At a Glance

Vertexplus Technologies Ltd is a Jaipur-based IT services company catering to both government and private clients across sectors. While sales have stagnated, its FY25 net profit nearly quadrupled YoY. But with a ₹113 share price, 70x P/E, 4% ROE, and ballooning working capital — does the valuation make sense?

1️⃣ Introduction with Hook

🤖 IT stock at 70x earnings. Sounds like it just cracked a billion-dollar AI deal, right?

Wrong. Vertexplus Technologies is an SME-listed IT services firm with revenues declining for 3 years. Yet, it trades at nosebleed valuations—because sometimes, the story is more about “what might happen” than “what’s actually happening.”

So what’s cooking under the hood?

2️⃣ WTF Do They Even Do?

• Founded: 2010
• Headquarters: Jaipur
• Sector: IT Services (Strategy, Consulting, Infrastructure, Cloud, Digital Ops)
• Certifications: ISO 9001:2015 & ISO/IEC 27001:2013
• Clients: Across government, social sector, MSMEs

Think of it as a mini-Infosys meets regional outsourcing partner — mostly focused on public sector + small clients, not marquee multinationals.

3️⃣ Financials – Profit, Margins, ROE, Growth

🚨 Sales are declining. Margins compressed. But FY25 profit bounced a bit on lower depreciation and cost controls.

Not the kind of trend that commands 70x earnings, right?

4️⃣ Valuation – Is It Cheap, Meh, or Crack?

• Current Price: ₹113
• P/E: 70.1x
• Book Value: ₹43.9 → P/B = 2.56x
• Market Cap: ₹61.7 Cr
• FY25 PAT: ₹0.89 Cr

🔍 Fair Value Range:

Assuming a 15–20x P/E, realistic for low-growth IT services companies:

iniCopyEditFV = ₹1.61 (EPS) × 15–20 = ₹24 to ₹32/share

That means the stock is trading at ~3.5x its realistic fair value.

💥 Verdict: Crack valuation unless you believe they’re about to bag a government supercontract, enter GenAI, or get acquired.

5️⃣ What’s Cooking – News, Triggers, Drama

• ✅ May 2025: FY25 results showed net profit ₹2.83 Cr at consolidated level — up from ₹0.61 Cr
• 🚫 No dividend announced again
• 🔐 SDD (Structured Digital Database) compliance reports are clean
• 📉 Shareholders have reduced: 184 → 136 in 1 year

So while profit rose sharply, revenues are still flat or declining. No big client wins, no flashy announcements.

6️⃣ Balance Sheet – How Much Debt, How Many Dreams?

Debt is manageable, but capital employed is rising without proportionate revenue or profit growth.

7️⃣ Cash Flow – Sab Number Game Hai

Vertexplus is struggling to generate consistent free cash flow, which is worrying for a services firm.

8️⃣ Ratios – Sexy or Stressy?

📛 142 debtor days + no dividends = Cash crunch party. Clients aren’t paying on time, and working capital is bloated.

9️⃣ P&L Breakdown – Show Me the Money

• Sales: ₹18.34 Cr
• Operating Profit: ₹1.79 Cr
• Net Profit: ₹0.89 Cr
• Depreciation: ₹0.50 Cr
• Interest: ₹0.43 Cr

⚠️ Almost 50% of EBIT goes into interest and depreciation. That leaves very little on the table for growth.

🔟 Peer Comparison – Who Else in the Game?

👀 All other high-P/E IT stocks are showing double-digit ROE and rapid growth.

Vertexplus is… not.

1️⃣1️⃣ Miscellaneous – Shareholding, Promoters

• Promoters hold: 73%
• FIIs: Increased from 3.92% to 15.76% (👀 Interesting)
• Public: Down to 11.25%

FII interest is the only bullish sign — maybe some fund sees potential. But for now, it’s speculative.

🧠 EduInvesting Verdict™

🧨 Vertexplus is like a Bollywood IT company: high drama, low depth.
You’re paying premium prices (P/E 70) for a low-margin, no-dividend, declining-revenue business that struggles with collections and cash flows.

Unless a major turnaround or contract announcement is around the corner — this smells like valuation hopium.

🎯 Fair Value Range: ₹24–₹32

✍️ Written by Prashant | 📅 30 June 2025

Tags: Vertexplus Technologies, SME Stocks, Overvalued Stocks, IT Services, Jaipur Tech Startups, Indian IT Sector, EduInvesting Deep Dive, High PE Stocks