🟢 1. At a Glance
Systango Technologies Ltd is a ₹364 Cr NSE-SME stock that delivers AI, Web3, and cloud engineering solutions from India to the UK and US. With 58% profit CAGR, 34% OPM, 26% ROE, and zero debt, it’s the smallcap version of a Persistent Systems on protein shake. But… working capital cycles have gone from yoga-stretch to full-blown contortionist. Valuation is still sane at 15x PE – so what’s the catch?
👩💻 2. Hook – “This SME Tech Stock Is Eating AI Buzzwords for Breakfast”
They say small is beautiful. In Systango’s case, small is stealthy, profitable, and 3 years ahead of your tech stack.
This Indore-founded engineering shop is landing UK public sector clients, launching Google Cloud SaaS products, and casually acquiring London-based AI startups – all while delivering 34% margins and zero debt.
But wait… debtor days at 84? Working capital at 342 days? Are we dealing with tech or textile?
🧪 3. WTF Do They Even Do?
Systango is a digital engineering services company with a deep niche in:
- 🧠 AI/ML SaaS, Generative BI & Intelligent Document Processing (Ylabs products)
- 🌐 Web3 platforms, smart contracts, tokenization
- ☁️ Cloud migration & DevOps (Google Cloud partner)
- 📱 Mobile + Web app development (Web2 + Web3)
- 💼 Enterprise-grade services to BFSI, energy, public sector, and marketing tech firms
They operate through 3 delivery centers:
- 🇮🇳 India (HQ: Indore)
- 🇺🇸 US
- 🇬🇧 UK (majority client base)
They’re like Persistent x LTI Mindtree, minus the office plants and ₹10,000 Cr capex budgets.
💰 4. Financials – Profit, Margins, ROE, Growth
| Metric | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Revenue (₹ Cr) | 23 | 33 | 52 | 57 | 67 |
| Net Profit (₹ Cr) | 6 | 7 | 14 | 17 | 24 |
| OPM (%) | 29% | 23% | 30% | 31% | 34% |
| ROE (%) | 30% | 27% | 26% | 26% | 26% |
| ROCE (%) | 56% | 41% | 28% | 32% | 32% |
| EPS (₹) | 2.1 | 2.53 | 9.54 | 11.53 | 16.18 |
📌 5-year CAGR:
- Sales: 36%
- PAT: 58%
🧠 TL;DR:
- Profits have grown faster than any Indian IT midcap
- Margins elite (OPM 30%+)
- Extremely capital-efficient model
📉 5. Valuation – Is It Cheap, Meh, or Crack?
| Metric | Value |
|---|---|
| P/E (TTM) | 15.3x |
| P/B | 3.56x |
| EV/EBITDA | ~10x |
| PEG Ratio | ~0.3 (based on 5Y PAT CAGR) |
| Market Cap | ₹364 Cr |
🧮 Fair Value Range:
Let’s assume:
- FY26 EPS = ₹20
- Apply 20x–25x for growth + niche positioning
🎯 Fair Value Range: ₹400 – ₹500
CMP: ₹248 → still undervalued by 40–50% if they deliver.
🍿 6. What’s Cooking – News, Triggers, Drama
🚀 Growth Triggers:
- June 2025: Acquiring Tech Alchemy (UK AI design firm) for £1.5 million
- May 2024: Launched Ylabs IDP + Generative BI on Google Cloud Marketplace
- Feb 2025: Became authorized Google Cloud reseller in France
- Ongoing wins in UK’s public sector, energy sector, and Fortune 500 clients
👑 Leadership:
- CEO + MD: Vinita Rathi – Ex-Barclays, female founder, strong tech background
🧨 Risk Watch:
- April 2023: Auditor NBA & Associates resigned abruptly (never a great look)
- Working capital turning into a blackhole
🏦 7. Balance Sheet – How Much Debt, How Many Dreams?
| Metric | FY25 |
|---|---|
| Equity Capital | ₹15 Cr |
| Reserves | ₹88 Cr |
| Total Debt | ₹0 Cr |
| Total Assets | ₹112 Cr |
🧠 TL;DR:
- Debt-free ✔️
- Clean capital structure ✔️
- Q: Will acquisition be equity-dilutive? Awaiting final contours.
💵 8. Cash Flow – Sab Number Game Hai
| Year | CFO (₹ Cr) | CFI (₹ Cr) | CFF (₹ Cr) | Net |
|---|---|---|---|---|
| FY23 | ₹5 | -₹7 | ₹32 | ₹30 |
| FY24 | ₹9 | -₹40 | ₹0 | -₹31 |
| FY25 | ₹12 | ₹2 | ₹1 | ₹16 |
🧠 Big investment in FY24 (likely in IP, infra, or client onboarding). Positive cash flow in FY25 despite growing receivables.
🧮 9. Ratios – Sexy or Stressy?
| Ratio | Value |
|---|---|
| ROE | 26.3% |
| ROCE | 32.3% |
| OPM | 34% |
| Debtor Days | 84.1 (🔺) |
| Working Capital Days | 342 (🚨) |
| Debt/Equity | 0 |
📉 Red Flag:
- Massive WC cycle → small client base? Public sector payment lags?
🧾 10. P&L Breakdown – Show Me the Money
| Year | Revenue | EBITDA | PAT | OPM |
|---|---|---|---|---|
| FY23 | ₹52 Cr | ₹16 Cr | ₹14 Cr | 30% |
| FY24 | ₹57 Cr | ₹17 Cr | ₹17 Cr | 31% |
| FY25 | ₹67 Cr | ₹23 Cr | ₹24 Cr | 34% |
- High employee productivity → small team, large billings
- Zero interest, low depreciation → asset-light AF
🖥️ 11. Peer Comparison – Who Else Is in the Game?
| Company | P/E | ROE | ROCE | OPM | Revenue (₹ Cr) |
|---|---|---|---|---|---|
| Systango | 15x | 26% | 32% | 34% | 67 |
| Persistent | 65x | 24% | 30% | 17% | 11,938 |
| LTIMindtree | 34x | 22% | 27% | 17% | 38,008 |
| Tech M | 40x | 14% | 18% | 13% | 52,988 |
📌 TL;DR:
- Best margins in class ✅
- Cheapest valuation ✅
- Smallest size → biggest room to grow 🚀
📊 12. Miscellaneous – Shareholding, Promoters, KMP
| Group | Mar 2023 | Mar 2025 |
|---|---|---|
| Promoter | 71.96% → 72.07% ✅ | |
| Public | 22.07% → 26.5% 🔼 | |
| FIIs | 3.3% → 0.2% ❌ | |
| DIIs | 2.6% → 1.2% ❌ |
👩💼 KMP:
- Vinita Rathi, CEO – driving global biz dev
- Strong tech founder-led leadership, rare in SME space
🧑⚖️ 13. EduInvesting Verdict™
Systango is one of those rare SME tech companies that isn’t selling t-shirts with AI printed on them — they’re building real products, winning real clients, and scaling margins while staying debt-free.
But:
- ⚠️ 342 working capital days is bonkers
- 🧾 Auditor change in FY23 needs watching
- 🎯 Scale still limited – one bad client and the whole P&L shivers
Still, at 15x earnings, it’s possibly the cheapest AI+Web3+Cloud combo in India today.
🎯 Fair Value Range: ₹400 – ₹500
✍️ Written by Prashant | 📅 09 July 2025
Tags: Systango, SME tech, AI SaaS, Web3, cloud engineering, SME stocks, ROE, Generative BI, digital transformation, EduInvesting
