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Check Before You Invest : Prostarm Info Systems Ltd

BSE: 544410 NSE: PROSTARM ISIN: INE0BX301013
  |   Sector:  Capital Goods & Industrial Consumables   |   Industry:  Electric Equipment

Snapshot

Q.1 Which industry/sub-sector does Prostarm Info Systems Ltd belong to?
Prostarm Info Systems Ltd belongs to the Capital Goods & Industrial Consumables sector, operating specifically within the Electric Equipment segment.
Q.2 Is Prostarm Info Systems Ltd a good quality company?
Prostarm Info Systems 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 Prostarm Info Systems Ltd undervalued or overvalued?
Prostarm Info Systems Ltd appears Fair, as its key valuation ratios are in line with 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 28.88 30.64
Price to Book 3.23 3.32
Price to Sales 2.69 2.74
EV to EBITDA 18.5 19.57
Q.4 Is Prostarm Info Systems Ltd a good buy now?
Prostarm Info Systems Ltd is a good buy now, based on strong price trend analysis suggesting prices may rise. 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 Prostarm Info Systems Ltd?
Prostarm Info Systems Ltd revenue growth is 35.1% for FY-2025, which is above its 3-year CAGR of 26.44%, indicating faster growth.

Q.2 Gross Profit margin of Prostarm Info Systems Ltd?
Prostarm Info Systems Ltd Gross profit margin which is the profit after deduction of direct costs, is 12.7% for FY-2025, which is in line with its 3-year median of 12.7%, indicating stable margins.

Q.3 Operating Profit Margin of Prostarm Info Systems Ltd?
Prostarm Info Systems Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 13.77% for FY-2025, which is in line with its 3-year median of 13.77% indicating stable margins.

Q.4 Net Profit Margin of Prostarm Info Systems Ltd?
Prostarm Info Systems Ltd Net Profit Margin is 8.82% for FY-2025, is in line with its 3-year median of 8.99%, indicating stable margins.
Current Level 3-year
Historic Median
Gross Profit Margin (%) 12.7 12.7
Operating Profit Margin (%) 13.77 13.77
Net Profit Margin (%) 8.82 8.99

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Prostarm Info Systems Ltd?
Prostarm Info Systems Ltd Return on Asset is 13.33%, which is in line with its 3-year historical median of 13.41%, indicating stable asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Prostarm Info Systems Ltd?
Prostarm Info Systems Ltd Return on capital employed is 29.95% for FY-2025, which is below its 3-year historical median of 33.56%. 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 Prostarm Info Systems Ltd?
Prostarm Info Systems Ltd Return on equity is 30.08% for FY-2025, which is below its 3-year historical median of 32.29%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of Prostarm Info Systems Ltd?
Prostarm Info Systems Ltd Cash conversion cycle is 89 days, in line with its 3-year historical median of 85 days, indicating stable working capital management. However, you need to compare this with its peers in the industry.
Current Level 3-year
Historic Median
Asset Turnover (x) 1.51 1.51
ROE (%) 30.08 32.29
ROCE (%) 29.95 33.56
Cash Conversion Cycle 89 days 85 days

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

Q.9 Debt to Equity ratio of Prostarm Info Systems Ltd?
Prostarm Info Systems Ltd Debt-to-Equity ratio is 0.58, which is above the industry average of 0.29, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Prostarm Info Systems Ltd?
Prostarm Info Systems Ltd Debt to cash flow from operations is -11.77, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Prostarm Info Systems Ltd?

Q.1 Promoter shareholding and pledge status of Prostarm Info Systems Ltd?
Promoters hold 72.82% of the Prostarm Info Systems Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Prostarm Info Systems Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Prostarm Info Systems Ltd vs industry peers?
Prostarm Info Systems Ltd revenue CAGR is 26.44%, compared to the industry median CAGR of 24.05%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 3-year
Industry Median
Revenue Growth (%) 35.1 24.1
Gross Profit Growth (%) 29.4 39.5
Operating Profit Growth (%) 33.3 42.8
Net Profit Growth (%) 29.2 44.2
Operating Efficiency
Current Level 3-year
Industry Median
Asset Turnover (x) 1.51 1.18
ROE (%) 30.08 14.12
ROCE (%) 29.95 17.12
Cash Conversion Cycle (days) 89.06 85

Valuation & price assessment

Q.1 Stock return of Prostarm Info Systems 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 Prostarm Info Systems Ltd vs historical?
The current P/E ratio of 28.88 is lower than its historical median of 30.64, 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 28.88 30.64 43.78
Price to Book 3.23 3.32 4.74
Price to Sales 2.69 2.74 3.09
EV to EBITDA 18.5 19.57 21.60

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