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INVESTMENT INSIGHTS

Check Before You Invest : Sofcom Systems Ltd

BSE: 538923 NSE: ISIN: INE499Q01012
  |   Sector:  IT & ITES   |   Industry:  IT - Software

Snapshot

Q.1 Which industry/sub-sector does Sofcom Systems Ltd belong to?
Sofcom Systems Ltd belongs to the IT & ITES sector, operating specifically within the IT - Software segment.
Q.2 Is Sofcom Systems Ltd a good quality company?
Sofcom Systems Ltd is a quality company, based on a 10 year financial track record.
Q.3 Is Sofcom Systems Ltd undervalued or overvalued?
Sofcom Systems Ltd appears Overvalued, as its key valuation ratios are above with their past averages.
Q.4 Is Sofcom Systems Ltd a good buy now?
Sofcom Systems 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

Q.1 Revenue growth of Sofcom Systems Ltd?
Sofcom Systems Ltd revenue growth is 2,127.8% for FY-2025 , which is above its 5 year CAGR of 0% , indicating faster growth.
Q.2 Gross Profit margin of Sofcom Systems Ltd?
Sofcom Systems Ltd Gross profit margin which is the profit after deduction of direct costs, is 9.1% for FY-2025 , which is in line with its 5 year median of 9.1% , indicating stable margins.
Q.3 Operating Profit Margin of Sofcom Systems Ltd?
Sofcom Systems Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 8.92% for FY-2025 , which is in line with its 5 year median of 8.92% indicating stable margins.
Q.4 Net Profit Margin of Sofcom Systems Ltd?
Sofcom Systems Ltd Net Profit Margin is 9.66% for FY-2025 , is in line with with its 5 year median of 9.66%, indicating stable margins.
Current Level Historic Median
Gross Profit Margin 9.1 9.1
Operating Profit Margin 8.92 8.92
Net Profit Margin 9.66 9.66
Q.5 Return on Asset of Sofcom Systems Ltd?
Sofcom Systems Ltd Return on Asset is 1.54%, which is in line with its 5 year historical median of 1.54%, indicating stable asset utilization efficiency.
Q.6 Return on Equity (ROE) of Sofcom Systems Ltd?
Sofcom Systems Ltd Return on equity is 1.58% for FY-2025 , which is in line with its historical median of 1.58%, indicating the business is making similar use of its shareholders capital.
Q.7 Return on capital employed (ROCE) of Sofcom Systems Ltd?
Sofcom Systems Ltd Return on capital employed is 1.44% for FY-2025 , which is below its estimated weighted average cost of capital(WACC) 14%, indicating value preservation.
Q.8 Cash conversion cycle of Sofcom Systems Ltd?
Sofcom Systems Ltd Cash conversion cycle is -5610 days, below its historical median of -106 days, indicating improved working capital management. However, you need to compare this with its peers in the industry.
Current Level Historic Median
Asset Turnover 0.16 0.07
ROE 1.58 1.58
ROCE 1.44 1.44
Cash Conversion Cycle -5610 days -106 days
Q.9 Debt to Equity ratio of Sofcom Systems Ltd?
Sofcom Systems Ltd Debt-to-Equity ratio is 0.00 , which is lower with the industry average of 0.01 , indicating lower debt levels in the industry.
Q.10 Debt to cash flow from operations of Sofcom Systems Ltd?
Sofcom Systems Ltd Debt to cash flow from operations is -3.12 , which is at a unhealthy level.

Ownership & governance

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

Peer comparison (industry-wise, mcap)

Q.1 Revenue growth of Sofcom Systems Ltd vs industry peers?
Sofcom Systems Ltd revenue CAGR is 0.00% , compared to the industry median CAGR of 2.87% , indicating slower growth and losing its market share.
Profit Metrics
Current Level Industry Median
Revenue 8 23.3
Gross Profit 0.7 1.8
Operating Profit 0.7 1
Net Profit 0.8 0.8
Operating Efficiency
Current Level Industry Median
Asset Turnover 0.16 0.44
ROE 1.58 3.97
ROCE 1.44 6.41
Cash Conversion Cycle (days) -5610.35 36

Valuation & price assessment

Q.1 Stock return of Sofcom Systems Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of -2.1% based on the current price.
Q.2 What return has the stock given over the last decade?
9Y 5Y 3Y 1Y
Share Price -2.1% 15.3% -18% -71%
Q.3 Valuation ratios of Sofcom Systems Ltd vs historical?
The current P/E is higher that its historical median.
Q.4 How do the current valuation ratios measure up against the historic numbers and the current industry numbers?
Valuation Ratios Current Historic Median Industry Median
Price to Earnings 125.23 31.08 22.96
Price to Book 0.7 5.58 2.61
Price to Sales 83.87 9.73 4.40
EV to EBITDA 160.71 28.40 17.20

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