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INVESTMENT INSIGHTS

Check Before You Invest : Tera Software Ltd

BSE: 533982 NSE: TERASOFT ISIN: INE482B01010
  |   Sector:  IT & ITES   |   Industry:  IT - Software

Snapshot

Q.1 Which industry/sub-sector does Tera Software Ltd belong to?
Tera Software Ltd belongs to the IT & ITES sector, operating specifically within the IT - Software segment.
Q.2 Is Tera Software Ltd a good quality company?
Tera Software Ltd is a weak quality company, based on a inconsistent 10 year financial track record.
Q.3 Is Tera Software Ltd undervalued or overvalued?
Tera Software Ltd appears Overvalued, as its key valuation ratios are above with their past averages.
Q.4 Is Tera Software Ltd a good buy now?
Tera Software Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Performance Analysis

Q.1 Revenue growth of Tera Software Ltd?
Tera Software Ltd revenue growth is 27.4% for FY-2025 , which is above its 5 year CAGR of -16.7% , indicating faster growth.
Q.2 Gross Profit margin of Tera Software Ltd?
Tera Software Ltd Gross profit margin which is the profit after deduction of direct costs, is 11.7% for FY-2025 , which is above its 5 year median of 6.8% , indicating increasing margins.
Q.3 Operating Profit Margin of Tera Software Ltd?
Tera Software Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 11.44% for FY-2025 , which is above its 5 year median of 6.47% indicating increasing margins.
Q.4 Net Profit Margin of Tera Software Ltd?
Tera Software Ltd Net Profit Margin is 8.75% for FY-2025 , is above with its 5 year median of 2.65%, indicating increasing margins.
Current Level Historic Median
Gross Profit Margin 11.7 6.8
Operating Profit Margin 11.44 6.47
Net Profit Margin 8.75 2.65
Q.5 Return on Asset of Tera Software Ltd?
Tera Software Ltd Return on Asset is 4.53%, which is above its 5 year historical median of 1.49%, indicating improved asset utilization efficiency.
Q.6 Return on Equity (ROE) of Tera Software Ltd?
Tera Software Ltd Return on equity is 8.02% for FY-2025 , which is above its historical median of 3.22%, indicating the business is making better use of its shareholders capital.
Q.7 Return on capital employed (ROCE) of Tera Software Ltd?
Tera Software Ltd Return on capital employed is 11.25% for FY-2025 , which is below its estimated weighted average cost of capital(WACC) 14%, indicating value preservation.
Q.8 Cash conversion cycle of Tera Software Ltd?
Tera Software Ltd Cash conversion cycle is -453 days, above its historical median of -822 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.
Current Level Historic Median
Asset Turnover 0.52 0.52
ROE 8.02 3.22
ROCE 11.25 6.79
Cash Conversion Cycle -453 days -822 days
Q.9 Debt to Equity ratio of Tera Software Ltd?
Tera Software Ltd Debt-to-Equity ratio is 0.16 , which is above with the industry average of 0.01 , indicating higher debt levels in the industry.
Q.10 Debt to cash flow from operations of Tera Software Ltd?
Tera Software Ltd Debt to cash flow from operations is 2.93 , which is at a moderate level.

Ownership & governance

Q.1 Promoter shareholding and pledge status of Tera Software Ltd?
Promoters hold 47.53% of the Tera Software Ltd, with 19.88% of their stake pledged, indicating high pledge risk.

Peer comparison (industry-wise, mcap)

Q.1 Revenue growth of Tera Software Ltd vs industry peers?
Tera Software Ltd revenue CAGR is -16.74% , compared to the industry median CAGR of 2.87% , indicating stable growth and maintaining its market share.
Profit Metrics
Current Level Industry Median
Revenue 107.6 23.6
Gross Profit 12.6 2
Operating Profit 12 1.2
Net Profit 9 0.8
Operating Efficiency
Current Level Industry Median
Asset Turnover 0.52 0.45
ROE 8.02 4.22
ROCE 11.25 6.53
Cash Conversion Cycle (days) -453 36

Valuation & price assessment

Q.1 Stock return of Tera Software Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 13.5% based on the current price.
Q.2 What return has the stock given over the last decade?
9Y 5Y 3Y 1Y
Share Price 13.5% 58.9% 113.3% 47.5%
Q.3 Valuation ratios of Tera Software 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 21.77 9.14 22.96
Price to Book 3.19 0.32 2.61
Price to Sales 2.27 0.14 4.40
EV to EBITDA 13.61 0.00 17.20

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