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INVESTMENT INSIGHTS

Check Before You Invest : Compucom Software Ltd

BSE: 532339 NSE: COMPUSOFT ISIN: INE453B01029
  |   Sector:  IT & ITES   |   Industry:  IT - Education

Snapshot

Q.1 Which industry/sub-sector does Compucom Software Ltd belong to?
Compucom Software Ltd belongs to the IT & ITES sector, operating specifically within the IT - Education segment.
Q.2 Is Compucom Software Ltd a good quality company?
Compucom Software 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 Compucom Software Ltd undervalued or overvalued?
Compucom Software Ltd appears Somewhat overvalued, as its key valuation ratios are higher 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 41.38 35.64
Price to Book 0.75 1.25
Price to Sales 3.4 4.67
EV to EBITDA 8.5 9.27
Q.4 Is Compucom Software Ltd a good buy now?
Compucom Software Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. 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 Compucom Software Ltd?
Compucom Software Ltd revenue growth is -54.2% for FY-2025, which is below its 5-year CAGR of 15.66%, indicating slower growth.

Q.2 Gross Profit margin of Compucom Software Ltd?
Compucom Software Ltd Gross profit margin which is the profit after deduction of direct costs, is 31.5% for FY-2025, which is in line with its 5-year median of 31.5%, indicating stable margins.

Q.3 Operating Profit Margin of Compucom Software Ltd?
Compucom Software Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 26.59% for FY-2025, which is above its 5-year median of 17.71% indicating increasing margins.

Q.4 Net Profit Margin of Compucom Software Ltd?
Compucom Software Ltd Net Profit Margin is 7.84% for FY-2025, is below its 5-year median of 9.09%, indicating decreasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 31.5 31.5
Operating Profit Margin (%) 26.59 17.71
Net Profit Margin (%) 7.84 9.09

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Compucom Software Ltd?
Compucom Software Ltd Return on Asset is 1.19%, which is below its 5-year historical median of 2.6%, indicating deteriorated asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Compucom Software Ltd?
Compucom Software Ltd Return on capital employed is 4.06% for FY-2025, which is below its 5-year historical median of 5.47%. 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 Compucom Software Ltd?
Compucom Software Ltd Return on equity is 1.63% for FY-2025, which is below its 5-year historical median of 3.38%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of Compucom Software Ltd?
Compucom Software Ltd Cash conversion cycle is 664 days, above its 5-year historical median of 409 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) 0.15 0.18
ROE (%) 1.63 3.38
ROCE (%) 4.06 5.47
Cash Conversion Cycle 664 days 409 days

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

Q.9 Debt to Equity ratio of Compucom Software Ltd?
Compucom Software Ltd Debt-to-Equity ratio is 0.21, which is above the industry average of 0.00, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Compucom Software Ltd?
Compucom Software Ltd Debt to cash flow from operations is 0.76, which is at a healthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Compucom Software Ltd?

Q.1 Promoter shareholding and pledge status of Compucom Software Ltd?
Promoters hold 71.49% of the Compucom Software Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Compucom Software Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Compucom Software Ltd vs industry peers?
Compucom Software Ltd revenue CAGR is 15.66%, compared to the industry median CAGR of 0.00%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) -54.2 0
Gross Profit Growth (%) -30.8 19.3
Operating Profit Growth (%) -27.3 23.5
Net Profit Growth (%) -60 14.5
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.15 0.04
ROE (%) 1.63 0.02
ROCE (%) 4.06 0.29
Cash Conversion Cycle (days) 664.41 26

Valuation & price assessment

Q.1 Stock return of Compucom Software Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 3.5% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR		 3.5% 7.7% -9.2% -38.7%
Q.2 Valuation ratios of Compucom Software Ltd vs historical?
The current P/E ratio of 41.38 is higher than its historical median of 35.64, 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 41.38 35.64 31.69
Price to Book 0.75 1.25 1.07
Price to Sales 3.4 4.67 6.43
EV to EBITDA 8.5 9.27 9.28

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