IT stock engaged in providing smart city solutions and integrated services reached the 5 percent upper price band following a 247 percent increase in net profits year-on-year.
Price Movement
In Monday’s trading session, the share price of Tera Software Ltd. hit a 5 percent upper circuit limit reaching Rs.76.62 per share, from its previous closing price of Rs.72.98 apiece. The share has generated returns of more than 83 percent in a year.
Financial Performance
The uptrend in the stock price was driven by robust financial results, with increases in net profits and revenue from operations.
With a market capitalization of Rs.96 crores, Tera Software Ltd. reported consolidated revenue of Rs.24.46 crores for the quarter ending June 2024. This marks a 26 percent increase from Rs.19.44 crores in the same quarter last year and a 6 percent rise from Rs.23.14 crores in Q4 FY24.
The company saw a remarkable 246.8 percent year-over-year increase in Profit After Tax (PAT), reaching Rs.2.74 crores in Q1 FY25, up from Rs.0.79 crores in the June 2023 quarter. On a quarter-on-quarter basis, PAT increased by 59.3 percent from Rs.1.72 crores in Q4 FY24.
Tera Software Ltd. has shown remarkable growth in liquidity and earnings ratios. Its price-to-earnings ratio stands at 21.59, significantly lower than the industry average of 53.2. The company showcases a strong current ratio of 1.93 and a debt-to-equity ratio of 0.3, reflecting solid liquidity.
In terms of return ratios, the Return on Capital Employed (ROCE) and Return on Equity (ROE) stand at 7.12 percent and 3.76 percent, respectively.
Business Segments
Tera Software operates across three key business segments: Integrated Solutions, Technical Division, and Projects Division. For the quarter ended June 2024 the company generated approximately 59.4 percent of its revenue from technical services and 40.7 percent from its projects division, showcasing its strong focus on delivering specialised IT solutions.
Recent Orders
Paschimanchal Vidyut Vitran Nigam Limited (PVVNL) Project: Tera Software has secured a Spot Billing System Project from PVVNL valued at Rs.169.66 crore, focusing on door-to-door meter reading and bill collection for 28,22,226 consumers in Meerut, Saharanpur, and Noida over three years.
Dakshinanchal Vidyut Vitran Nigam Ltd. (DVVNL) Project: The company has also been awarded a Spot Billing System Project by DVVNL for Rs.166.32 crore, which includes similar services for 27,87,780 consumers in Agra and Aligarh for a three-year period.
Shareholding Pattern
As per the June 2024 shareholding pattern, the promoters of Tera Software Ltd. hold a 47.53 percent stake, while Foreign Institutional Investors hold a negligible 0.01 percent stake. Retail investors, comprising individual investors and others, hold the majority stake of 52.45 percent in the company.
About the Company
TSL is a professional service provider in the IT industry, known for executing Build-Operate-Transfer (BOT) projects across 22 states in India. The company operates over 3,000 outlets nationwide and focuses on delivering hardware and software services through long-term contracts primarily with government organisations. .
Written by – Siddesh S Raskar
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