.8%	57.2%	—
ROCE	6.1%	7.4%	3.6%	52.6%	—
Total Debt	₹146 Cr	₹147 Cr	₹148 Cr	₹332 Cr	+31.5%
Free Cash Flow	₹14 Cr	₹11 Cr	₹2 Cr	-₹279 Cr	—

🟢 Revenue has grown at 529.0% a year over 3 years.

🟢 EBITDA has grown at 54.1% a year over 3 years.

🔴 EBITDA Margin has fallen from 1288.4% to 19.0% over 3 years (-1269.4 pts).

🟢 PAT (Net Profit) has grown at 212.0% a year over 3 years.

🟢 EPS has grown at 133.2% a year over 3 years.

🟢 ROE has risen from 4.6% to 57.2% over 3 years (+52.7 pts).

🟢 ROCE has risen from 6.1% to 52.6% over 3 years (+46.5 pts).

🔴 Total Debt has grown at 31.5% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹14 Cr to -₹279 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1,059 Cr

Total Liabilities

₹591 Cr

Cash & Equivalents

₹21 Cr

Operating Cash Flow

-₹210 Cr

Capex

-₹69 Cr

Shareholding (proxy)

Institutional Holding

1.5%

Insider Holding

66.1%

Corporate Actions

Ex-Dividend Date

10 Jun 2008

Peer Comparison

Company	P/E	ROE
LARSEN & TOUBRO LTD.	30.1x	15.2%
SIEMENS LTD	88.8x	10.5%
ABB INDIA LIMITED	92.6x	19.1%

Recent News

2 mixed4 general

SIGMA ADVANCED SYSTEM LTD Share Price - Live NSE: SIGMAADV Stock Price & Chart

Upstox, 15 Oct

Sigma Advanced Systems Signs Munitions India MoU

HDFC Sky, 14 Oct

SIGMA ADVANCED SYSTEMS Share Price Target 2027 to 2030: Analyst O

Univest, 18 AugAnalyst view

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

We Don’t Think Sigma Advanced Systems' (NSE:SIGMAADV) Earnings Should Make Shareholders Too Comfortable

Simply Wall Street, 01 JunResults

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

After 500% jump in 1 year, this defence stock hits 4 back-to-back lower circuits - Do you own? What should investors do?

Livemint, 13 Oct

Sigma Advanced Systems approves preferential share issue at EGM

scanx.trade, 28 Jun

Watch Items

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

DalalBaazaar Thesis

StrongBusiness Quality · Growth · Profitability

MiddlingFinancial Health

WeakValuation · Risk

Points for each in the Score ↑

Good business, demanding price

The quality is real and the price already reflects it. Buying here is a bet that the business keeps compounding for long enough to grow into the multiple — which good businesses often do, but it removes the margin for error that a lower price would have given you. 3 high-severity red flags sit above this conclusion and should be read first.

2 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Free cash flow remains positive · see Key things to watch ↑