Silicon Rental Solutions Limited

Technology — Information Technology Services · BSE

₹70.00−₹4.00 (−5.41%)

DalalBaazaar Score

53 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Very High

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

In simple words: Reasonable but unspectacular business quality, though profits are falling even as sales grow. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:01 pm

Understanding the Business

Company site ↗

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

What does this company do?

Silicon Rental Solutions Limited provides equipment rental and leasing solutions in India.

IndustryInformation Technology Services

SectorTechnology

Employees70

Annual revenue₹114 Cr

How does it make money?

Turns over ₹114 Cr a year. Of every ₹100 of sales, about ₹9 reaches shareholders as profit, with ₹37 left at the operating level before interest, tax and depreciation. Each of its 70 employees supports ₹1.63 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.63 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?Little sign of one

Returns on capital of 12.1% 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?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +214% while net margin moved -69% 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+214%

Margin effect-69%

DalalBaazaar Score

53/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Beta of 1.29 — amplifies market moves in both directions
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ High leverage magnifies any downturn in earnings
✓ Profits have been consistent from year to year
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

48/ 100

Average

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

Valuation

88/ 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

7.8x

3Y Median

13.7x

40 monthly readings · mean 13.1x · range 5.0x–21.9x

Sector Median

16.5x

median of 4 sector peers

🟢Current valuation is approximately 43% below its 3y median of 13.7x. 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 trades 53% below the peer median of 16.5x.

vs. its own history

Cheap

13.7x median over 40 months · -43%

vs. sector peers

Cheap

16.5x median of 4 peers · -53%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

1.9x

PEG

—

What's Good / What's Bad

🟢 What's Going Well1

Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 21.0% to 9.3% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 27.5% to 12.1% — often a sign of competition or overexpansion.

Red Flags

5 items require attention · 5 high

🔴Debt has risen sharplyFinancial
Total debt is up 165% over 3 years, from ₹2 Cr to ₹5 Cr.
🔴High leverageFinancial
Debt/Equity of 4.51x — 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.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 45.8 points, from 82.4% to 36.6%.
🔴Receivables growing faster than salesFinancial
Receivables up 458% against revenue up 214% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 43% 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.
Cheaper than its peers
It trades 53% 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 82.4% to 36.6%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Leverage amplifies any setback
Debt/Equity of 4.51x. Interest is payable whether or not the business has a good year.
Sales are being booked faster than collected
Receivables are up 458% against revenue up 214%. 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 21.0% to 9.3%. 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.

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

1Revenue growth stays above 35% a year✓ 46.5% CAGR
Latest reported year was 11.3%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 35%✓ 36.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹4 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 9%✓ 12.1%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

4 / 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 · 4 neutral · 3 weak

Market Cap

₹80 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

7.8x

Cheap

Cheap against the generic band

P/B Ratio

0.73x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹8.97

Profitable

Profitable on a per-share basis

ROE

9.7%

Moderate

Moderate capital efficiency

ROCE

12.1%

Moderate

Moderate return on the capital in the business

Debt/Equity

4.51x

High

High leverage

Revenue Growth (YoY)

11.3%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-8.2%

Falling

Profits are shrinking

Dividend Yield

1.43%

Modest

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

Free Cash Flow

-₹5 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

ROA

6.3%

Average

Average asset productivity

Operating Margin

11.4%

Average

Average margins

Net Margin

9.0%

Average

Average bottom-line conversion

Current Ratio

7.87

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

1.29

Market-like

Moves roughly in line with the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

71.9 / 75.2

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

35.2

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹36 Cr	₹63 Cr	₹102 Cr	₹114 Cr	+46.5%
EBITDA	₹30 Cr	₹39 Cr	₹46 Cr	₹42 Cr	+11.7%
EBITDA Margin	82.4%	61.6%	45.2%	36.6%	—
PAT (Net Profit)	₹11 Cr	₹13 Cr	₹13 Cr	₹10 Cr	-1.4%
EPS	₹12.06	₹12.56	₹12.43	—	—
ROE	21.0%	20.5%	13.1%	9.3%	—
ROCE	27.5%	25.9%	17.7%	12.1%	—
Total Debt	₹2 Cr	₹6 Cr	₹5 Cr	₹5 Cr	+38.3%
Free Cash Flow	-₹10 Cr	-₹5 Cr	-₹3 Cr	-₹4 Cr	—

🟢 Revenue has grown at 46.5% a year over 3 years.

🟢 EBITDA has grown at 11.7% a year over 3 years.

🔴 EBITDA Margin has fallen from 82.4% to 36.6% over 3 years (-45.8 pts).

🟡 PAT (Net Profit) has been broadly flat over 3 years (-1.4% a year).

🔴 ROE has fallen from 21.0% to 9.3% over 3 years (-11.7 pts).

🔴 ROCE has fallen from 27.5% to 12.1% over 3 years (-15.4 pts).

🔴 Total Debt has grown at 38.3% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹125 Cr

Total Liabilities

₹15 Cr

Cash & Equivalents

₹5 Cr

Operating Cash Flow

₹17 Cr

Capex

-₹21 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

69.6%

Corporate Actions

Dividend Rate

₹1

Ex-Dividend Date

21 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

1 positive5 general

Silicon Rental Solutions shareholders approve all FY26 AGM resolutions unanimously

scanx.trade, 28 Sept

Silicon Rental Solutions Ltd. Peer Comparison – Compare with Others

Value Research, 30 Aug

Silicon Rental Solutions declares ₹1 dividend per share for FY26 at AGM

scanx.trade, 05 SeptCapital return

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

Silicon Rental Solutions Ltd. Key Financial Ratios – Valuation, Profitability & More

Value Research, 31 Aug

Silicon Rental Solutions enters three-year platform deal with WeWork India

scanx.trade, 16 Sept

Upcoming dividends, stock splits this week: IRCTC, Engineers India, BEML, NLC India, Titagarh Rail Systems, Dixon Tech, among others in focus

Upstox, 20 Sept

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.

DalalBaazaar Thesis

StrongValuation

MiddlingBusiness Quality · Financial Health

WeakGrowth · Profitability · Risk

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. 5 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 ↑