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Check Before You Invest : Cigniti Technologies Ltd

BSE: 534758 NSE: CIGNITITEC ISIN: INE675C01017
  |   Sector:  IT & ITES   |   Industry:  IT - Software

Snapshot

Q.1 Which industry/sub-sector does Cigniti Technologies Ltd belong to?
Cigniti Technologies Ltd belongs to the IT & ITES sector, operating specifically within the IT - Software segment.
Q.2 Is Cigniti Technologies Ltd a good quality company?
Cigniti Technologies Ltd is a good quality company, based on a consistently good 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 Cigniti Technologies Ltd undervalued or overvalued?
Cigniti Technologies 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 18.69 30.02
Price to Book 4.66 5.26
Price to Sales 2.84 3.86
EV to EBITDA 12.16 17.21
Q.4 Is Cigniti Technologies Ltd a good buy now?
Cigniti Technologies Ltd is a good buy now, based on strong price trend analysis suggesting prices may rise. 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 Cigniti Technologies Ltd?
Cigniti Technologies Ltd revenue growth is 27.7% for FY-2025, which is in line with its 5-year CAGR of 27.37%, indicating stable growth.

Q.2 Gross Profit margin of Cigniti Technologies Ltd?
Cigniti Technologies Ltd Gross profit margin which is the profit after deduction of direct costs, is 21.8% for FY-2025, which is in line with its 5-year median of 21.8%, indicating stable margins.

Q.3 Operating Profit Margin of Cigniti Technologies Ltd?
Cigniti Technologies Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 19.53% for FY-2025, which is in line with its 5-year median of 19.53% indicating stable margins.

Q.4 Net Profit Margin of Cigniti Technologies Ltd?
Cigniti Technologies Ltd Net Profit Margin is 12.14% for FY-2025, is in line with its 5-year median of 12.14%, indicating stable margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 21.8 21.8
Operating Profit Margin (%) 19.53 19.53
Net Profit Margin (%) 12.14 12.14

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Cigniti Technologies Ltd?
Cigniti Technologies Ltd Return on Asset is 16.63%, which is above its 5-year historical median of 15.21%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Cigniti Technologies Ltd?
Cigniti Technologies Ltd Return on capital employed is 27.61% for FY-2025, which is above its 5-year historical median of 25.38%. 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 Cigniti Technologies Ltd?
Cigniti Technologies Ltd Return on equity is 21.17% for FY-2025, which is in line with its 5-year historical median of 20.2%, indicating the business is making similar use of its shareholders capital.

Q.8 Cash conversion cycle of Cigniti Technologies Ltd?
Cigniti Technologies Ltd Cash conversion cycle is 49 days, in line with its 5-year historical median of 49 days, indicating stable working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 1.37 1.27
ROE (%) 21.17 20.2
ROCE (%) 27.61 25.38
Cash Conversion Cycle 49 days 49 days

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

Q.9 Debt to Equity ratio of Cigniti Technologies Ltd?
Cigniti Technologies Ltd Debt-to-Equity ratio is 0.00, which is lower the industry average of 0.01, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Cigniti Technologies Ltd?
Cigniti Technologies Ltd Debt to cash flow from operations is 0, which is at a healthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Cigniti Technologies Ltd?

Q.1 Promoter shareholding and pledge status of Cigniti Technologies Ltd?
Promoters hold 54.00% of the Cigniti Technologies Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Cigniti Technologies Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Cigniti Technologies Ltd vs industry peers?
Cigniti Technologies Ltd revenue CAGR is 27.37%, 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 (%) 27.7 3.2
Gross Profit Growth (%) 48.7 18.4
Operating Profit Growth (%) 56.8 18.8
Net Profit Growth (%) 28.4 21.9
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 1.37 0.46
ROE (%) 21.17 4.22
ROCE (%) 27.61 6.49
Cash Conversion Cycle (days) 49.49 36

Valuation & price assessment

Q.1 Stock return of Cigniti Technologies Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 11.8% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
11.8% 29.2% 16.2% -4.1%
Q.2 Valuation ratios of Cigniti Technologies Ltd vs historical?
The current P/E ratio of 18.69 is lower than its historical median of 30.02, 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 18.69 30.02 47.38
Price to Book 4.66 5.26 2.64
Price to Sales 2.84 3.86 4.79
EV to EBITDA 12.16 17.21 16.75

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