MoneyWorks4Me

Check Before You Invest : Watson Software Ltd

BSE: 516090 NSE: ISIN: INE950B01016
  |   Sector:  IT & ITES   |   Industry:  IT - Software

Snapshot

Q.1 Which industry/sub-sector does Watson Software Ltd belong to?
Watson Software Ltd belongs to the IT & ITES sector, operating specifically within the IT - Software segment.
Q.2 Is Watson Software Ltd a good quality company?
Watson Software 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 Watson Software Ltd undervalued or overvalued?
Watson Software Ltd appears Undervalued, as its key valuation ratios are lower 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 0-year
Historic Median
Price to Earnings - 29.72
Price to Book - 4.59
Price to Sales - 2.17
EV to EBITDA - 16.56
Q.4 Is Watson Software Ltd a good buy now?
Watson Software 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.

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

Q.1 Debt to Equity ratio of Watson Software Ltd?
Watson Software Ltd Debt-to-Equity ratio is 0.00, which is in line with the industry average of , indicating similar to debt levels in the industry.

Q.2 Debt to cash flow from operations of Watson Software Ltd?
Watson Software Ltd Debt to cash flow from operations is 0, which is at a healthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Watson Software Ltd?

Q.1 Promoter shareholding and pledge status of Watson Software Ltd?
Promoters hold 21.14% of the Watson Software Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Watson Software Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Watson Software Ltd vs industry peers?
Watson Software Ltd revenue CAGR is %, compared to the industry median CAGR of 0.00%, indicating stable growth and maintaining its market share.
Profit Metrics
Current Level 0-year
Industry Median
Revenue Growth (%) - 0
Gross Profit Growth (%) - 9.8
Operating Profit Growth (%) - 7.9
Net Profit Growth (%) - 8.1
Operating Efficiency
Current Level 0-year
Industry Median
Asset Turnover (x) - 0.93
ROE (%) - 9.58
ROCE (%) - 12.24
Cash Conversion Cycle (days) - 64

Valuation & price assessment

Q.1 Stock return of Watson Software Ltd over the last decade?
Over the last - year(s), the stock has delivered a CAGR of N/A% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
- - - -
Q.2 Valuation ratios of Watson Software Ltd vs historical?
The current P/E ratio of 0 is lower than its historical median of 29.72, indicating that the stock is trading below its historical average valuation.
Q.3 How do the current valuation ratios compare with 0-year historical median and industry numbers?
Valuation Ratios Current 0-year
Historic Median
0-year
Industry Median
Price to Earnings - 29.72 -
Price to Book - 4.59 -
Price to Sales - 2.17 -
EV to EBITDA - 16.56 -

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