At a Glance
California Software (Calsoft), once just another forgotten tech name from the 2000s, is suddenly back on the investor radar. With a 90% 1-year rally, zero dividends, and a rights issue to raise ₹46 Cr, retail gamblers (sorry, investors) are sniffing a turnaround. But are we looking at a phoenix or just a software-themed pigeon with glitter?
1. 🧲 Introduction – Kya Wapas Aayega Calsoft 2.0?
- Calsoft is older than your cousin’s Windows XP PC — incorporated in 1992.
- It makes software, says a lot of buzzwords (cloud, agile, digital transformation), but actual revenues still fit inside an Excel cell.
- Recent drama:
- Promoter holding jumped from 35.7% to 62.3% — hmm, suspiciously serious.
- Rights issue of ₹46.37 Cr to raise capital — partly paid shares. Retail fomo incoming.
- Stock has doubled in a year. But revenue? Not so much.
2. 👨💻 WTF Do They Even Do?
- Digital Business: Helping clients go “digital” – think cloud, AI, unicorn dreams.
- Digital Ops: Business process optimization, automation, etc. (Translation: selling slides).
- Digital Systems: Secure cloud infra, enterprise tech – but with ₹5 Cr sales, we assume it’s all talk.
- Offers:
- Product Development
- Validation & Testing
- Implementation & Support
- Sounds like Infosys… if Infosys were a street food startup with ₹1.99 Cr in quarterly revenue.
3. 📊 Financials – Profit, Margins, ROE, Growth
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | ₹2.76 Cr | ₹4.28 Cr | ₹5.45 Cr |
| Net Profit | ₹0.22 Cr | ₹0.62 Cr | ₹0.72 Cr |
| OPM | 43.4% | 36.7% | 28.8% |
| ROE | 0.4% | 1.6% | 4.0% |
| EPS | ₹0.04 | ₹0.10 | ₹0.12 |
🧠 Interpretation:
- Growth? Yes.
- Profitability? Barely.
- Margins? Decent for scale, but scale itself is missing.
4. 🔥 Valuation – Cheap, Meh, or Crack?
| Metric | Value |
|---|---|
| CMP | ₹19.4 |
| P/E | 40.7x |
| Book Value | ₹3.97 |
| P/B | 4.90x |
| Market Cap | ₹29.3 Cr |
🧮 Fair Value Range Estimate (based on EPS growth x 25–30 P/E)
If FY26 EPS reaches ₹0.30 (bullish),
FV = ₹7.5 to ₹9 (Max 10–12 if we stretch dreams).
🚨 At CMP ₹19.4 – it’s priced as if it’s already Infosys… after amnesia.
5. 🍿 What’s Cooking – News, Triggers, Drama
- 📈 Rights Issue: ₹46 Cr raised to fund growth, expand biz. Let’s hope they don’t buy bean bags.
- 📢 Promoter Buy-In: Jumped to 62.26% — might be serious, or just an “optical” turnaround.
- 💻 Tech Buzzwords: Company is leaning heavily on cloud/digital/AI jargon to look cool.
- 🧻 Low Float, Penny Base: High risk of operator action. Illiquid + retail pump = 🚀 or 💥
6. 💸 Balance Sheet – How Much Debt, How Many Dreams?
| Metric | FY25 |
|---|---|
| Total Equity | ₹24.53 Cr |
| Debt | ₹0.80 Cr |
| Reserves | -₹2.52 Cr |
| Assets | ₹27.39 Cr |
| Fixed Assets | ₹2.25 Cr |
📉 Negative reserves for 10+ years. They’re trying to fix the balance sheet, but this is still a work-in-progress startup pretending to be a turnaround play.
7. 💵 Cash Flow – Sab Number Game Hai
| Year | CFO | CFI | CFF | Net Flow |
|---|---|---|---|---|
| FY25 | -₹2.08 Cr | ₹0 | ₹4.09 Cr | ₹2.01 Cr |
| FY24 | -₹1.96 Cr | ₹0 | ₹1.95 Cr | -₹0.01 Cr |
📉 Operations are burning cash every year.
🆘 Survival = external funds (rights issue, equity dilution).
8. 📏 Ratios – Sexy or Stressy?
| Ratio | Value |
|---|---|
| ROE | 4% |
| ROCE | 4.36% |
| Debtor Days | 1,232 (!!) |
| P/E | 40.7x |
| P/B | 4.9x |
🧾 Red Flags:
- 🔁 Debtors > 3 years? Either it’s fake billing, or customers have ghosted them.
- 📈 High P/E, low growth – classic overvaluation.
9. 💥 P&L Breakdown – Show Me the Money
| Year | Sales | OPM | PAT | EPS |
|---|---|---|---|---|
| FY23 | ₹2.76 Cr | 43% | ₹0.22 Cr | ₹0.04 |
| FY24 | ₹4.28 Cr | 36.7% | ₹0.62 Cr | ₹0.10 |
| FY25 | ₹5.45 Cr | 28.8% | ₹0.72 Cr | ₹0.12 |
⏳ Slow recovery, low scale, high promises. The cost base is fixed, so any revenue growth helps. But what if that revenue plateaus?
10. 🧠 Peer Comparison – Who Else in the Game?
| Company | Sales (TTM) | PAT | ROE | CMP | P/E |
|---|---|---|---|---|---|
| Calsoft | ₹5.45 Cr | ₹0.72 Cr | 4% | ₹19.4 | 40.7x |
| TCS | ₹2.5 L Cr | ₹48.5k Cr | 52.4% | ₹3,419 | 25.5x |
| Wipro | ₹89k Cr | ₹13k Cr | 16.6% | ₹270 | 21.6x |
| Persistent | ₹11.9k Cr | ₹1.3k Cr | 24% | ₹5,896 | 68.1x |
🧨 Valuation-wise, Calsoft thinks it’s a unicorn. But it’s not even an ant with a laptop.
11. 📊 Misc – Shareholding, Promoters, Rights Issue
- 👨👩👧 Promoter Stake:
- Mar 2024: 35.73%
- Mar 2025: 62.26% 🚨
- 🧻 Retail Holding: Down from 64.2% → 37.7%
- 💸 Rights Issue (Jan 2025): ₹46.3 Cr partly paid shares.
- 🏃 Shareholders: Now 15,907 – retail frenzy alert.
- 📢 No dividends. No buybacks. Only hope.
12. 🧑⚖️ EduInvesting Verdict™
🧾 Summary Verdict:
- Is it turning around? — Possibly.
- Is it investible at this valuation? — LOL no.
- Is promoter buying real skin or just dressing? — Time will tell, but they seem serious for now.
🎯 Fair Value Range: ₹7–₹9 (bull case ₹10–₹12)
🤯 CMP of ₹19.4 = ✨premium pricing for a company with 1990s codebase and 2025 dilution plans.
🛑 This is not a tech company. It’s a tech concept with stock market aspirations.
🚨 Watchlist Only. If it executes, great. If not — you just bought nostalgia at P/E 40.
✍️ Written by Prashant | 📅 July 5, 2025
Tags: Calsoft, California Software, rights issue, turnaround stock, penny stock rally, IT stock analysis, EduInvesting
