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INVESTMENT INSIGHTS

Check Before You Invest : USG Tech Solutions Ltd

BSE: 532402 NSE: ISIN: INE718B01017
  |   Sector:  IT & ITES   |   Industry:  IT - Software

Snapshot

Q.1 Which industry/sub-sector does USG Tech Solutions Ltd belong to?
USG Tech Solutions Ltd belongs to the IT & ITES sector, operating specifically within the IT - Software segment.
Q.2 Is USG Tech Solutions Ltd a good quality company?
USG Tech Solutions 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 USG Tech Solutions Ltd undervalued or overvalued?
USG Tech Solutions 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 3-year
Historic Median
Price to Earnings - -
Price to Book 1.16 0.95
Price to Sales - -
EV to EBITDA -245.21 -191.55
Q.4 Is USG Tech Solutions Ltd a good buy now?
USG Tech 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 USG Tech Solutions Ltd?
USG Tech Solutions Ltd revenue growth is 0% for FY-2025, which is in line with its 3-year CAGR of NA%, indicating stable growth.

Q.2 Gross Profit margin of USG Tech Solutions Ltd?
USG Tech Solutions Ltd Gross profit margin which is the profit after deduction of direct costs, is 616.9% for FY-2025, which is above its 3-year median of 95.5%, indicating increasing margins.

Q.3 Operating Profit Margin of USG Tech Solutions Ltd?
USG Tech Solutions Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 0% for FY-2025, which is above its 3-year median of -81.12% indicating increasing margins.

Q.4 Net Profit Margin of USG Tech Solutions Ltd?
USG Tech Solutions Ltd Net Profit Margin is -% for FY-2025, is below its 3-year median of 61.84%, indicating decreasing margins.
Current Level 3-year
Historic Median
Gross Profit Margin (%) 616.9 95.5
Operating Profit Margin (%) - -81.12
Net Profit Margin (%) - 61.84

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of USG Tech Solutions Ltd?
USG Tech Solutions Ltd Return on Asset is -1.14%, which is below its 3-year historical median of -0.82%, indicating deteriorated asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of USG Tech Solutions Ltd?
USG Tech Solutions Ltd Return on capital employed is -1.14% for FY-2025, which is below its 3-year historical median of -0.82%. 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 USG Tech Solutions Ltd?
USG Tech Solutions Ltd Return on equity is -1.24% for FY-2025, which is below its 3-year historical median of -0.88%, indicating the business is making worse use of its shareholders capital.

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

Q.8 Debt to Equity ratio of USG Tech Solutions Ltd?
USG Tech Solutions Ltd Debt-to-Equity ratio is 0.09, which is above the industry average of 0.01, indicating higher debt levels in the industry.

Q.9 Debt to cash flow from operations of USG Tech Solutions Ltd?
USG Tech Solutions Ltd Debt to cash flow from operations is -8.3, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of USG Tech Solutions Ltd?

Q.1 Promoter shareholding and pledge status of USG Tech Solutions Ltd?
Promoters hold 18.08% of the USG Tech Solutions Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does USG Tech Solutions Ltd performance compare with that of its Peers?

Q.1 Revenue growth of USG Tech Solutions Ltd vs industry peers?
USG Tech Solutions Ltd revenue CAGR is 0.00%, compared to the industry median CAGR of 9.94%, indicating slower growth and losing its market share.
Profit Metrics
Current Level 3-year
Industry Median
Revenue Growth (%) - 9.9
Gross Profit Growth (%) 0 24.3
Operating Profit Growth (%) 0 23.4
Net Profit Growth (%) 0 22.9
Operating Efficiency
Current Level 3-year
Industry Median
Asset Turnover (x) - 0.53
ROE (%) -1.24 5.88
ROCE (%) -1.14 8.44
Cash Conversion Cycle (days) - 40

Valuation & price assessment

Q.1 Stock return of USG Tech Solutions Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 14.7% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR		 14.7% 41.4% 47.5% -25.2%
Q.2 Valuation ratios of USG Tech Solutions Ltd vs historical?
The current P/E ratio of 0 is in line with than its historical median of , indicating that the stock is trading near its historical average valuation.
Q.3 How do the current valuation ratios compare with 3-year historical median and industry numbers?
Valuation Ratios Current 3-year
Historic Median		 3-year
Industry Median
Price to Earnings - - 46.11
Price to Book 1.16 0.95 2.78
Price to Sales - - 5.02
EV to EBITDA -245.21 -191.55 17.30

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