Oracle Financial Services Software (NSEI:OFSS) - Share price, News & Analysis

OFSS fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	3/6
Past Performance	4/6
Financial Health	6/6
Dividends	3/6

OFSS Stock Overview

Oracle Financial Services Software Limited provides information technology (IT) solutions and business processing services to the financial services industry worldwide.

Rewards

Trading at 17% below our estimate of its fair value

Earnings are forecast to grow 13.84% per year

Earnings have grown 10.2% per year over the past 5 years

Risk Analysis

Dividend of 6.08% is not well covered by earnings

Oracle Financial Services Software Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Oracle Financial Services Software
Historical stock prices
Current Share Price	₹3,121.35
52 Week High	₹5,145.00
52 Week Low	₹2,950.00
Beta	0.49
1 Month Change	1.25%
3 Month Change	-12.83%
1 Year Change	-14.09%
3 Year Change	-1.56%
5 Year Change	-13.52%
Change since IPO	277.11%

Recent News & Updates

May 24

Oracle Financial Services Software (NSE:OFSS) Will Be Hoping To Turn Its Returns On Capital Around

If we want to find a potential multi-bagger, often there are underlying trends that can provide clues. Firstly, we'll...

May 07

Oracle Financial Services Software's (NSE:OFSS) Dividend Will Be Reduced To ₹190

Oracle Financial Services Software Limited's ( NSE:OFSS ) dividend is being reduced to ₹190 on the 3rd of June. This...

Shareholder Returns

	OFSS	IN Software	IN Market
7D	4.3%	1.9%	2.3%
1Y	-14.1%	13.1%	-0.9%

Return vs Industry: OFSS underperformed the Indian Software industry which returned 12.1% over the past year.

Return vs Market: OFSS underperformed the Indian Market which returned -1.7% over the past year.

Price Volatility

Is OFSS's price volatile compared to industry and market?
OFSS volatility
OFSS Average Weekly Movement	4.4%
Software Industry Average Movement	8.3%
Market Average Movement	6.9%
10% most volatile stocks in IN Market	9.9%
10% least volatile stocks in IN Market	4.5%

Stable Share Price: OFSS is less volatile than 75% of Indian stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: OFSS's weekly volatility (4%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1989	7,884	Chet Kamat	https://www.oracle.com/industries/financial-services/index.html

Oracle Financial Services Software Limited provides information technology (IT) solutions and business processing services to the financial services industry worldwide. It operates through three segments: Product Licenses and Related Activities, IT Solutions and Consulting Services, and Business Process Outsourcing Services. The company offers Oracle FLEXCUBE, a banking solution for retail, corporate and investment banking, consumer lending, asset management, and investor servicing with payments; Oracle Banking Digital Experience, a digital transformation providing digital account and loan origination, digital wallet, and mobile payments; Oracle Banking APIs that enables banks to build partnerships with third-party technology organizations; and Oracle Banking Platform, a suite of business applications for banks.

Oracle Financial Services Software Fundamentals Summary

How do Oracle Financial Services Software's earnings and revenue compare to its market cap?
OFSS fundamental statistics
Market Cap	₹269.63b
Earnings (TTM)	₹18.89b
Revenue (TTM)	₹52.21b

14.3x

P/E Ratio

5.2x

P/S Ratio

Is OFSS overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
OFSS income statement (TTM)
Revenue	₹52.21b
Cost of Revenue	₹24.06b
Gross Profit	₹28.16b
Other Expenses	₹9.27b
Earnings	₹18.89b

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	218.75
Gross Margin	53.92%
Net Profit Margin	36.17%
Debt/Equity Ratio	0%

How did OFSS perform over the long term?

See historical performance and comparison

Dividends

6.1%

Current Dividend Yield

87%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is OFSS undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for OFSS?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for OFSS. This is calculated by dividing OFSS's market cap by their current preferred multiple.
What is OFSS's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	₹269.63b

OFSS key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	4.2x
Enterprise Value/EBITDA	8.8x
PEG Ratio	1x

Price to Earnings Ratio vs Peers

How does OFSS's PE Ratio compare to its peers?

OFSS PE Ratio vs Peers

The above table shows the PE ratio for OFSS vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	36.1x

Forward PE

Price-To-Earnings vs Peers: OFSS is good value based on its Price-To-Earnings Ratio (14.3x) compared to the peer average (36.1x).

Price to Earnings Ratio vs Industry

How does OFSS's PE Ratio compare vs other companies in the Indian Software Industry?

Price-To-Earnings vs Industry: OFSS is good value based on its Price-To-Earnings Ratio (14.3x) compared to the Indian Software industry average (25.7x)

Price to Earnings Ratio vs Fair Ratio

What is OFSS's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

OFSS PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	14.3x
Fair PE Ratio	30.8x

Price-To-Earnings vs Fair Ratio: OFSS is good value based on its Price-To-Earnings Ratio (14.3x) compared to the estimated Fair Price-To-Earnings Ratio (30.8x).

Share Price vs Fair Value

What is the Fair Price of OFSS when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: OFSS (₹3121.35) is trading below our estimate of fair value (₹3760.41)

Significantly Below Fair Value: OFSS is trading below fair value, but not by a significant amount.

Price to Earnings Growth Ratio

PEG Ratio: OFSS is poor value based on its PEG Ratio (1x)

Discover undervalued companies

Future Growth

How is Oracle Financial Services Software forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

Future Growth Score

3/6

Future Growth Score 3/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

13.8%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: OFSS's forecast earnings growth (13.8% per year) is above the savings rate (6.7%).

Earnings vs Market: OFSS's earnings (13.8% per year) are forecast to grow slower than the Indian market (17.5% per year).

High Growth Earnings: OFSS's earnings are forecast to grow, but not significantly.

Revenue vs Market: OFSS's revenue (13.5% per year) is forecast to grow faster than the Indian market (11.5% per year).

High Growth Revenue: OFSS's revenue (13.5% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: OFSS's Return on Equity is forecast to be high in 3 years time (32.4%)

Discover growth companies

Past Performance

How has Oracle Financial Services Software performed over the past 5 years?

Past Performance Score

4/6

Past Performance Score 4/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

10.2%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: OFSS has high quality earnings.

Growing Profit Margin: OFSS's current net profit margins (36.2%) are higher than last year (35.1%).

Past Earnings Growth Analysis

Earnings Trend: OFSS's earnings have grown by 10.2% per year over the past 5 years.

Accelerating Growth: OFSS's earnings growth over the past year (7.2%) is below its 5-year average (10.2% per year).

Earnings vs Industry: OFSS earnings growth over the past year (7.2%) underperformed the Software industry 32.8%.

Return on Equity

High ROE: OFSS's Return on Equity (26.6%) is considered high.

Discover strong past performing companies

Financial Health

How is Oracle Financial Services Software's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: OFSS's short term assets (₹66.4B) exceed its short term liabilities (₹9.9B).

Long Term Liabilities: OFSS's short term assets (₹66.4B) exceed its long term liabilities (₹6.5B).

Debt to Equity History and Analysis

Debt Level: OFSS is debt free.

Reducing Debt: OFSS has not had any debt for past 5 years.

Debt Coverage: OFSS has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: OFSS has no debt, therefore coverage of interest payments is not a concern.

Balance Sheet

Discover healthy companies

Dividend

What is Oracle Financial Services Software current dividend yield, its reliability and sustainability?

Dividend Score

4/6

Dividend Score 4/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

6.08%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: OFSS's dividend (6.08%) is higher than the bottom 25% of dividend payers in the Indian market (0.44%).

High Dividend: OFSS's dividend (6.08%) is in the top 25% of dividend payers in the Indian market (1.9%)

Stability and Growth of Payments

Stable Dividend: OFSS has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: OFSS has only been paying a dividend for 8 years, and since then payments have fallen.

Earnings Payout to Shareholders

Earnings Coverage: At its current payout ratio (86.7%), OFSS's payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its high cash payout ratio (90.2%), OFSS's dividend payments are not well covered by cash flows.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

13.4yrs

Average management tenure

CEO

Chet Kamat (60 yo)

11.67yrs

Tenure

₹47,300,000

Compensation

Mr. Chaitanya M. Kamat, also known as Chet, has been the Chief Executive Officer and Managing Director of Oracle Financial Services Software Limited since October 25, 2010. Mr. Kamat serves as Managing Dir...

CEO Compensation Analysis

Compensation vs Market: Chet's total compensation ($USD605.13K) is about average for companies of similar size in the Indian market ($USD611.16K).

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

Leadership Team

Experienced Management: OFSS's management team is seasoned and experienced (13.4 years average tenure).

Board Members

Experienced Board: OFSS's board of directors are considered experienced (6.1 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

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

Recent Insider Transactions

Ownership Breakdown

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

Data	Last Updated (UTC time)
Company Analysis	2022/06/24 00:00
End of Day Share Price	2022/06/24 00:00
Earnings	2022/03/31
Annual Earnings	2022/03/31