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Check Before You Invest : Silver Touch Technologies Ltd

BSE: 543525 NSE: SILVERTUC ISIN: INE625X01026
  |   Sector:  IT & ITES   |   Industry:  IT - Software

Snapshot

Q.1 Which industry/sub-sector does Silver Touch Technologies Ltd belong to?
Silver Touch Technologies Ltd belongs to the IT & ITES sector, operating specifically within the IT - Software segment.
Q.2 Is Silver Touch Technologies Ltd a good quality company?
Silver Touch Technologies 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 Silver Touch Technologies Ltd undervalued or overvalued?
Silver Touch Technologies 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 5-year
Historic Median
Price to Earnings 47.95 64.67
Price to Book 10.77 7.06
Price to Sales 5.75 3.56
EV to EBITDA 28.95 33.95
Q.4 Is Silver Touch Technologies Ltd a good buy now?
Silver Touch Technologies 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 Silver Touch Technologies Ltd?
Silver Touch Technologies Ltd revenue growth is 29% for FY-2025, which is above its 5-year CAGR of 8.25%, indicating faster growth.

Q.2 Gross Profit margin of Silver Touch Technologies Ltd?
Silver Touch Technologies Ltd Gross profit margin which is the profit after deduction of direct costs, is 13.5% for FY-2025, which is above its 5-year median of 10.5%, indicating increasing margins.

Q.3 Operating Profit Margin of Silver Touch Technologies Ltd?
Silver Touch Technologies Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 13.72% for FY-2025, which is above its 5-year median of 9.83% indicating increasing margins.

Q.4 Net Profit Margin of Silver Touch Technologies Ltd?
Silver Touch Technologies Ltd Net Profit Margin is 8.51% for FY-2025, is above its 5-year median of 5.95%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 13.5 10.5
Operating Profit Margin (%) 13.72 9.83
Net Profit Margin (%) 8.51 5.95

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Silver Touch Technologies Ltd?
Silver Touch Technologies Ltd Return on Asset is 11.2%, which is above its 5-year historical median of 6.81%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Silver Touch Technologies Ltd?
Silver Touch Technologies Ltd Return on capital employed is 23.18% for FY-2025, which is above its 5-year historical median of 14.88%. 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 Silver Touch Technologies Ltd?
Silver Touch Technologies Ltd Return on equity is 18.92% for FY-2025, which is above its 5-year historical median of 10.14%, indicating the business is making better use of its shareholders capital.

Q.8 Cash conversion cycle of Silver Touch Technologies Ltd?
Silver Touch Technologies Ltd Cash conversion cycle is 72 days, above its 5-year historical median of 58 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) 1.32 1.15
ROE (%) 18.92 10.14
ROCE (%) 23.18 14.88
Cash Conversion Cycle 72 days 58 days

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

Q.9 Debt to Equity ratio of Silver Touch Technologies Ltd?
Silver Touch Technologies Ltd Debt-to-Equity ratio is 0.33, 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 Silver Touch Technologies Ltd?
Silver Touch Technologies Ltd Debt to cash flow from operations is -8.36, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Silver Touch Technologies Ltd?

Q.1 Promoter shareholding and pledge status of Silver Touch Technologies Ltd?
Promoters hold 74.62% of the Silver Touch Technologies Ltd, with 4.08% of their stake pledged, indicating low pledge risk.

Peer comparison (industry-wise, mcap)

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

Q.1 Revenue growth of Silver Touch Technologies Ltd vs industry peers?
Silver Touch Technologies Ltd revenue CAGR is 8.25%, compared to the industry median CAGR of 2.48%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 29 2.5
Gross Profit Growth (%) 44 18.3
Operating Profit Growth (%) 54.2 18
Net Profit Growth (%) 43.8 22
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 1.32 0.46
ROE (%) 18.92 3.97
ROCE (%) 23.18 6.41
Cash Conversion Cycle (days) 71.69 36

Valuation & price assessment

Q.1 Stock return of Silver Touch Technologies Ltd over the last decade?
Over the last 5 year(s), the stock has delivered a CAGR of 12.24% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
- 12.2% 61.6% 88.3%
Q.2 Valuation ratios of Silver Touch Technologies Ltd vs historical?
The current P/E ratio of 47.95 is lower than its historical median of 64.67, indicating that the stock is trading below 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 47.95 64.67 47.38
Price to Book 10.77 7.06 2.64
Price to Sales 5.75 3.56 4.79
EV to EBITDA 28.95 33.95 16.75

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