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INVESTMENT INSIGHTS

Check Before You Invest : Prodocs Solutions Ltd

BSE: 544643 NSE: ISIN: INE10XK01019
  |   Sector:  IT & ITES   |   Industry:  BPO/ITeS

Snapshot

Q.1 Which industry/sub-sector does Prodocs Solutions Ltd belong to?
Prodocs Solutions Ltd belongs to the IT & ITES sector, operating specifically within the BPO/ITeS segment.
Q.2 Is Prodocs Solutions Ltd a good quality company?
Prodocs Solutions Ltd is a average quality company, based on a somewhat consistent 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 Prodocs Solutions Ltd undervalued or overvalued?
Prodocs Solutions Ltd appears 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 3-year
Historic Median
Price to Earnings 24.7 26.55
Price to Book 3.06 3.33
Price to Sales 3.02 3.25
EV to EBITDA 16.37 17.53
Q.4 Is Prodocs Solutions Ltd a good buy now?
Prodocs Solutions 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 Prodocs Solutions Ltd?
Prodocs Solutions Ltd revenue growth is -8% for FY-2025, which is below its 3-year CAGR of 61.51%, indicating slower growth.

Q.2 Gross Profit margin of Prodocs Solutions Ltd?
Prodocs Solutions Ltd Gross profit margin which is the profit after deduction of direct costs, is 17.3% for FY-2025, which is above its 3-year median of 9.3%, indicating increasing margins.

Q.3 Operating Profit Margin of Prodocs Solutions Ltd?
Prodocs Solutions Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 17.21% for FY-2025, which is above its 3-year median of 9.67% indicating increasing margins.

Q.4 Net Profit Margin of Prodocs Solutions Ltd?
Prodocs Solutions Ltd Net Profit Margin is 12.22% for FY-2025, is above its 3-year median of 6.96%, indicating increasing margins.
Current Level 3-year
Historic Median
Gross Profit Margin (%) 17.3 9.3
Operating Profit Margin (%) 17.21 9.67
Net Profit Margin (%) 12.22 6.96

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Prodocs Solutions Ltd?
Prodocs Solutions Ltd Return on Asset is 21.26%, which is below its 3-year historical median of 23.99%, indicating deteriorated asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Prodocs Solutions Ltd?
Prodocs Solutions Ltd Return on capital employed is 41.9% for FY-2025, which is below its 3-year historical median of 57.11%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 14%, indicating value creation.

Q.7 Return on Equity (ROE) of Prodocs Solutions Ltd?
Prodocs Solutions Ltd Return on equity is 40.78% for FY-2025, which is below its 3-year historical median of 73.06%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of Prodocs Solutions Ltd?
Prodocs Solutions Ltd Cash conversion cycle is 33 days, above its 3-year historical median of 14 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.
Current Level 3-year
Historic Median
Asset Turnover (x) 1.74 4.41
ROE (%) 40.78 73.06
ROCE (%) 41.9 57.11
Cash Conversion Cycle 33 days 14 days

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

Q.9 Debt to Equity ratio of Prodocs Solutions Ltd?
Prodocs Solutions Ltd Debt-to-Equity ratio is 0.42, which is above the industry average of 0.05, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Prodocs Solutions Ltd?
Prodocs Solutions Ltd Debt to cash flow from operations is 2.61, which is at a moderate level.

Ownership & governance

D: Promoter shareholding and pledge status of Prodocs Solutions Ltd?

Q.1 Promoter shareholding and pledge status of Prodocs Solutions Ltd?
Promoters hold 51.99% of the Prodocs Solutions Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Prodocs Solutions Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Prodocs Solutions Ltd vs industry peers?
Prodocs Solutions Ltd revenue CAGR is 61.51%, compared to the industry median CAGR of 12.89%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 3-year
Industry Median
Revenue Growth (%) -8 12.9
Gross Profit Growth (%) 75 18.6
Operating Profit Growth (%) 75 22.7
Net Profit Growth (%) 66.7 17.8
Operating Efficiency
Current Level 3-year
Industry Median
Asset Turnover (x) 1.74 0.74
ROE (%) 40.78 10.01
ROCE (%) 41.9 13.44
Cash Conversion Cycle (days) 32.75 43

Valuation & price assessment

Q.1 Stock return of Prodocs Solutions Ltd over the last decade?
Over the last - year(s), the stock has delivered a CAGR of N/A% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR		 - - - -
Q.2 Valuation ratios of Prodocs Solutions Ltd vs historical?
The current P/E ratio of 24.7 is lower than its historical median of 26.55, 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 24.7 26.55 31.48
Price to Book 3.06 3.33 3.05
Price to Sales 3.02 3.25 4.04
EV to EBITDA 16.37 17.53 14.62

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