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Check Before You Invest : Unisys Softwares & Holding Industries Ltd

BSE: 531831 NSE: ISIN: INE200B01016
  |   Sector:  IT & ITES   |   Industry:  IT - Software

Snapshot

Q.1 Which industry/sub-sector does Unisys Softwares & Holding Industries Ltd belong to?
Unisys Softwares & Holding Industries Ltd belongs to the IT & ITES sector, operating specifically within the IT - Software segment.
Q.2 Is Unisys Softwares & Holding Industries Ltd a good quality company?
Unisys Softwares & Holding Industries Ltd is a quality company, based on a 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 Unisys Softwares & Holding Industries Ltd undervalued or overvalued?
Unisys Softwares & Holding Industries 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 5-year
Historic Median
Price to Earnings - -
Price to Book 0.25 0.25
Price to Sales 50.35 50.35
EV to EBITDA -0.74 -0.74
Q.4 Is Unisys Softwares & Holding Industries Ltd a good buy now?
Unisys Softwares & Holding Industries 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 Unisys Softwares & Holding Industries Ltd?
Unisys Softwares & Holding Industries Ltd revenue growth is -46.4% for FY-2022, which is above its 5-year CAGR of -80.34%, indicating faster growth.

Q.2 Gross Profit margin of Unisys Softwares & Holding Industries Ltd?
Unisys Softwares & Holding Industries Ltd Gross profit margin which is the profit after deduction of direct costs, is -1171.4% for FY-2022, which is below its 5-year median of -20.2%, indicating decreasing margins.

Q.3 Operating Profit Margin of Unisys Softwares & Holding Industries Ltd?
Unisys Softwares & Holding Industries Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is -1171.39% for FY-2022, which is below its 5-year median of -20.13% indicating decreasing margins.

Q.4 Net Profit Margin of Unisys Softwares & Holding Industries Ltd?
Unisys Softwares & Holding Industries Ltd Net Profit Margin is -1184.46% for FY-2022, is below its 5-year median of -22%, indicating decreasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) -1171.4 -20.2
Operating Profit Margin (%) -1171.39 -20.13
Net Profit Margin (%) -1184.46 -22

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Unisys Softwares & Holding Industries Ltd?
Unisys Softwares & Holding Industries Ltd Return on Asset is -3.92%, which is below its 5-year historical median of -2.27%, indicating deteriorated asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Unisys Softwares & Holding Industries Ltd?
Unisys Softwares & Holding Industries Ltd Return on capital employed is -4.37% for FY-2022, which is below its 5-year historical median of -2.71%. The current ROCE is below its estimated weighted average cost of capital (WACC) of 14%, indicating value preservation.

Q.7 Return on Equity (ROE) of Unisys Softwares & Holding Industries Ltd?
Unisys Softwares & Holding Industries Ltd Return on equity is -6.49% for FY-2022, which is below its 5-year historical median of -4.3%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of Unisys Softwares & Holding Industries Ltd?
Unisys Softwares & Holding Industries Ltd Cash conversion cycle is 10485 days, above its 5-year historical median of 589 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) - 0.41
ROE (%) -6.49 -4.3
ROCE (%) -4.37 -2.71
Cash Conversion Cycle 10485 days 589 days

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

Q.9 Debt to Equity ratio of Unisys Softwares & Holding Industries Ltd?
Unisys Softwares & Holding Industries Ltd Debt-to-Equity ratio is 0.50, 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 Unisys Softwares & Holding Industries Ltd?
Unisys Softwares & Holding Industries Ltd Debt to cash flow from operations is 2215.52, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Unisys Softwares & Holding Industries Ltd?

Q.1 Promoter shareholding and pledge status of Unisys Softwares & Holding Industries Ltd?
Promoters hold 19.76% of the Unisys Softwares & Holding Industries Ltd, with 1.10% of their stake pledged, indicating low pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Unisys Softwares & Holding Industries Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Unisys Softwares & Holding Industries Ltd vs industry peers?
Unisys Softwares & Holding Industries Ltd revenue CAGR is -80.34%, compared to the industry median CAGR of 3.17%, indicating slower growth and losing its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) -46.4 3.2
Gross Profit Growth (%) 0 18.4
Operating Profit Growth (%) 0 18.8
Net Profit Growth (%) 0 21.9
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) - 0.46
ROE (%) -6.49 4.22
ROCE (%) -4.37 6.49
Cash Conversion Cycle (days) 10485.19 36

Valuation & price assessment

Q.1 Stock return of Unisys Softwares & Holding Industries Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of -23.1% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
-23.1% - - -
Q.2 Valuation ratios of Unisys Softwares & Holding Industries Ltd vs historical?
The current P/E ratio of 0 is in line with than its historical median of , indicating that the stock is trading near 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 - - 47.38
Price to Book 0.25 0.25 2.64
Price to Sales 50.35 50.35 4.79
EV to EBITDA -0.74 -0.74 16.75

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