Storage Technologies and Automation Limited

Industrials — Engineering & Construction · BSE

₹32.03+₹1.52 (+4.98%)

DalalBaazaar Score

40 / 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, 6:51 pm

Understanding the Business

Company site ↗

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

What does this company do?

Storage Technologies and Automation Limited designs, manufactures, supply, and installs metal storage racks, automated warehousing systems, and related automation solutions in India.

IndustryEngineering & Construction

SectorIndustrials

Employees182

Annual revenue₹85 Cr

How does it make money?

Turns over ₹85 Cr a year. Of every ₹100 of sales, about ₹-4 reaches shareholders as profit, with ₹-0 left at the operating level before interest, tax and depreciation. Each of its 182 employees supports ₹46.7 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹46.7 lakh

Who are its competitors?

The closest listed comparisons in its industry are LARSEN & TOUBRO LTD., ADANI PORT & SEZ LTD, SIEMENS 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 -6.1% 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 ROE14.1%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +4% while net margin moved -742% 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+4%

Margin effect-742%

DalalBaazaar Score

40/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Return on equity is negative
✗ ROE has fallen by 16.4 points over the period

Quality vs. Valuation

Company Quality

39/ 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

—

PEG

—

What's Good / What's Bad

🟢 What's Going Well1

Cash generation is improving
Free cash flow is up 232% over 3 years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 8.1% to -8.3% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 21.8% to -6.1% — often a sign of competition or overexpansion.

Red Flags

7 items require attention · 5 high · 2 watch

🔴Thin interest coverageFinancial
Operating profit covers interest only -1.3x — little room if earnings dip.
🔴The company is lossmakingFinancial
Net profit of -₹3 Cr in the latest reported year.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 5.6 points, from 5.5% to -0.1%.
🔴Receivables growing faster than salesFinancial
Receivables up 108% against revenue up 4% — sales are being booked faster than they are collected.
🔴Inventory building faster than salesFinancial
Inventory up 154% against revenue up 4% — stock may not be moving.
🟡Debt is increasingFinancial
Total debt is up 36% over 3 years.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 3.7x to -1.3x.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Self-funding with balance-sheet headroom
Positive free cash flow of ₹4 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 5.5% to -0.1%. 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 108% against revenue up 4%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Growth barely outpaces inflation
Revenue compounding at 1.5% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
Returns on shareholder capital are falling
ROE has dropped from 8.1% to -8.3%. 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.
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.

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

1EBITDA margin holds above -2%✓ -0.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Interest cover stays above 3x✗ -1.3x
How much operating profit can fall before interest stops being comfortably covered.
3Revenue growth stays above 4% a year✗ 1.5% CAGR
Latest reported year was -25.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
4Free cash flow remains positive✓ ₹4 Cr
Profit that never becomes cash eventually stops being profit.
5ROCE stays above 8%✗ -6.1%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

5 / 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

3 good · 2 neutral · 6 weak

Market Cap

₹41 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

1.05x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹-2.52

Loss-making

Negative earnings per share — the business is losing money

ROE

-7.9%

Weak

Weak capital efficiency

ROCE

-6.1%

Weak

Low return on total capital employed

Debt/Equity

0.36x

Low

Conservative leverage

Revenue Growth (YoY)

-25.9%

Shrinking

Sales are contracting

Profit Growth (YoY)

-194.0%

Falling

Profits are shrinking

Dividend Yield

0.94%

Modest

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

Free Cash Flow

₹5 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

ROA

-2.4%

Weak

Assets generate little profit

Operating Margin

-6.5%

Weak

Thin margins leave little room for error

Net Margin

-3.8%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.81

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.91

Market-like

Moves roughly in line with the market

52W Range Position

10%

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

32.4 / 32.5

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

42.6

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹81 Cr	₹94 Cr	₹100 Cr	₹85 Cr	+1.5%
EBITDA	₹4 Cr	₹13 Cr	₹10 Cr	-₹0 Cr	—
EBITDA Margin	5.5%	13.7%	9.6%	-0.1%	—
PAT (Net Profit)	₹0 Cr	₹6 Cr	₹3 Cr	-₹3 Cr	—
EPS	₹0.38	₹4.73	₹2.68	—	—
ROE	8.1%	50.6%	8.0%	-8.3%	—
ROCE	21.8%	62.8%	17.2%	-6.1%	—
Total Debt	₹10 Cr	₹18 Cr	₹18 Cr	₹14 Cr	+10.8%
Free Cash Flow	₹1 Cr	₹2 Cr	-₹22 Cr	₹4 Cr	+49.2%

🟡 Revenue has been broadly flat over 3 years (1.5% a year).

🔴 EBITDA has turned negative, from ₹4 Cr to -₹0 Cr.

🔴 EBITDA Margin has fallen from 5.5% to -0.1% over 3 years (-5.6 pts).

🔴 PAT (Net Profit) has turned negative, from ₹0 Cr to -₹3 Cr.

🔴 ROE has fallen from 8.1% to -8.3% over 3 years (-16.4 pts).

🔴 ROCE has fallen from 21.8% to -6.1% over 3 years (-27.9 pts).

🔴 Total Debt has grown at 10.8% a year over 3 years.

🟢 Free Cash Flow has grown at 49.2% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹75 Cr

Total Liabilities

₹35 Cr

Cash & Equivalents

₹1 Cr

Operating Cash Flow

₹8 Cr

Capex

-₹4 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

75.4%

Corporate Actions

Dividend Rate

₹0.3

Ex-Dividend Date

15 Sept 2025

Peer Comparison

Company	P/E	ROE
LARSEN & TOUBRO LTD.	30.1x	15.2%
ADANI PORT & SEZ LTD	29.9x	14.1%
SIEMENS LTD	88.8x	10.5%

Recent News

6 general

Storage Technologies Files Non-Large Corporate Status Declaration for FY 2026-27

scanx.trade, 17 Apr

Three IPOs To Debut On Dalal Street This Week; Quick Details Below

Goodreturns, 14 Oct

Naman Industries Proxima (NSEI:NAMAN) - Stock Analysis

Simply Wall Street, 09 Oct

SJP ULTRASONICS LTD. Stock/Share price , NSE/BSE Forecast News and Live Quotes

Equitymaster, 08 Oct

Cold Storage Market Size, Share, Growth & Trends, 2034

Fortune Business Insights, 28 Sept

Should You Buy, Sell or Hold SMCI Stock at a P/S Valuation of 0.41X?

TradingView, 07 Oct

Watch Items

Revenue growth is negative (-25.9%) on the latest reported period — check if this is one-off or a trend.
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

StrongFinancial Health

MiddlingValuation

WeakBusiness Quality · Growth · 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. 5 high-severity red flags sit above this conclusion and should be read first.

3 of 5 tripwires tripped — Interest cover stays above 3x; Revenue growth stays above 4% a year; ROCE stays above 8% · see Key things to watch ↑