Tera Software Ltd (TERASOFT) Stock Recommendation | Score, Valuation, Technicals & Financial Trend

Score

Click here to find our call on this stock

Strong Sell

Sell

Hold

Buy

Strong Buy

Comparison

Company

Score

Quality

Valuation

Financial

Technical

Softtech Enginee

Inspirisys Sol.

Tera Software

Onward Technolog

DigiSpice Tech.

Mindteck (India)

Cybertech Sys.

Allied Digital

Sattrix Infor.

Sahana Systems

TechD Cybersec.

Why is Tera Software Ltd ?

Strong ability to service debt as the company has a low Debt to EBITDA ratio of 1.07 times

With a growth in Net Sales of 26.38%, the company declared Very Positive results in Mar 26

The company has declared positive results for the last 5 consecutive quarters
ROCE(HY) Highest at 21.54%
DEBTORS TURNOVER RATIO(HY) Highest at 1.50 times
NET SALES(Q) Highest at Rs 74.74 cr

With ROCE of 20, it has a Attractive valuation with a 3.2 Enterprise value to Capital Employed

The stock is trading at a discount compared to its peers' average historical valuations
Over the past year, while the stock has generated a return of 50.37%, its profits have risen by 171.9% ; the PEG ratio of the company is 0.1

Despite the size of the company, domestic mutual funds hold only 0% of the company

Domestic mutual funds have capability to do in-depth on-the-ground research on companies- their small stake may signify either they are not comfortable at the price or the business

Consistent Returns over the last 3 years

Along with generating 50.37% returns in the last 1 year, the stock has outperformed BSE500 in each of the last 3 annual periods

Real-Time Research Report

Verdict Report

How much should you hold?

Overall Portfolio exposure to Tera Software should be less than 10%
Overall Portfolio exposure to Computers - Software & Consulting should be less than 30%

(If sector exposure > 30%, please use optimiser tool to see which are the best stocks to hold in Computers - Software & Consulting)

When to exit? - We will constantly monitor the company and suggest at the appropriate time to exit from the stock

Is Tera Software for you?

High Risk, High Return

Absolute

Risk Adjusted

Volatility

Tera Software

50.37%

0.96

52.53%

Sensex

-7.55%

-0.58

13.06%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

8.17%

EBIT Growth (5y)

39.72%

EBIT to Interest (avg)

3.40

Debt to EBITDA (avg)

3.93

Net Debt to Equity (avg)

0.23

Sales to Capital Employed (avg)

0.89

Tax Ratio

23.65%

Dividend Payout Ratio

Pledged Shares

19.88%

Institutional Holding

0.08%

ROCE (avg)

8.98%

ROE (avg)

12.24%

Valuation

Valuation Scorecard

Valuation grade scale :

Very Risky, Risky, Very Expensive, Expensive, Fair, Attractive, Very Attractive

Valuation Key Factors

Factor

Value

P/E Ratio

Industry P/E

Price to Book Value

3.73

EV to EBIT

16.07

EV to EBITDA

15.76

EV to Capital Employed

3.21

EV to Sales

2.43

PEG Ratio

0.13

Dividend Yield

0.23%

ROCE (Latest)

19.99%

ROE (Latest)

16.99%

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Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Mildly Bullish

Mildly Bearish

RSI

No Signal

Bollinger Bands

Mildly Bullish

Bullish

Moving Averages

Mildly Bearish (Daily)

KST

Mildly Bullish

Mildly Bearish

Dow Theory

No Trend

Mildly Bullish

OBV

Mildly Bullish

Technical Indicator Scale: Bearish, Mildly Bearish, Sideways, Mildly Bullish, Bullish Turned

Technical Movement

Analyse All Technical Factors

Financial Trend

Financial Trend Scorecard

Financial Trend scale:

Very Negative, Negative, Flat, Positive, Very Positive, Outstanding

27What is working for the Company

ROCE(HY)

Highest at 21.54%

DEBTORS TURNOVER RATIO(HY)

Highest at 1.50 times

NET SALES(Q)

Highest at Rs 74.74 cr

PAT(Q)

Highest at Rs 7.22 cr.

EPS(Q)

Highest at Rs 5.77

-4What is not working for the Company

INTEREST(9M)

At Rs 5.44 cr has Grown at 35.66%

CASH AND CASH EQUIVALENTS(HY)

Lowest at Rs 5.31 cr

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Here's what is working for Tera Software

Net Sales - Quarterly

At Rs 74.74 cr has Grown at 51.9% (vs previous 4Q average)

over average Net Sales of the previous four quarters of Rs 49.22 Cr

MOJO Watch

Near term sales trend is very positive

Net Sales (Rs Cr)

Debtors Turnover Ratio- Half Yearly

Highest at 1.50 times and Grown

each half year in the last five half yearly periods

MOJO Watch

Company has been able to settle its Debtors faster

Debtors Turnover Ratio

Net Sales - Quarterly

Highest at Rs 74.74 cr

in the last five quarters

MOJO Watch

Near term sales trend is positive

Net Sales (Rs Cr)

Profit After Tax (PAT) - Quarterly

Highest at Rs 7.22 cr.

in the last five quarters

MOJO Watch

Near term PAT trend is positive

PAT (Rs Cr)

Earnings per Share (EPS) - Quarterly

Highest at Rs 5.77

in the last five quarters

MOJO Watch

Increasing profitability; company has created higher earnings for shareholders

EPS (Rs)

Here's what is not working for Tera Software

Interest - Nine Monthly

At Rs 5.44 cr has Grown at 35.66%

over preceding nine months period

MOJO Watch

Rising interest cost signifies increased borrowings

Interest Paid (Rs cr)

Cash and Cash Equivalents - Half Yearly

Lowest at Rs 5.31 cr

in the last six half yearly periods

MOJO Watch

Short Term liquidity is deteriorating

Cash and Cash Equivalents

Non Operating Income - Quarterly

Highest at Rs 1.06 cr

in the last five quarters

MOJO Watch

Increased income from non business activities may not be sustainable

Non Operating Income