Sylph Industries Limited

Technology — Information Technology Services · BSE

₹0.20+₹0.01 (+5.26%)

DalalBaazaar Score

53 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

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

In simple words: The business is earning a fairly low return on the money invested in it, but sales are shrinking. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:56 pm

Understanding the Business

Company site ↗

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

What does this company do?

Sylph Industries Limited operates as a software technology company in India.

IndustryInformation Technology Services

SectorTechnology

Annual revenue₹118 Cr

How does it make money?

Turns over ₹118 Cr a year. Of every ₹100 of sales, about ₹6 reaches shareholders as profit, with ₹9 left at the operating level before interest, tax and depreciation.

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 6.0% 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 +2509% while net margin moved -62% 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+2509%

Margin effect-62%

DalalBaazaar Score

53/ 100

Moderate

Weighted across six categories. Every point is explained below.

✓ Beta of -0.50 — historically steadier than the index
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ High leverage magnifies any downturn in earnings
✗ Profits have swung sharply from year to year — earnings are hard to forecast
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

49/ 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

1.3x

3Y Median

232.5x

40 monthly readings · mean 352.9x · range 6.3x–1162.7x

Sector Median

16.5x

median of 4 sector peers

🟢Current valuation is approximately 99% below its 3y median of 232.5x. 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 92% below the peer median of 16.5x.

vs. its own history

Cheap

232.5x median over 40 months · -99%

vs. sector peers

Cheap

16.5x median of 4 peers · -92%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

3.1x

PEG

0.01

Red Flags

6 items require attention · 4 high · 2 watch

🔴Debt has risen sharplyFinancial
Total debt is up 1227% over 3 years, from ₹1 Cr to ₹10 Cr.
🔴High leverageFinancial
Debt/Equity of 7.76x — earnings must service borrowings before shareholders see anything.
🔴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 16.5 points, from 25.6% to 9.1%.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹80 Cr in the latest year.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 456% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Priced below its own history
The stock trades 99% 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 92% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 25.6% to 9.1%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Leverage amplifies any setback
Debt/Equity of 7.76x. Interest is payable whether or not the business has a good year.
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
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
4 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 147% a year✓ 196.6% CAGR
Latest reported year was -82.5%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 7%✓ 9.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹80 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.9x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 8%✗ 6.0%
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 · 2 neutral · 5 weak

Market Cap

₹25 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

1.3x

Cheap

Cheap against the generic band

P/B Ratio

0.26x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹0.16

Profitable

Profitable on a per-share basis

ROE

6.3%

Weak

Weak capital efficiency

ROCE

6.0%

Weak

Low return on total capital employed

Debt/Equity

7.76x

High

High leverage

Revenue Growth (YoY)

-82.5%

Shrinking

Sales are contracting

Profit Growth (YoY)

921.5%

Healthy

Profits growing at a healthy clip

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹80 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

5.4%

Average

Average margins

Net Margin

7.8%

Average

Average bottom-line conversion

Current Ratio

46.13

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

-0.50

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

0.2 / 0.2

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

40.0

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹5 Cr	₹16 Cr	₹2 Cr	₹118 Cr	+196.6%
EBITDA	₹1 Cr	-₹2 Cr	₹1 Cr	₹11 Cr	+110.2%
EBITDA Margin	25.6%	-15.0%	44.5%	9.1%	—
PAT (Net Profit)	₹1 Cr	-₹3 Cr	-₹1 Cr	₹8 Cr	+115.3%
EPS	₹0	₹-0.1	₹-0.08	₹0.03	+118.1%
ROE	5.4%	-3.2%	-1.2%	6.3%	—
ROCE	5.7%	-2.9%	-1.0%	6.0%	—
Total Debt	₹1 Cr	₹3 Cr	₹8 Cr	₹10 Cr	+136.8%
Free Cash Flow	-₹5 Cr	-₹63 Cr	₹17 Cr	-₹80 Cr	—

🟢 Revenue has grown at 196.6% a year over 3 years.

🟢 EBITDA has grown at 110.2% a year over 3 years.

🔴 EBITDA Margin has fallen from 25.6% to 9.1% over 3 years (-16.5 pts).

🟢 PAT (Net Profit) has grown at 115.3% a year over 3 years.

🟢 EPS has grown at 118.1% a year over 3 years.

🟡 ROE has held roughly flat at 6.3% over 3 years.

🟡 ROCE has held roughly flat at 6.0% over 3 years.

🔴 Total Debt has grown at 136.8% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹138 Cr

Total Liabilities

₹13 Cr

Cash & Equivalents

₹1 Cr

Operating Cash Flow

-₹79 Cr

Capex

-₹1 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

10.6%

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

Sylph Industries - 10 penny stocks plunge up to 75% in six months

The Economic Times, 18 Oct

Sylph Industries Ltd Falls to 52-Week Low of Rs 0.18 as Sell-Off Deepens

MarketsMojo, 18 Oct

Sylph Industries (BSE:511447) - Stock Analysis

Simply Wall Street, 21 Dec

Sylph Industries Limited Share Price

Upstox, 05 May

Sylph Industries publishes audited FY26 results in newspapers

scanx.trade, 02 JunResults

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

Sylph Industries - 15 penny stocks crash up to 50% in 3 months: Are you holding any?

The Economic Times, 23 Aug

Watch Items

Revenue growth is negative (-82.5%) 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

StrongValuation

MiddlingFinancial Health · Growth

WeakBusiness Quality · 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. 4 high-severity red flags sit above this conclusion and should be read first.

2 of 5 tripwires tripped — Free cash flow remains positive; ROCE stays above 8% · see Key things to watch ↑