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Check Before You Invest : Ekennis Software Service Ltd

BSE: 543475 NSE: ISIN: INE0KCM01010
  |   Sector:  IT & ITES   |   Industry:  IT - Software

Snapshot

Q.1 Which industry/sub-sector does Ekennis Software Service Ltd belong to?
Ekennis Software Service Ltd belongs to the IT & ITES sector, operating specifically within the IT - Software segment.
Q.2 Is Ekennis Software Service Ltd a good quality company?
Ekennis Software Service 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 Ekennis Software Service Ltd undervalued or overvalued?
Ekennis Software Service Ltd appears 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 - 12.24
Price to Book 5.87 2.82
Price to Sales 9.16 3.65
EV to EBITDA -22.69 10.18
Q.4 Is Ekennis Software Service Ltd a good buy now?
Ekennis Software Service 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 Ekennis Software Service Ltd?
Ekennis Software Service Ltd revenue growth is -19.9% for FY-2025, which is below its 5-year CAGR of -14.81%, indicating slower growth.

Q.2 Gross Profit margin of Ekennis Software Service Ltd?
Ekennis Software Service Ltd Gross profit margin which is the profit after deduction of direct costs, is -59.1% for FY-2025, which is below its 5-year median of 19.9%, indicating decreasing margins.

Q.3 Operating Profit Margin of Ekennis Software Service Ltd?
Ekennis Software Service Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is -49.98% for FY-2025, which is below its 5-year median of 17.89% indicating decreasing margins.

Q.4 Net Profit Margin of Ekennis Software Service Ltd?
Ekennis Software Service Ltd Net Profit Margin is -74.05% for FY-2025, is below its 5-year median of 12.39%, indicating decreasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) -59.1 19.9
Operating Profit Margin (%) -49.98 17.89
Net Profit Margin (%) -74.05 12.39

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Ekennis Software Service Ltd?
Ekennis Software Service Ltd Return on Asset is -24.66%, which is below its 5-year historical median of 13.84%, indicating deteriorated asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Ekennis Software Service Ltd?
Ekennis Software Service Ltd Return on capital employed is -21.22% for FY-2025, which is below its 5-year historical median of 23.73%. 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 Ekennis Software Service Ltd?
Ekennis Software Service Ltd Return on equity is -38.35% for FY-2025, which is below its 5-year historical median of 16.7%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of Ekennis Software Service Ltd?
Ekennis Software Service Ltd Cash conversion cycle is 69 days, above its 5-year historical median of 28 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) 0.33 1.12
ROE (%) -38.35 16.7
ROCE (%) -21.22 23.73
Cash Conversion Cycle 69 days 28 days

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

Q.9 Debt to Equity ratio of Ekennis Software Service Ltd?
Ekennis Software Service Ltd Debt-to-Equity ratio is 1.00, 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 Ekennis Software Service Ltd?
Ekennis Software Service Ltd Debt to cash flow from operations is -17.52, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Ekennis Software Service Ltd?

Q.1 Promoter shareholding and pledge status of Ekennis Software Service Ltd?
Promoters hold 71.43% of the Ekennis Software Service Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

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

Q.1 Revenue growth of Ekennis Software Service Ltd vs industry peers?
Ekennis Software Service Ltd revenue CAGR is -14.81%, 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 (%) -19.9 3.2
Gross Profit Growth (%) -596.2 18.4
Operating Profit Growth (%) -1,190 18.8
Net Profit Growth (%) -16,300 21.9
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.33 0.46
ROE (%) -38.35 4.22
ROCE (%) -21.22 6.49
Cash Conversion Cycle (days) 69.44 36

Valuation & price assessment

Q.1 Stock return of Ekennis Software Service Ltd over the last decade?
Over the last 3 year(s), the stock has delivered a CAGR of 5.66% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
- - 5.7% 154.9%
Q.2 Valuation ratios of Ekennis Software Service Ltd vs historical?
The current P/E ratio of 0 is lower than its historical median of 12.24, 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 - 12.24 47.38
Price to Book 5.87 2.82 2.64
Price to Sales 9.16 3.65 4.79
EV to EBITDA -22.69 10.18 16.75

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