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Check Before You Invest : Euphoria Infotech (India) Ltd

BSE: 544094 NSE: ISIN: INE0PYT01018
  |   Sector:  IT & ITES   |   Industry:  IT - Software

Snapshot

Q.1 Which industry/sub-sector does Euphoria Infotech (India) Ltd belong to?
Euphoria Infotech (India) Ltd belongs to the IT & ITES sector, operating specifically within the IT - Software segment.
Q.2 Is Euphoria Infotech (India) Ltd a good quality company?
Euphoria Infotech (India) Ltd is a quality company, based on a 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 Euphoria Infotech (India) Ltd undervalued or overvalued?
Euphoria Infotech (India) Ltd appears 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 3-year
Historic Median
Price to Earnings 6.89 8.42
Price to Book 0.67 0.98
Price to Sales 0.7 1.14
EV to EBITDA 3.76 5.12
Q.4 Is Euphoria Infotech (India) Ltd a good buy now?
Euphoria Infotech (India) 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.

Q.1 Gross Profit margin of Euphoria Infotech (India) Ltd?
Euphoria Infotech (India) Ltd Gross profit margin which is the profit after deduction of direct costs, is 19.9% for FY-2025, which is below its 3-year median of 21.8%, indicating decreasing margins.

Q.2 Operating Profit Margin of Euphoria Infotech (India) Ltd?
Euphoria Infotech (India) Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 20.56% for FY-2025, which is below its 3-year median of 25.43% indicating decreasing margins.

Q.3 Net Profit Margin of Euphoria Infotech (India) Ltd?
Euphoria Infotech (India) Ltd Net Profit Margin is 13.55% for FY-2025, is below its 3-year median of 15.39%, indicating decreasing margins.
Current Level 3-year
Historic Median
Gross Profit Margin (%) 19.9 21.8
Operating Profit Margin (%) 20.56 25.43
Net Profit Margin (%) 13.55 15.39

B: Does the business utilize capital efficiently?

Q.4 Return on Asset of Euphoria Infotech (India) Ltd?
Euphoria Infotech (India) Ltd Return on Asset is 9.96%, which is in line with its 3-year historical median of 9.96%, indicating stable asset utilization efficiency.

Q.5 Return on capital employed (ROCE) of Euphoria Infotech (India) Ltd?
Euphoria Infotech (India) Ltd Return on capital employed is 17.04% for FY-2025, which is in line with its 3-year historical median of 17.04%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 14%, indicating value creation.

Q.6 Return on Equity (ROE) of Euphoria Infotech (India) Ltd?
Euphoria Infotech (India) Ltd Return on equity is 12.19% for FY-2025, which is in line with its 3-year historical median of 12.19%, indicating the business is making similar use of its shareholders capital.

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

Q.7 Debt to Equity ratio of Euphoria Infotech (India) Ltd?
Euphoria Infotech (India) Ltd Debt-to-Equity ratio is 0.07, which is above the industry average of 0.01, indicating higher debt levels in the industry.

Q.8 Debt to cash flow from operations of Euphoria Infotech (India) Ltd?
Euphoria Infotech (India) Ltd Debt to cash flow from operations is -1.98, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Euphoria Infotech (India) Ltd?

Q.1 Promoter shareholding and pledge status of Euphoria Infotech (India) Ltd?
Promoters hold 63.64% of the Euphoria Infotech (India) Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Euphoria Infotech (India) Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Euphoria Infotech (India) Ltd vs industry peers?
Euphoria Infotech (India) Ltd revenue CAGR is 0.00%, compared to the industry median CAGR of 9.84%, indicating slower growth and losing its market share.
Profit Metrics
Current Level 3-year
Industry Median
Revenue Growth (%) - 9.8
Gross Profit Growth (%) 100.8 23.4
Operating Profit Growth (%) 77.8 23.4
Net Profit Growth (%) 92.5 22
Operating Efficiency
Current Level 3-year
Industry Median
Asset Turnover (x) 0.73 0.52
ROE (%) 12.19 5.87
ROCE (%) 17.04 8.34
Cash Conversion Cycle (days) 302.5 40

Valuation & price assessment

Q.1 Stock return of Euphoria Infotech (India) Ltd over the last decade?
Over the last 1 year(s), the stock has delivered a CAGR of -18.67% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
- - - -18.7%
Q.2 Valuation ratios of Euphoria Infotech (India) Ltd vs historical?
The current P/E ratio of 6.89 is lower than its historical median of 8.42, indicating that the stock is trading below its historical average valuation.
Q.3 How do the current valuation ratios compare with 3-year historical median and industry numbers?
Valuation Ratios Current 3-year
Historic Median
3-year
Industry Median
Price to Earnings 6.89 8.42 46.11
Price to Book 0.67 0.98 2.78
Price to Sales 0.7 1.14 5.02
EV to EBITDA 3.76 5.12 17.30

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