1. At a Glance
Cigniti is a software testing firm that’s testing the limits of both automation and expectations. With a juicy ROCE of 34%, soaring profit growth, and a P/E that still feels like a discount bin, this Hyderabad-based ninja is doing quality assurance while quietly assuring quality profits.
2. Introduction with Hook
Imagine an IT company that doesn’t promise to build the next metaverse — it just makes sure the app doesn’t crash when you swipe right.
That’s Cigniti — the ‘editor-in-chief’ of the software world.
- FY25 PAT: ₹200 Cr
- ROE: 26%
- EPS (TTM): ₹93.45
No flashy ad campaigns. Just earnings that slap harder than a compiler error on a Friday night.
3. Business Model (WTF Do They Even Do?)
Cigniti is in the “let’s break it before the customer does” business.
Their services:
- Software Testing (automated/manual, regression to security)
- QA Transformation
- Digital Assurance (they test your AI before your AI breaks your product)
- IP tools & AI-based prediction for test coverage
Basically, they get paid to make sure your app doesn’t crash mid-Zomato order.
4. Financials Overview
| Metric | FY25 |
|---|---|
| Revenue | ₹2,014 Cr |
| EBITDA | ₹289 Cr |
| Net Profit | ₹200 Cr |
| OPM | 14.4% |
| ROCE | 34.2% |
| ROE | 26.0% |
| EPS | ₹73.07 |
Commentary:
They went from ₹26 Cr profit in FY14 to ₹200 Cr now — that’s more glow-up than a Netflix makeover show.
5. Valuation
CMP: ₹1,742 | EPS: ₹93.45 → P/E: 18.6x
Book Value: ₹352 → P/B: 4.96x
Method 1: P/E Peer Multiple (avg ~30x for IT)
FV = ₹93.45 x 30 = ₹2,800
Method 2: EV/EBITDA (~10x reasonable for high ROCE)
EBITDA = ₹289 Cr
EV = 10 x 289 = ₹2,890 Cr
Assume zero net debt → Market Cap = ₹2,890 Cr → Per share FV = ~₹1,050
Fair Value Range: ₹1,050 – ₹2,800
You decide: undervalued ninja or fairly-priced test proctor?
6. What’s Cooking – News, Triggers, Drama
- Q1 FY26: ₹534 Cr rev | ₹66 Cr PAT → 160% YoY profit growth.
- Merger: Coforge-Cigniti merger scheme gets nod. Two testing titans walk into a room…
- RTA Changed, Company Secretary quit, ESOPs granted — corporate HR carousel in motion.
Plot twists galore. Stay tuned for “Merger Wars: Regression Testing Edition.”
7. Balance Sheet
| Metric | FY25 |
|---|---|
| Equity | ₹27 Cr |
| Reserves | ₹936 Cr |
| Borrowings | ₹28 Cr (almost nil!) |
| Fixed Assets | ₹121 Cr |
| Investments | ₹146 Cr |
| Total Assets | ₹1,239 Cr |
Cash-rich. Debt-light. More efficient than your friend’s iPhone battery at 5%.
8. Cash Flow – Sab Number Game Hai
| Year | CFO | CFI | CFF | Net Flow |
|---|---|---|---|---|
| FY23 | ₹157 Cr | ₹-53 Cr | ₹-69 Cr | ₹35 Cr |
| FY24 | ₹129 Cr | ₹-34 Cr | ₹-40 Cr | ₹56 Cr |
| FY25 | ₹160 Cr | ₹-18 Cr | ₹-18 Cr | ₹125 Cr |
Strong operating cash flow. No toxic financing. This is textbook CFO behaviour — if the textbook was titled “How to Not Screw Up.”
9. Ratios – Sexy or Stressy?
| Ratio | FY25 |
|---|---|
| ROE | 26.0% |
| ROCE | 34.2% |
| P/E | 18.6x |
| PAT Margin | ~9.9% |
| D/E | 0.03x |
These ratios are like the IT guy who shows up early, fixes everything, and quietly leaves. Unproblematic and overperforming.
10. P&L Breakdown – Show Me the Money
| Year | Revenue | EBITDA | PAT |
|---|---|---|---|
| FY23 | ₹1,648 Cr | ₹238 Cr | ₹168 Cr |
| FY24 | ₹1,815 Cr | ₹222 Cr | ₹166 Cr |
| FY25 | ₹2,014 Cr | ₹289 Cr | ₹200 Cr |
Analysis:
Consistent growth. Profits climbing like your daily screen time. Operating margins up from 12% to 14.4%. If this was a cricketer, we’d call it Mr. Dependable.
11. Peer Comparison
| Company | Rev (Cr) | PAT (Cr) | P/E | ROE |
|---|---|---|---|---|
| LTTS | ₹11,074 | ₹1,265 | 36x | 22.1% |
| Tata Tech | ₹5,143 | ₹685 | 42x | 19.9% |
| Cyient | ₹7,360 | ₹612 | 23x | 12.8% |
| Netweb | ₹1,149 | ₹114 | 97x | 24.0% |
| Cigniti | ₹2,014 | ₹200 | 18.6x | 26.0% |
Cigniti looks like the student who scores 90% without ever raising their hand. Underrated, overdelivering.
12. Miscellaneous – Shareholding, Promoters
| Category | Jun 2025 |
|---|---|
| Promoters | 55.16% |
| FIIs | 11.33% |
| DIIs | 8.23% |
| Public | 25.29% |
| Shareholders | 28,563 |
Promoter holding jumped from 22% to 55% in a year — clearly, even insiders were like “Wait, this thing is GOOD?” FIIs and DIIs joined the party too.
13. EduInvesting Verdict™
Cigniti doesn’t scream, doesn’t dance, doesn’t overpromise. It just logs in, runs your tests, and collects its ₹200 Cr profit.
For a boring testing company, it sure passes every investor’s test.
Quietly compounding. No drama. Just daal-chawal with a Michelin star.
Metadata:
Written by EduInvesting Team | 23 July 2025
Tags: Cigniti Technologies, Software Testing, Analysis, EduInvesting Premium
