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Check Before You Invest : Silverline Technologies Ltd

BSE: 500389 NSE: SILVERLINE ISIN: INE368A01021
  |   Sector:  IT & ITES   |   Industry:  IT - Software

Snapshot

Q.1 Which industry/sub-sector does Silverline Technologies Ltd belong to?
Silverline Technologies Ltd belongs to the IT & ITES sector, operating specifically within the IT - Software segment.
Q.2 Is Silverline Technologies Ltd a good quality company?
Silverline Technologies Ltd is a weak quality company, based on a inconsistent multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Silverline Technologies Ltd undervalued or overvalued?
Silverline Technologies Ltd appears Somewhat Undervalued, as its key valuation ratios are lower than their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 5-year
Historic Median
Price to Earnings 5.07 -
Price to Book 0.81 0.09
Price to Sales 0.5 3.84
EV to EBITDA 5.07 -31.22
Q.4 Is Silverline Technologies Ltd a good buy now?
Silverline Technologies Ltd is not a good buy now, based on weak price trend analysis suggesting prices may fall. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Silverline Technologies Ltd?
Silverline Technologies Ltd revenue growth is 1,859.9% for FY-2025, which is below its 5-year CAGR of 64.25%, indicating slower growth.

Q.2 Gross Profit margin of Silverline Technologies Ltd?
Silverline Technologies Ltd Gross profit margin which is the profit after deduction of direct costs, is -1% for FY-2025, which is below its 5-year median of 4.4%, indicating decreasing margins.

Q.3 Operating Profit Margin of Silverline Technologies Ltd?
Silverline Technologies Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is -0.96% for FY-2025, which is below its 5-year median of 4.45% indicating decreasing margins.

Q.4 Net Profit Margin of Silverline Technologies Ltd?
Silverline Technologies Ltd Net Profit Margin is -1.27% for FY-2025, is below its 5-year median of 0.67%, indicating decreasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) -1 4.4
Operating Profit Margin (%) -0.96 4.45
Net Profit Margin (%) -1.27 0.67

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Silverline Technologies Ltd?
Silverline Technologies Ltd Return on Asset is -0.37%, which is below its 5-year historical median of 0.02%, indicating deteriorated asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Silverline Technologies Ltd?
Silverline Technologies Ltd Return on capital employed is -0.39% for FY-2025, which is below its 5-year historical median of 0.04%. The current ROCE is below its estimated weighted average cost of capital (WACC) of 14%, indicating value preservation.

Q.7 Return on Equity (ROE) of Silverline Technologies Ltd?
Silverline Technologies Ltd Return on equity is -0.58% for FY-2025, which is below its 5-year historical median of 0.05%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of Silverline Technologies Ltd?
Silverline Technologies Ltd Cash conversion cycle is 208 days, above its 5-year historical median of -934 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 0.29 0.08
ROE (%) -0.58 0.05
ROCE (%) -0.39 0.04
Cash Conversion Cycle 208 days -934 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of Silverline Technologies Ltd?
Silverline Technologies Ltd Debt-to-Equity ratio is 0.28, which is above the industry average of 0.01, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Silverline Technologies Ltd?
Silverline Technologies Ltd Debt to cash flow from operations is -0.36, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Silverline Technologies Ltd?

Q.1 Promoter shareholding and pledge status of Silverline Technologies Ltd?
Promoters hold 0.00% of the Silverline Technologies Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Silverline Technologies Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Silverline Technologies Ltd vs industry peers?
Silverline Technologies Ltd revenue CAGR is 64.25%, compared to the industry median CAGR of 3.17%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 1 3.2
Gross Profit Growth (%) 0 18.4
Operating Profit Growth (%) 0 18.8
Net Profit Growth (%) 0 21.9
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.29 0.46
ROE (%) -0.58 4.22
ROCE (%) -0.39 6.49
Cash Conversion Cycle (days) 208.06 36

Valuation & price assessment

Q.1 Stock return of Silverline Technologies Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 13% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
13% 27.8% 50.5% -27.6%
Q.2 Valuation ratios of Silverline Technologies Ltd vs historical?
The current P/E ratio of 5.07 is higher than its historical median of , indicating that the stock is trading above its historical average valuation.
Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median
5-year
Industry Median
Price to Earnings 5.07 - 47.38
Price to Book 0.81 0.09 2.64
Price to Sales 0.5 3.84 4.79
EV to EBITDA 5.07 -31.22 16.75

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