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OFSS - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.5
| Stock Code | OFSS | Market Cap | 67,503 Cr. | Current Price | 7,754 ₹ | High / Low | 9,950 ₹ |
| Stock P/E | 19.3 | Book Value | 732 ₹ | Dividend Yield | 3.42 % | ROCE | 62.5 % |
| ROE | 48.8 % | Face Value | 5.00 ₹ | DMA 50 | 7,932 ₹ | DMA 200 | 8,465 ₹ |
| Chg in FII Hold | -0.30 % | Chg in DII Hold | 0.37 % | PAT Qtr | 614 Cr. | PAT Prev Qtr | 463 Cr. |
| RSI | 47.0 | MACD | -1.44 | Volume | 59,393 | Avg Vol 1Wk | 1,04,552 |
| Low price | 7,038 ₹ | High price | 9,950 ₹ | PEG Ratio | 0.85 | Debt to equity | 0.00 |
| 52w Index | 24.6 % | Qtr Profit Var | 27.3 % | EPS | 403 ₹ | Industry PE | 45.7 |
📊 Core Financials
- Revenue & Profitability: Quarterly PAT rose from ₹463 Cr. to ₹614 Cr. (+27.3%), showing strong growth momentum. EPS at ₹403 reflects robust earnings power.
- Return Metrics: ROE at 48.8% and ROCE at 62.5% highlight exceptional capital efficiency and profitability.
- Debt Position: Debt-to-equity ratio at 0.00 indicates a debt-free balance sheet, enhancing financial stability.
- Cash Flow: Dividend yield of 3.42% provides attractive shareholder returns alongside growth.
💹 Valuation Indicators
- P/E Ratio: 19.3, significantly lower than industry average of 45.7, suggesting undervaluation.
- P/B Ratio: Current Price ₹7,754 vs. Book Value ₹732 → ~10.6, reflecting premium valuation relative to book value.
- PEG Ratio: 0.85, attractive, indicating growth-adjusted valuation is reasonable.
- Intrinsic Value: Strong fundamentals and low P/E relative to peers suggest intrinsic value higher than current price.
💻 Business Model & Competitive Advantage
- Oracle Financial Services Software (OFSS) provides IT solutions for banking and financial services, a niche with high demand and sticky client relationships.
- Competitive advantage lies in global presence, strong parent backing (Oracle), and specialized domain expertise.
- High ROE and ROCE demonstrate operational excellence and strong profitability.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive accumulation range between ₹7,200–7,600, closer to 52-week low.
- Long-Term Holding: Suitable for investors seeking consistent profitability, dividends, and exposure to BFSI tech; strong candidate for long-term compounding.
Positive
- Exceptional ROE (48.8%) and ROCE (62.5%).
- Debt-free balance sheet ensures financial resilience.
- Dividend yield of 3.42% provides steady returns.
- Quarterly PAT growth of 27.3% highlights strong momentum.
Limitation
- P/B ratio at ~10.6 indicates steep premium valuation.
- Stock trading below DMA 50 (₹7,932) and DMA 200 (₹8,465), showing bearish technical trend.
- FII holdings reduced (-0.30%), reflecting lower foreign investor confidence.
Company Negative News
- Decline in FII holdings (-0.30%).
- MACD negative (-1.44), signaling weak momentum.
Company Positive News
- Quarterly PAT surged to ₹614 Cr. from ₹463 Cr.
- DII holdings increased (+0.37%), showing domestic institutional support.
- Dividend yield remains attractive at 3.42%.
Industry
- IT services industry P/E at 45.7, much higher than OFSS’s 19.3, highlighting undervaluation.
- Sector outlook supported by digital transformation in BFSI and global demand for financial IT solutions.
Conclusion
- OFSS demonstrates strong profitability, high returns, and a debt-free balance sheet.
- Despite premium P/B valuation, low P/E relative to industry and strong fundamentals make it attractive.
- Accumulation near ₹7,200–7,600 is recommended, with strong potential for long-term compounding and dividend income.
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