Stock Performance and Price Movement
The stock opened sharply lower today, registering a gap down of 4.57% and settling at Rs.83.5, which also represented the intraday low. Notably, the price has remained at this level throughout the trading session, reflecting a lack of upward momentum. This marks the fourth consecutive day of losses, during which the stock has declined by 13.87%. Over the past 20 trading days, the stock did not trade on two occasions, indicating sporadic liquidity or trading interest.
ERP Soft Systems has underperformed its sector by 2.86% today, while the broader Sensex index opened 94.55 points lower, down 0.18% at 84,543.92. Despite the Sensex being only 1.91% below its 52-week high of 86,159.02, ERP Soft Systems has diverged markedly, reflecting sector-specific and company-specific pressures.
The stock is currently trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, signalling a persistent bearish trend. This technical positioning underscores the challenges faced by the stock in regaining investor confidence.
Long-Term Performance and Valuation Metrics
Over the last year, ERP Soft Systems has delivered a negative return of 46.82%, in stark contrast to the Sensex’s positive 8.05% gain over the same period. The stock’s 52-week high was Rs.157, highlighting the extent of the decline to the current low of Rs.83.5.
From a fundamental perspective, the company’s long-term financial indicators have been subdued. The average Return on Equity (ROE) stands at a modest 1.39%, reflecting limited profitability relative to shareholder equity. Net sales have grown at an annualised rate of just 1.43% over the past five years, while operating profit has increased by 1.55% annually, indicating slow growth momentum.
Debt servicing capacity remains constrained, with an average EBIT to interest coverage ratio of 0.32, suggesting that earnings before interest and tax are insufficient to comfortably cover interest expenses. This financial strain is a key factor in the stock’s valuation and market perception.
Despite the low ROE, the stock trades at a Price to Book Value ratio of 1.9, which is relatively expensive given the company’s earnings profile. However, it is currently trading at a discount compared to its peers’ historical valuations, reflecting market caution.
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Recent Financial Results and Profitability
The company reported flat results in the quarter ended September 2025, with no significant improvement in key financial metrics. Despite the subdued revenue growth, profits have risen by 16% over the past year, contributing to a Price/Earnings to Growth (PEG) ratio of 0.8. This indicates that while earnings growth has been positive, it has not translated into a corresponding uplift in share price performance.
ERP Soft Systems has consistently underperformed the BSE500 index over the last three years, one year, and three months, highlighting persistent challenges in both long-term and near-term performance.
The majority shareholding remains with the promoters, maintaining control over corporate decisions and strategic direction.
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Market Context and Sector Overview
The Diversified Commercial Services sector, to which ERP Soft Systems belongs, has experienced mixed performance in recent months. While the broader market indices such as the Sensex have hovered near record highs, individual stocks within the sector have faced varied fortunes. ERP Soft Systems’ current valuation and price action reflect company-specific factors rather than sector-wide trends.
Technical indicators reinforce the subdued sentiment, with the stock trading below all major moving averages, signalling a lack of upward momentum. The absence of trading activity on two days in the last 20 sessions further points to intermittent liquidity concerns.
Overall, the stock’s trajectory over the past year and recent sessions highlights a period of consolidation at lower price levels, following a significant correction from its 52-week high of Rs.157.
Summary of Key Metrics
To summarise, ERP Soft Systems Ltd’s key metrics as of 30 Dec 2025 are:
- New 52-week low price: Rs.83.5
- One-year return: -46.82%
- Sector underperformance today: -2.86%
- Consecutive days of decline: 4
- Price to Book Value: 1.9
- Average ROE: 1.39%
- Annualised Net Sales growth (5 years): 1.43%
- Annualised Operating Profit growth (5 years): 1.55%
- EBIT to Interest coverage ratio: 0.32
- Mojo Score: 23.0 (Strong Sell, upgraded from Sell on 25 Jun 2025)
The stock’s current Mojo Grade is Strong Sell, reflecting the combination of weak fundamental strength, limited growth prospects, and valuation concerns.
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