1. At a Glance – Blink and You’ll Miss It
Xchanging Solutions Ltd is that quiet IT stock sitting at ₹72, pretending nothing dramatic is happening, while casually posting ₹202 crore in annual sales, 33% operating margins, and a P/E of just ~14 in a sector where 25+ is considered “reasonable”. Market cap? A modest ₹807 crore—basically pocket change in IT-land.
Three-month return: -17.9%.
One-year return: -32.2%.
Dividend yield: 2.76%, with a dividend payout ratio that screams “accountant lost control of the calculator” at 937% last year.
Promoters (aka the parent) own 75%, zero pledging, and the balance sheet looks cleaner than most midcap IT names. Yet the stock trades like it’s being punished for crimes it didn’t commit.
So what’s going on? Is this a hidden cash machine stuck inside a forgotten NSE ticker, or a structurally stagnant IT body shop wearing premium margins as makeup?
Let’s investigate. 🕵️♂️
2. Introduction – The IT Stock Nobody Talks About
Xchanging Solutions Ltd was incorporated in 2002, back when Indian IT companies were still convincing global clients that outsourcing won’t destroy civilization. Today, Xchanging operates as a niche IT services provider with a heavy overseas footprint—81% of revenue from the USA, another 10% from Singapore, and Europe barely showing up for attendance.
The company is majority-owned by DXC Technology Company, a global IT behemoth listed in the US. In theory, this should mean:
- Stable business
- Global contracts
- Predictable cash flows
In practice, Xchanging behaves like that overqualified employee who never gets promoted and is told to “just keep doing what you’re doing”.
Sales have barely moved over 5–10 years, yet profits have quietly improved. Margins are expanding. Cash flows are positive (mostly). Debt is manageable. But growth? That word is treated like a suspicious stranger.
So the real question:
👉 Is Xchanging a cash cow trapped in a no-growth cage, or a turnaround story nobody bothered to read past page one?
3. Business Model –
WTF Do They Even Do?
Let’s simplify this without drowning in IT jargon.
Xchanging Solutions does:
- IT software services
- IT hardware & IT-enabled services (ITES)
- Computer programming services
In plain English: enterprise IT grunt work with decent margins, mostly for overseas clients, largely within the DXC ecosystem.
This is not a SaaS rocketship.
This is not AI hype.
This is steady, contractual, predictable IT services.
Revenue breakup (FY24):
- Software services: ~89%
- Interest income: ~10%
- Other non-operating income: ~1%
Yes, interest income is doing heavy lifting here—already a yellow sticky note for later.
Geography-wise:
- USA: ~81%
- Singapore: ~10%
- India: ~7%
- Europe & RoW: rounding errors
The company also has overseas subsidiaries in USA and Singapore, while one Indian step-down subsidiary is already under liquidation (RIP, Nexplicit Infotech).
This is a support-and-maintain IT model, not a growth-led digital transformation fairy tale. Which is fine… unless you expect the market to reward you like Infosys.
4. Financials Overview – The Numbers Don’t Lie, But They Do Smirk
Quarterly Comparison Table (₹ crore)
| Metric | Latest Qtr | YoY Qtr | Prev Qtr | YoY % | QoQ % |
|---|---|---|---|---|---|
| Revenue | 48.8 | 46.0 | 53.0 | 6.97% | -7.9% |
| EBITDA | 16.0 | 14.0 | 17.0 | 14.3% | -5.9% |
| PAT | 13.2 | 14.5 | 16.0 | -8.98% | -17.5% |
| EPS (₹) | 1.18 | 1.30 | 1.46 | -9.2% | -19.2% |
Annualised EPS (Q3 rule):
Average of Q1–Q3 EPS ≈ 1.22 × 4 = ₹4.9–5.0, broadly matching TTM EPS of ₹5.2.
👉 Commentary time:
- Revenue is stable but not exciting
- Margins are very healthy
- PAT volatility
