Starcom Information Technology Limited

Technology — Software - Application · BSE

₹88.03₹0.00 (0.00%)

DalalBaazaar Score

19 / 100

🔴 Poor

Verdict

HIGH RISK

Risk

Very High

Driven by negative shareholders' equity — the company owes more than it owns, short-term liabilities exceed short-term assets, negative free cash flow.

In simple words: The company owes more than it owns — years of losses have wiped out its net worth, but sales are shrinking. Solvency — whether it can keep funding itself at all — is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:03 pm

Caution warranted. Multiple fundamental metrics — flagged in red below — point to either valuation stretch, leverage risk, or weakening profitability. This doesn't mean avoid the stock outright, but it does mean the burden of proof is on the growth story to justify the current price.

Understanding the Business

Company site ↗

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

What does this company do?

Starcom Information Technology Limited provides, data quality, business intelligence, and data analytics solutions in India. The company operates in two segments: Test, Measurement & Embedded Solutions for Educational Sector; and Data Quality, Statistical and Analytics Software.

IndustrySoftware - Application

SectorTechnology

Employees28

Annual revenue₹2 Cr

How does it make money?

Turns over ₹2 Cr a year. Of every ₹100 of sales, about ₹-345 reaches shareholders as profit, with ₹-217 left at the operating level before interest, tax and depreciation. Each of its 28 employees supports ₹6.4 lakh of revenue a year, the signature of a people-led business.

EBITDA margin-217.4%

Net margin-344.5%

Revenue / employee₹6.4 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 has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -11% while net margin moved +33% 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-11%

Margin effect+33%

DalalBaazaar Score

19/ 100

Poor

Weighted across six categories. Every point is explained below.

✗ Shareholders' equity is negative — accumulated losses exceed the capital in the business

Quality vs. Valuation

Company Quality

18/ 100

Weak

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

Valuation

30/ 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

Multiples unreliable — equity base is negative

P/E (Trailing)

Not meaningful

P/B

—

EV/EBITDA

—

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well0

Nothing stands out as clearly improving on the years of data available.

🔴 What Needs Attention5

Margins are compressing
EBITDA margin has slipped from -172.4% to -217.4% over 3 years.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Inventory building faster than sales
Inventory is up 251% against revenue growth of -11% — stock may not be moving.
Negative shareholders' equity
Liabilities exceed assets — this is a solvency question that sits above every other consideration here.
Short-term liquidity is tight
Current ratio of 0.05 — near-term obligations exceed near-term assets.

Red Flags

8 items require attention · 5 high · 3 watch

🔴Negative shareholders' equityFinancial
Liabilities exceed assets — accumulated losses have wiped out the company's net worth.
🔴Thin interest coverageFinancial
Operating profit covers interest only -2.4x — little room if earnings dip.
🔴The company is lossmakingFinancial
Net profit of -₹6 Cr in the latest reported year.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 45.0 points, from -172.4% to -217.4%.
🔴Inventory building faster than salesFinancial
Inventory up 251% against revenue up -11% — stock may not be moving.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from -2.2x to -2.4x.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹2 Cr in the latest year.
🟡Short-term liquidity is tightFinancial
Current ratio of 0.05 — near-term obligations exceed near-term assets.

Investment Thesis

🟢 Bull CaseWhat could make this work?

No clear supporting case emerges from the available numbers.

🔴 Bear CaseWhat could go wrong?

Solvency comes before everything else
Liabilities exceed assets. Until net worth is rebuilt, the equity is a claim on a business that owes more than it owns, and further losses or a funding squeeze can leave shareholders with nothing.
Margins are being competed away
EBITDA margin has fallen from -172.4% to -217.4%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
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
5 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

1EBITDA margin holds above -219%✓ -217.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹2 Cr
Profit that never becomes cash eventually stops being profit.
3Interest cover stays above 3x✗ -2.4x
How much operating profit can fall before interest stops being comfortably covered.

Investment Checklist

1 / 9 checks passed

✗ Shareholders' equity is positive (assets exceed liabilities)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✗ 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

0 good · 4 neutral · 7 weak

Market Cap

₹44 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

Not available

No data

Source didn't return this field

EPS (TTM)

₹-12.96

Loss-making

Negative earnings per share — the business is losing money

ROE

Not meaningful

Negative equity

Return on equity can't be read when equity itself is negative

ROCE

Not available

No data

Source didn't return this field

Debt/Equity

Not meaningful

Negative equity

Shareholders' equity is negative, so this ratio can't be read

Revenue Growth (YoY)

-22.6%

Shrinking

Sales are contracting

Profit Growth (YoY)

-24.0%

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

-₹2 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹88.03

Operating Margin

-659.6%

Weak

Thin margins leave little room for error

Net Margin

0.0%

Weak

Very little revenue reaches the bottom line

Current Ratio

0.05

Tight

Tight short-term liquidity

Beta (vs Nifty)

0.29

Defensive

Steadier than the market

52W Range Position

90%

Near high

Near its 52-week high

Technical Snapshot

SMA 20 / SMA 50

89.5 / 91.4

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

0.0

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹2 Cr	₹2 Cr	₹3 Cr	₹2 Cr	-3.7%
EBITDA	-₹3 Cr	-₹4 Cr	-₹3 Cr	-₹4 Cr	—
EBITDA Margin	-172.4%	-235.5%	-98.8%	-217.4%	—
PAT (Net Profit)	-₹5 Cr	-₹8 Cr	-₹5 Cr	-₹6 Cr	—
EPS	₹-10.48	₹-15.37	₹-9.99	₹-12.39	—
Total Debt	₹20 Cr	₹21 Cr	₹16 Cr	₹18 Cr	-3.3%
Free Cash Flow	-₹1 Cr	-₹0 Cr	₹6 Cr	-₹2 Cr	—

🔴 Revenue has shrunk at 3.7% a year over 3 years.

🔴 EBITDA Margin has fallen from -172.4% to -217.4% over 3 years (-45.0 pts).

🟢 Total Debt has shrunk at 3.3% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹28 Cr

Total Liabilities

₹58 Cr

Total Debt

₹18 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹2 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

87.0%

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 mixed5 general

Starcom IT shareholders approve all AGM resolutions, re-appoint Sheriff

scanx.trade, 05 Oct

Starcom IT considers five-year reappointment of chairman Ziaulla Sheriff

scanx.trade, 30 Sept

Mrugesh Trading reports standalone net profit of Rs 0.09 crore in the June 2026 quarter

Business Standard, 15 AugResults

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

Pre-IPO Review Launches Structured Private Company Research Directory

IndyStar, 28 Sept

Starcom IT sets book closure for 31st AGM from Sep 23 to 30

scanx.trade, 07 Sept

Wuxi Just Welcomed a Star-Studded High-Profile IPO

36Kr, 08 Sept

Watch Items

Revenue growth is negative (-22.6%) on the latest reported period — check if this is one-off or a trend.
Trading very close to its 52-week high — momentum-driven entries here carry more mean-reversion risk.
Cross-check against the company's latest quarterly filing / investor presentation before acting.
2 metrics couldn't be retrieved for this stock — this is more common for smaller or thinly-covered listings.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

🔴Business QualityWeak6/20

🔴Financial HealthStretched1/20

🔴GrowthWeak5/20

🔴ProfitabilityWeak1.5/15

🔴ValuationDemanding4.5/15

🔴RiskHigh0.5/10

Avoid until solvency is resolved

Starcom Information Technology Limited owes more than it owns. Whatever the operating numbers show, the equity is a residual claim on a business with negative net worth, and that question has to be settled before any of the rest is worth weighing. 5 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above -219%-217.4%
✗Free cash flow remains positive-₹2 Cr
✗Interest cover stays above 3x-2.4x