BSE:532408

Stock Analysis Report

Executive Summary

Megasoft Limited, together with its subsidiaries, provides information technology services focusing on telecommunication domain primarily in the United States, Canada, South America, Latin America, the Middle East, Africa, and the Asia-Pacific.

Rewards

Trading at 82.3% below its fair value

Risk Analysis

Does not have a meaningful market cap (₹287M)

Profit margins (2.4%) are lower than last year (3.6%)



Snowflake Analysis

Adequate balance sheet and fair value.

Share Price & News

How has Megasoft's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 532408 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0.2%

532408

-1.2%

IN Software

0.2%

IN Market


1 Year Return

-26.7%

532408

-27.7%

IN Software

3.1%

IN Market

Return vs Industry: 532408 matched the Indian Software industry which returned -27.7% over the past year.

Return vs Market: 532408 underperformed the Indian Market which returned 3.1% over the past year.


Shareholder returns

532408IndustryMarket
7 Day0.2%-1.2%0.2%
30 Day-1.7%-3.4%0.1%
90 Day-0.2%-5.2%6.5%
1 Year-26.7%-26.7%-24.3%-27.7%5.1%3.1%
3 Year-68.7%-68.7%-13.0%-20.1%33.6%26.5%
5 Year29.3%29.3%3.7%-11.9%41.1%28.3%

Price Volatility Vs. Market

How volatile is Megasoft's share price compared to the market and industry in the last 5 years?


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Valuation

Is Megasoft undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 532408 (₹6.49) is trading below our estimate of fair value (₹36.65)

Significantly Below Fair Value: 532408 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 532408 is poor value based on its PE Ratio (17.3x) compared to the Software industry average (11.4x).

PE vs Market: 532408 is poor value based on its PE Ratio (17.3x) compared to the Indian market (12.8x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate 532408's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: 532408 is good value based on its PB Ratio (0.2x) compared to the IN Software industry average (1x).


Next Steps

Future Growth

How is Megasoft forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

16.3%

Forecasted Software industry annual growth in earnings


In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as Megasoft has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.


Next Steps

Past Performance

How has Megasoft performed over the past 5 years?

6.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 532408 has high quality earnings.

Growing Profit Margin: 532408's current net profit margins (2.4%) are lower than last year (3.6%).


Past Earnings Growth Analysis

Earnings Trend: 532408's earnings have grown by 6.6% per year over the past 5 years.

Accelerating Growth: 532408's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 532408 had negative earnings growth (-37.1%) over the past year, making it difficult to compare to the Software industry average (-4.2%).


Return on Equity

High ROE: 532408's Return on Equity (1%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Megasoft's financial position?


Financial Position Analysis

Short Term Liabilities: 532408's short term assets (₹819.5M) do not cover its short term liabilities (₹1.7B).

Long Term Liabilities: 532408's short term assets (₹819.5M) exceed its long term liabilities (₹138.5M).


Debt to Equity History and Analysis

Debt Level: 532408's debt to equity ratio (28.4%) is considered satisfactory.

Reducing Debt: 532408's debt to equity ratio has reduced from 42.9% to 28.4% over the past 5 years.

Debt Coverage: 532408's debt is well covered by operating cash flow (129.1%).

Interest Coverage: Insufficient data to determine if 532408's interest payments on its debt are well covered by EBIT.


Balance Sheet

Inventory Level: 532408 has a high level of physical assets or inventory.

Debt Coverage by Assets: 532408's debt is covered by short term assets (assets are 2.1x debt).


Next Steps

Dividend

What is Megasoft's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

company0%marketbottom25%0.6%markettop25%2.5%industryaverage2.1%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate 532408's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate 532408's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if 532408's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if 532408's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: 532408 is not paying a notable dividend for the Indian market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of 532408's dividend in 3 years as they are not forecast to pay a notable one for the Indian market.


Next Steps

Management

What is the CEO of Megasoft's salary, the management and board of directors tenure and is there insider trading?

4.3yrs

Average management tenure


CEO

Gandaravakottai Kumar (53yo)

0yrs

Tenure

₹3,898,000

Compensation

Mr. Gandaravakottai Venkataraman Kumar, B.E, MBA, has been the Managing Director at Megasoft Ltd. since April 1, 2006 and serves as its Chief Executive Officer. Mr. Kumar has been Executive Director of Meg ...


CEO Compensation Analysis

Compensation vs Market: Gandaravakottai's total compensation ($USD55.05K) is about average for companies of similar size in the Indian market ($USD50.96K).

Compensation vs Earnings: Gandaravakottai's compensation has been consistent with company performance over the past year.


Management Age and Tenure

4.3yrs

Average Tenure

Experienced Management: 532408's management team is considered experienced (4.3 years average tenure).


Board Age and Tenure

11.8yrs

Average Tenure

53.5yo

Average Age

Experienced Board: 532408's board of directors are seasoned and experienced ( 11.8 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Gandaravakottai Kumar (53yo)

    CEO, MD & Executive Director

    • Tenure: 0yrs
    • Compensation: ₹3.90m
  • S. Kumar

    VP & Delivery Head

    • Tenure: 0yrs
    • Compensation: ₹2.54m
  • R. Kishore (46yo)

    Vice President of Cloud Business

    • Tenure: 0yrs
    • Compensation: ₹208.00k
  • Shridhar Thathachary

    Chief Financial Officer

    • Tenure: 4.3yrs
    • Compensation: ₹3.84m
  • Sridhar Lanka

    Chief Technology Officer

    • Tenure: 0yrs
  • Umakanta Mansingh

    Head of Quality

    • Tenure: 8.9yrs
  • Manian Sivaramakrishnan

    Head of Marketing

    • Tenure: 0yrs
  • Derek Bowman

    Director of Business Development

    • Tenure: 0yrs
  • Jon Slates

    Director of Facilities & Operations

    • Tenure: 0yrs
  • Srivalli Manda

    Company Secretary & Compliance Officer

    • Tenure: 1.1yrs
    • Compensation: ₹314.34k

Board Members

  • Gandaravakottai Kumar (53yo)

    CEO, MD & Executive Director

    • Tenure: 0yrs
    • Compensation: ₹3.90m
  • Anil Sood (56yo)

    Independent Non-Executive Director

    • Tenure: 12.7yrs
    • Compensation: ₹165.00k
  • Anish Mathew (54yo)

    Independent Non-Executive Director

    • Tenure: 10.9yrs
    • Compensation: ₹105.00k
  • Leona Ambuja (33yo)

    Independent Non-Executive Woman Director

    • Tenure: 4.8yrs
    • Compensation: ₹165.00k

Company Information

Megasoft Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Megasoft Limited
  • Ticker: 532408
  • Exchange: BSE
  • Founded: 1994
  • Industry: Application Software
  • Sector: Software
  • Market Cap: ₹287.295m
  • Shares outstanding: 44.27m
  • Website: https://www.megasoft.com

Location

  • Megasoft Limited
  • Cyber Gateway
  • Level 5&6
  • Hyderabad
  • Andhra Pradesh
  • 500081
  • India

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
532408BSE (Mumbai Stock Exchange)YesEquity SharesININROct 2004
MEGASOFTNSEI (National Stock Exchange of India)YesEquity SharesININROct 2004

Biography

Megasoft Limited, together with its subsidiaries, provides information technology services focusing on telecommunication domain primarily in the United States, Canada, South America, Latin America, the Mid ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/14 12:32
End of Day Share Price2019/12/13 00:00
Earnings2019/09/30
Annual Earnings2019/03/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.