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INVESTMENT INSIGHTS

Check Before You Invest : Vama Industries Ltd

BSE: 512175 NSE: ISIN: INE685D01022
  |   Sector:  IT & ITES   |   Industry:  IT - Software

Snapshot

Q.1 Which industry/sub-sector does Vama Industries Ltd belong to?
Vama Industries Ltd belongs to the IT & ITES sector, operating specifically within the IT - Software segment.
Q.2 Is Vama Industries Ltd a good quality company?
Vama 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 Vama Industries Ltd undervalued or overvalued?
Vama Industries Ltd appears Somewhat 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 24.44 -
Price to Book 1.32 2.01
Price to Sales 1.71 2.78
EV to EBITDA 12.31 16.35
Q.4 Is Vama Industries Ltd a good buy now?
Vama 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 Vama Industries Ltd?
Vama Industries Ltd revenue growth is 1,133% for FY-2025, which is below its 5-year CAGR of 31.82%, indicating slower growth.

Q.2 Gross Profit margin of Vama Industries Ltd?
Vama Industries Ltd Gross profit margin which is the profit after deduction of direct costs, is 3% for FY-2025, which is above its 5-year median of 2.5%, indicating increasing margins.

Q.3 Operating Profit Margin of Vama Industries Ltd?
Vama Industries Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 3.57% for FY-2025, which is in line with its 5-year median of 3.57% indicating stable margins.

Q.4 Net Profit Margin of Vama Industries Ltd?
Vama Industries Ltd Net Profit Margin is 3.08% for FY-2025, is above its 5-year median of 0.65%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 3 2.5
Operating Profit Margin (%) 3.57 3.57
Net Profit Margin (%) 3.08 0.65

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Vama Industries Ltd?
Vama Industries Ltd Return on Asset is 6.63%, which is above its 5-year historical median of 0.22%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Vama Industries Ltd?
Vama Industries Ltd Return on capital employed is 11.86% for FY-2025, which is above its 5-year historical median of 6.64%. 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 Vama Industries Ltd?
Vama Industries Ltd Return on equity is 12.76% for FY-2025, which is above its 5-year historical median of 0.51%, indicating the business is making better use of its shareholders capital.

Q.8 Cash conversion cycle of Vama Industries Ltd?
Vama Industries Ltd Cash conversion cycle is 45 days, below its 5-year historical median of 355 days, indicating improved working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 2.15 0.33
ROE (%) 12.76 0.51
ROCE (%) 11.86 6.64
Cash Conversion Cycle 45 days 355 days

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

Q.9 Debt to Equity ratio of Vama Industries Ltd?
Vama Industries Ltd Debt-to-Equity ratio is 0.06, 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 Vama Industries Ltd?
Vama Industries Ltd Debt to cash flow from operations is 0.27, which is at a healthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Vama Industries Ltd?

Q.1 Promoter shareholding and pledge status of Vama Industries Ltd?
Promoters hold 42.94% of the Vama Industries Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Vama Industries Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Vama Industries Ltd vs industry peers?
Vama Industries Ltd revenue CAGR is 31.82%, compared to the industry median CAGR of 3.17%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 1 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) 2.15 0.46
ROE (%) 12.76 4.22
ROCE (%) 11.86 6.49
Cash Conversion Cycle (days) 45.34 36

Valuation & price assessment

Q.1 Stock return of Vama Industries Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of -2.3% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR		 -2.3% -9.8% -6.2% -32.5%
Q.2 Valuation ratios of Vama Industries Ltd vs historical?
The current P/E ratio of 24.44 is higher than its historical median of , indicating that the stock is trading above 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 24.44 - 47.38
Price to Book 1.32 2.01 2.64
Price to Sales 1.71 2.78 4.79
EV to EBITDA 12.31 16.35 16.75

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