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Check Before You Invest : Blue Cloud Softech Solutions Ltd

BSE: 539607 NSE: ISIN: INE373T01047
  |   Sector:  IT & ITES   |   Industry:  IT - Software

Snapshot

Q.1 Which industry/sub-sector does Blue Cloud Softech Solutions Ltd belong to?
Blue Cloud Softech Solutions Ltd belongs to the IT & ITES sector, operating specifically within the IT - Software segment.
Q.2 Is Blue Cloud Softech Solutions Ltd a good quality company?
Blue Cloud Softech Solutions Ltd is a weak quality company, based on a inconsistent 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 Blue Cloud Softech Solutions Ltd undervalued or overvalued?
Blue Cloud Softech Solutions Ltd appears Somewhat 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 5-year
Historic Median
Price to Earnings 28.75 380.80
Price to Book 8.22 10.42
Price to Sales 2.23 14.95
EV to EBITDA 19.93 422.12
Q.4 Is Blue Cloud Softech Solutions Ltd a good buy now?
Blue Cloud Softech Solutions 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 Blue Cloud Softech Solutions Ltd?
Blue Cloud Softech Solutions Ltd revenue growth is 145.6% for FY-2025, which is below its 5-year CAGR of 449.73%, indicating slower growth.

Q.2 Gross Profit margin of Blue Cloud Softech Solutions Ltd?
Blue Cloud Softech Solutions Ltd Gross profit margin which is the profit after deduction of direct costs, is 10.2% for FY-2025, which is in line with its 5-year median of 10.2%, indicating stable margins.

Q.3 Operating Profit Margin of Blue Cloud Softech Solutions Ltd?
Blue Cloud Softech Solutions Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 10.3% for FY-2025, which is in line with its 5-year median of 10.3% indicating stable margins.

Q.4 Net Profit Margin of Blue Cloud Softech Solutions Ltd?
Blue Cloud Softech Solutions Ltd Net Profit Margin is 7.3% for FY-2025, is in line with its 5-year median of 7.3%, indicating stable margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 10.2 10.2
Operating Profit Margin (%) 10.3 10.3
Net Profit Margin (%) 7.3 7.3

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Blue Cloud Softech Solutions Ltd?
Blue Cloud Softech Solutions Ltd Return on Asset is 23.83%, which is above its 5-year historical median of 5.18%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Blue Cloud Softech Solutions Ltd?
Blue Cloud Softech Solutions Ltd Return on capital employed is 54.8% for FY-2025, which is above its 5-year historical median of 7.42%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 14%, indicating value creation.

Q.7 Return on Equity (ROE) of Blue Cloud Softech Solutions Ltd?
Blue Cloud Softech Solutions Ltd Return on equity is 43.6% for FY-2025, which is above its 5-year historical median of 5.68%, indicating the business is making better use of its shareholders capital.

Q.8 Cash conversion cycle of Blue Cloud Softech Solutions Ltd?
Blue Cloud Softech Solutions Ltd Cash conversion cycle is -1156 days, below its 5-year historical median of -23 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) 3.26 2.26
ROE (%) 43.6 5.68
ROCE (%) 54.8 7.42
Cash Conversion Cycle -1156 days -23 days

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

Q.9 Debt to Equity ratio of Blue Cloud Softech Solutions Ltd?
Blue Cloud Softech Solutions Ltd Debt-to-Equity ratio is 0.14, 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 Blue Cloud Softech Solutions Ltd?
Blue Cloud Softech Solutions Ltd Debt to cash flow from operations is -4.16, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Blue Cloud Softech Solutions Ltd?

Q.1 Promoter shareholding and pledge status of Blue Cloud Softech Solutions Ltd?
Promoters hold 38.44% of the Blue Cloud Softech Solutions Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Blue Cloud Softech Solutions Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Blue Cloud Softech Solutions Ltd vs industry peers?
Blue Cloud Softech Solutions Ltd revenue CAGR is 449.73%, 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 (%) 145.6 3.2
Gross Profit Growth (%) 537.5 18.4
Operating Profit Growth (%) 550 18.8
Net Profit Growth (%) 640 21.9
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 3.26 0.46
ROE (%) 43.6 4.22
ROCE (%) 54.8 6.49
Cash Conversion Cycle (days) -1155.66 36

Valuation & price assessment

Q.1 Stock return of Blue Cloud Softech Solutions Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 19.8% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
19.8% 30.7% -12.3% -2.3%
Q.2 Valuation ratios of Blue Cloud Softech Solutions Ltd vs historical?
The current P/E ratio of 28.75 is lower than its historical median of 380.80, indicating that the stock is trading below 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 28.75 380.80 47.38
Price to Book 8.22 10.42 2.64
Price to Sales 2.23 14.95 4.79
EV to EBITDA 19.93 422.12 16.75

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