Systematic Industries Limited

Basic Materials — Steel · BSE

₹267.00−₹3.10 (−1.15%)

DalalBaazaar Score

55 / 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: Strong business and financial position, but sales are shrinking. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:45 pm

Understanding the Business

Company site ↗

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

What does this company do?

Systematic Industries Limited engages in manufacturing and supplying various steel wires and cables in India and internationally.

IndustrySteel

SectorBasic Materials

Employees421

Annual revenue₹552 Cr

How does it make money?

Turns over ₹552 Cr a year. Of every ₹100 of sales, about ₹4 reaches shareholders as profit, with ₹7 left at the operating level before interest, tax and depreciation. Each of its 421 employees supports ₹1.31 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.31 Cr

Who are its competitors?

The closest listed comparisons in its industry are TATA STEEL LIMITED, JSW STEEL LIMITED, JINDAL STEEL LIMITED, STEEL AUTHORITY OF INDIA. 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 16.2% 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 ROE10.8%

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +73% while net margin moved +93% 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+73%

Margin effect+93%

DalalBaazaar Score

55/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ High leverage magnifies any downturn in earnings
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

58/ 100

Average

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

Valuation

52/ 100

Fair

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

24.9x

1.2Y Median

25.3x

14 monthly readings · mean 25.8x · range 16.4x–36.5x

Sector Median

18.2x

median of 4 sector peers

🟡Currently trading close to its 1.2y median of 25.3x — the market is paying about what it usually pays for this company.

⚠️Against its sector it trades 37% above the peer median of 18.2x.

vs. its own history

Fair

25.3x median over 14 months · -2%

vs. sector peers

Expensive

18.2x median of 4 peers · +37%

vs. generic bands

Fair

15x–35x

EV/EBITDA

15.0x

PEG

0.50

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 4.5% to 7.1% over 3 years.
Debt is being paid down
Total debt is down 84% over 3 years.
Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Return on capital is falling
ROCE has declined from 18.7% to 16.2% — often a sign of competition or overexpansion.

Red Flags

3 items require attention · 2 high · 1 watch

🔴High leverageFinancial
Debt/Equity of 4.95x — 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.
🟡Inventory building faster than salesFinancial
Inventory up 120% against revenue up 73% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 4.5% to 7.1%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Deleveraging frees up earnings
Debt is down 84% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
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?

Leverage amplifies any setback
Debt/Equity of 4.95x. Interest is payable whether or not the business has a good year.
A premium to the sector to defend
It trades 37% above the peer median. That premium needs a reason that persists, or it closes.
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
2 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 15% a year✓ 19.9% CAGR
Latest reported year was -4.7%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 5%✓ 7.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✓ ₹1 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.3x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 13%✓ 16.2%
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

2 good · 5 neutral · 4 weak

Market Cap

₹596 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

24.9x

Fair

Fairly valued against the generic band

P/B Ratio

2.96x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹10.74

Profitable

Profitable on a per-share basis

ROE

14.9%

Moderate

Moderate capital efficiency

ROCE

16.2%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

4.95x

High

High leverage

Revenue Growth (YoY)

-4.7%

Shrinking

Sales are contracting

Profit Growth (YoY)

-9.3%

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

-₹8 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

ROA

9.1%

Good

Assets are working hard

Operating Margin

5.6%

Average

Average margins

Net Margin

3.8%

Average

Average bottom-line conversion

Current Ratio

6.48

Comfortable

Healthy short-term liquidity

52W Range Position

82%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

274.4 / 255.4

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

42.3

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹320 Cr	₹370 Cr	₹446 Cr	₹552 Cr	+19.9%
EBITDA	₹14 Cr	₹26 Cr	₹36 Cr	₹39 Cr	+39.8%
EBITDA Margin	4.5%	7.1%	8.1%	7.1%	—
PAT (Net Profit)	₹6 Cr	₹12 Cr	₹18 Cr	₹21 Cr	+49.3%
EPS	₹2.83	₹5.56	₹8.09	—	—
ROE	12.7%	19.9%	22.3%	10.4%	—
ROCE	18.7%	28.0%	29.5%	16.2%	—
Total Debt	₹62 Cr	₹79 Cr	₹99 Cr	₹10 Cr	-45.7%
Free Cash Flow	-₹24 Cr	-₹8 Cr	-₹10 Cr	₹1 Cr	—

🟢 Revenue has grown at 19.9% a year over 3 years.

🟢 EBITDA has grown at 39.8% a year over 3 years.

🟢 EBITDA Margin has risen from 4.5% to 7.1% over 3 years (+2.6 pts).

🟢 PAT (Net Profit) has grown at 49.3% a year over 3 years.

🔴 ROE has fallen from 12.7% to 10.4% over 3 years (-2.3 pts).

🔴 ROCE has fallen from 18.7% to 16.2% over 3 years (-2.5 pts).

🟢 Total Debt has shrunk at 45.7% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹24 Cr to ₹1 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹235 Cr

Total Liabilities

₹34 Cr

Cash & Equivalents

₹13 Cr

Operating Cash Flow

₹6 Cr

Capex

-₹5 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

85.0%

Peer Comparison

Company	P/E	ROE
TATA STEEL LIMITED	19.8x	10.8%
JSW STEEL LIMITED	12.0x	24.7%
JINDAL STEEL LIMITED	39.1x	5.3%
STEEL AUTHORITY OF INDIA	16.5x	7.1%

Recent News

6 general

Systematic Industries acquires Wire Brigade, raises ₹33.94 crore

scanx.trade, 18 Oct

SYSTEMATIC INDUSTRIES LIMITED Share Price

Upstox, 16 Oct

SYSTEMATIC Share Price Near 52-Week High, Valuation View

Univest, 05 Oct

Compare with

Equitymaster, 15 Oct

SYSTEMATIC Stock Price and Chart — BSE:SYSTEMATIC

TradingView, 07 Sept

Systematic Industries schedules EOGM for October 1, 2026

scanx.trade, 01 Oct

Watch Items

Revenue growth is negative (-4.7%) on the latest reported period — check if this is one-off or a trend.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongGrowth

MiddlingBusiness Quality · Financial Health · Valuation

WeakProfitability · 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. 2 high-severity red flags sit above this conclusion and should be read first.

All 5 tripwires holding · see Key things to watch ↑