At a Glance
VGIL is a core banking + e-gov + ERP SaaS firm based in Nagpur, growing at 79% profit CAGR, reporting 46% OPM, and 47.7% ROE — but promoter holding just fell by 23.2% in one quarter. On paper, it’s the Tanla of Tier-2 India. But is it built on solid code or cosmic dust?
1. 🎬 Intro: Profits Rocketing, Promoters Ejecting
- CMP: ₹166
- Market Cap: ₹414 Cr
- TTM Sales: ₹120 Cr
- TTM Net Profit: ₹32 Cr
- P/E: 12.9x
- ROE: 47.7%
- Promoter Holding: 64.7%, down from 87.9% not long ago 😬
Fundamentals say “undervalued.” But shareholding says, “take profits and run.”
2. 💻 WTF Do They Even Do?
Virtual Galaxy Infotech Ltd (VGIL) is:
- 🏦 A SaaS-based Core Banking platform provider
- 🏛️ An e-Governance tech enabler
- 🏢 An ERP and custom IT solutions vendor
- 🧠 Serving BFSI clients, government agencies, and industrial players
They recently renewed a ₹19.78 Cr, 7-year core banking contract — that’s sticky, high-margin revenue.
So yes, real business, real clients… just needs a little less secrecy and a little more storytelling.
3. 💰 Financials – Boringly Beautiful
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue (₹ Cr) | 58 | 61 | 120 |
| Net Profit (₹ Cr) | 2 | 16 | 32 |
| EBITDA Margin | 22% | 50% | 46% |
| EPS | ₹1.64 | ₹14.8 | ₹17.6 |
| ROE | 1.6% | 48% | 47.7% |
That’s 2x sales and 2x profit in a year. And margins that even Apple would envy.
4. 📊 Valuation – Is This Still Cheap?
| Metric | Value |
|---|---|
| CMP | ₹166 |
| EPS | ₹17.55 |
| P/E | 12.9x |
| Book Value | ~₹35 (implied from P/B 4.7x) |
| P/B | ~4.7x |
| EV/Sales | ~3.3x |
🧮 Fair Value Range = ₹180 – ₹240
(Assuming 18–20x sustainable EPS + margin expansion)
At CMP ₹166, it’s still undervalued if FY25 repeatable.
5. 🍲 What’s Cooking?
- 🚀 FY25 PAT up 2x YoY
- 💼 Renewed multi-crore banking contract with Osmanabad District Bank
- 📉 Promoter Holding down 23% in one quarter
- 🎙️ Analyst Call held (June 2025) — transparency ✅
- 🧾 Screener flag: May be capitalizing interest 👀
- 📉 Public holding rose to 21.5%, DIIs + FIIs at 13.7%
This is one of the rare SME IT firms with real software, real clients, and now — real investor attention.
6. 💼 Balance Sheet – Scaling Nicely
| Metric | FY25 |
|---|---|
| Equity | ₹18 Cr |
| Reserves | ₹75 Cr |
| Borrowings | ₹40 Cr |
| Fixed Assets | ₹76 Cr |
| CWIP | ₹41 Cr |
| Total Assets | ₹158 Cr |
CWIP of ₹41 Cr suggests they’re building new platforms or tech infra. We love capex in tech — as long as it’s not vanity.
7. 💸 Cash Flow – Numbers That Make Sense
| FY | CFO | CFI | CFF |
|---|---|---|---|
| FY25 | ₹43 Cr | ₹-51 Cr | ₹8 Cr |
- Operating cash > Net Profit = sane business
- Investing cash negative = ongoing platform dev
- Raised ₹8 Cr to bridge capex gap — fair play
8. 📉 Ratios – Sexy Without the Scam
| Ratio | FY25 |
|---|---|
| ROCE | 45.0% |
| ROE | 47.7% |
| OPM | 46% |
| Interest Coverage | >10x |
| Debtor Days | 68 (down from 149 in FY24!) |
| CCC | 68 days → healthy |
Basically, this is a rare SME where the accounting ratios don’t scream run.
9. 💵 P&L Breakdown – The Good Kind of Saas
| Metric | FY25 |
|---|---|
| Revenue | ₹120 Cr |
| Operating Profit | ₹55 Cr |
| Depreciation | ₹8 Cr |
| Interest | ₹3 Cr |
| Net Profit | ₹32 Cr |
Net margin = 26%, EBITDA margin = 46%
SaaS + BFSI clients + sticky contracts = juicy model.
10. 🧠 Peer Comparison – SME Among Giants
| Company | P/E | ROE | Sales (₹ Cr) | Mcap (₹ Cr) |
|---|---|---|---|---|
| Virtual Galaxy | 12.9 | 47.7% | 120 | ₹414 |
| Tanla | 16.9 | 24.1% | 4,027 | ₹8,565 |
| Nucleus Soft. | 23.2 | 16.8% | 832 | ₹3,105 |
| CE Info (MapMyIndia) | 76 | 17.6% | 463 | ₹9,722 |
So yeah… Virtual Galaxy is trading cheaper than everyone, with better margins than most.
11. 👨👩👦 Shareholding – 🚨 But Why the Exit?
| Entity | % |
|---|---|
| Promoters | 64.7% (down from ~88%) |
| FIIs | 5.04% |
| DIIs | 8.71% |
| Public | 21.53% |
🔥 Promoter exited 23.2% in Q1FY26 — yet no bonus, no buyback, no announcement on it.
That’s the only red flag in an otherwise glowing deck.
12. 📎 Miscellaneous Masala
- NSE SME-listed — so don’t expect heavy liquidity
- Yet to pay any dividends
- Analyst calls are happening — rare for SME
- Core business has zero exports — all domestic SaaS
- Plans to expand into Tier 2 & 3 banking tech
13. 🧑⚖️ EduInvesting Verdict™
This isn’t your average SME IT scam.
✔️ Real revenue
✔️ 2x YoY PAT
✔️ High ROE, improving cash flow
✔️ 7-year BFSI contract locked in
But…
❗ Promoter selling 23% in one go
❗ Still no clarity on why
❗ No dividend, no buyback — yet high free cash flow
📉 If the promoter dumping is clarified, this could re-rate FAST.
Fair Value Range = ₹180 – ₹240
But wait for narrative clean-up. Till then, it’s in “watch like a hawk” zone.
✍️ Written by Prashant | 📅 08 July 2025
Tags: Virtual Galaxy Infotech, SME IT stocks, SaaS India, core banking software, ERP, BFSI tech, SME growth stock, EduInvesting, high ROE stocks India, promoter selling red flags
Promoter reduction is 23 % is just based on fresh issue of shares in the new IPO.