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INVESTMENT INSIGHTS

Check Before You Invest : SoftTech Engineers Ltd

BSE: 543470 NSE: SOFTTECH ISIN: INE728Z01015
  |   Sector:  IT & ITES   |   Industry:  IT - Software

Snapshot

Q.1 Which industry/sub-sector does SoftTech Engineers Ltd belong to?
SoftTech Engineers Ltd belongs to the IT & ITES sector, operating specifically within the IT - Software segment.
Q.2 Is SoftTech Engineers Ltd a good quality company?
SoftTech Engineers Ltd is a average quality company, based on a somewhat consistent 10 year financial track record.
Q.3 Is SoftTech Engineers Ltd undervalued or overvalued?
SoftTech Engineers Ltd appears Fair, as its key valuation ratios are in line with their past averages.
Q.4 Is SoftTech Engineers Ltd a good buy now?
SoftTech Engineers 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

Q.1 Revenue growth of SoftTech Engineers Ltd?
SoftTech Engineers Ltd revenue growth is 18.8% for FY-2025 , which is above its 5 year CAGR of 10% , indicating faster growth.
Q.2 Gross Profit margin of SoftTech Engineers Ltd?
SoftTech Engineers Ltd Gross profit margin which is the profit after deduction of direct costs, is 24.8% for FY-2025 , which is below its 5 year median of 26.8% , indicating decreasing margins.
Q.3 Operating Profit Margin of SoftTech Engineers Ltd?
SoftTech Engineers Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 27.17% for FY-2025 , which is below its 5 year median of 29.87% indicating decreasing margins.
Q.4 Net Profit Margin of SoftTech Engineers Ltd?
SoftTech Engineers Ltd Net Profit Margin is 4.43% for FY-2025 , is below with its 5 year median of 8.87%, indicating decreasing margins.
Current Level Historic Median
Gross Profit Margin 24.8 26.8
Operating Profit Margin 27.17 29.87
Net Profit Margin 4.43 8.87
Q.5 Return on Asset of SoftTech Engineers Ltd?
SoftTech Engineers Ltd Return on Asset is 1.81%, which is below its 5 year historical median of 3.77%, indicating deteriorated asset utilization efficiency.
Q.6 Return on Equity (ROE) of SoftTech Engineers Ltd?
SoftTech Engineers Ltd Return on equity is 2.65% for FY-2025 , which is below its historical median of 5.88%, indicating the business is making worse use of its shareholders capital.
Q.7 Return on capital employed (ROCE) of SoftTech Engineers Ltd?
SoftTech Engineers Ltd Return on capital employed is 5.88% for FY-2025 , which is below its estimated weighted average cost of capital(WACC) 14%, indicating value preservation.
Q.8 Cash conversion cycle of SoftTech Engineers Ltd?
SoftTech Engineers Ltd Cash conversion cycle is 104 days, above its historical median of 104 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.
Current Level Historic Median
Asset Turnover 0.41 0.43
ROE 2.65 5.88
ROCE 5.88 8.92
Cash Conversion Cycle 104 days 104 days
Q.9 Debt to Equity ratio of SoftTech Engineers Ltd?
SoftTech Engineers Ltd Debt-to-Equity ratio is 0.19 , which is above with the industry average of 0.01 , indicating higher debt levels in the industry.
Q.10 Debt to cash flow from operations of SoftTech Engineers Ltd?
SoftTech Engineers Ltd Debt to cash flow from operations is 1.13 , which is at a healthy level, indicating the business is able to service its debt comfortably.

Ownership & governance

Q.1 Promoter shareholding and pledge status of SoftTech Engineers Ltd?
Promoters hold 18.84% of the SoftTech Engineers Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

Q.1 Revenue growth of SoftTech Engineers Ltd vs industry peers?
SoftTech Engineers Ltd revenue CAGR is 10.01% , compared to the industry median CAGR of 2.48% , indicating faster growth and gaining its market share.
Profit Metrics
Current Level Industry Median
Revenue 93.4 23.6
Gross Profit 23.1 1.9
Operating Profit 25 1.2
Net Profit 4 0.8
Operating Efficiency
Current Level Industry Median
Asset Turnover 0.41 0.45
ROE 2.65 4.09
ROCE 5.88 6.4
Cash Conversion Cycle (days) 103.87 36

Valuation & price assessment

Q.1 Stock return of SoftTech Engineers Ltd over the last decade?
Over the last 5 year(s), the stock has delivered a CAGR of 27.92% based on the current price.
Q.2 What return has the stock given over the last decade?
9Y 5Y 3Y 1Y
Share Price - 27.9% 27.7% -14.4%
Q.3 Valuation ratios of SoftTech Engineers Ltd vs historical?
The current P/E is higher that its historical median.
Q.4 How do the current valuation ratios measure up against the historic numbers and the current industry numbers?
Valuation Ratios Current Historic Median Industry Median
Price to Earnings 72.93 29.80 22.96
Price to Book 2.27 1.65 2.61
Price to Sales 3.74 2.53 4.40
EV to EBITDA 11.96 8.81 17.20

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