1. At a Glance
IRIS Business Services Ltd is India’s OG RegTech wizard, working with regulators, stock exchanges, and central banks using XBRL, SDMX, and AI. With a recent ₹151 Cr divestment, 30% ROCE, and 94% 5-year profit CAGR, the quiet nerd of compliance may finally be turning into a SaaS superstar.
2. Introduction with Hook
What if your accountant moonlighted as a coder? And then became friends with RBI, SEBI, and the Qatar Central Bank? That’s IRIS for you—a once-small RegTech startup now riding the wave of compliance-as-a-service.
- FY25 Profit: ₹13 Cr (up 50%)
- 5Y Profit CAGR: 94%
- Recent Sale to Sovos: ₹151 Cr cash bonanza
IRIS just dumped its TaxTech baggage and is now a pure-play RegTech bet. But is it ready to scale like a SaaS unicorn—or will it remain niche and nerdy?
3. Business Model (WTF Do They Even Do?)
IRIS is a RegTech SaaS play with deep specializations in:
- XBRL reporting solutions (used by regulators globally)
- SupTech platforms for RBI, Qatar CB, and more
- Compliance & data analytics for enterprises and banks
- AI/ML/RPA-powered tools for regulatory submissions
Think of it as Tally + Tableau + SEBI handbook, all mashed into one clean API stack.
4. Financials Overview
| Particulars | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue (₹ Cr) | 74 | 102 | 126 |
| EBITDA (₹ Cr) | 10 | 15 | 19 |
| EBITDA Margin (%) | 13% | 15% | 15% |
| Net Profit (₹ Cr) | 4 | 9 | 13 |
| EPS (₹) | 2.21 | 4.49 | 6.34 |
| ROCE (%) | 17% | 27% | 30% |
- Clean 3-year run of topline + bottomline compounding
- EBITDA margins aren’t sexy yet, but rising steadily
5. Valuation
We cooked up a few models in the regulatory kitchen:
- PE-based (40x – 50x on FY25 EPS ₹6.34)
FV Range = ₹254 – ₹317 - EV/EBITDA (20x on ₹19 Cr)
EV = ₹380 Cr → Per Share = ₹190–210 - Post-Sovos deal (₹151 Cr cash infusion)
Intrinsic value jumps by ~₹75–80/share if reinvested well
Current Price: ₹413
Verdict: Overvalued in the short-term, unless management deploys Sovos money like Buffett with a jetpack.
6. What’s Cooking – News, Triggers, Drama
- Sovos Deal:
IRIS sold its TaxTech and GST ASP business for ₹151 Cr to Sovos. Focus now 100% on RegTech. - Leadership Update:
Sudden demise of visionary CEO S. Swaminathan in March 2025. Balachandran Krishnan is interim CEO + CFO. - Qatar Win:
Selected by Qatar Central Bank via Accenture. A big vote of trust. - MSME Support MoUs with Goa, Karnataka, Telangana.
This is no longer just a microcap geek—it’s now a SaaS diplomat.
7. Balance Sheet
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Equity Capital | 19 | 19 | 21 |
| Reserves | 12 | 22 | 55 |
| Borrowings | 6 | 6 | 4 |
| Total Liabilities | 70 | 77 | 125 |
| Fixed Assets | 14 | 13 | 21 |
| Investments | 0 | 0 | 21 |
| Other Assets | 55 | 61 | 83 |
- Debt nearly eliminated
- Cash reserves to rise sharply after Sovos cash hits
- Asset-light SaaS DNA is intact
8. Cash Flow – Sab Number Game Hai
| Year | CFO (₹ Cr) | CFI (₹ Cr) | CFF (₹ Cr) | Net CF |
|---|---|---|---|---|
| FY23 | 6 | -2 | -2 | 2 |
| FY24 | 12 | -3 | -1 | 7 |
| FY25 | 28 | -27 | 17 | 18 |
- Operating cash flow jumped 2.3x YoY
- FY25 capex is for product expansion + regulatory tools
- Net CF will explode further post-October when Sovos money lands
9. Ratios – Sexy or Stressy?
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROCE (%) | 17 | 27 | 30.2 |
| ROE (%) | 18 | 22 | 22.3 |
| OPM (%) | 13.5 | 15.1 | 15.0 |
| PE Ratio | — | — | 65.1 |
| PB Ratio | — | — | 11.2 |
| Debtor Days | 123 | 80 | 86 |
| Cash Conv. Cycle | 123 | 80 | 86 |
- Still struggling with debtor collection, but improving
- ROE of 22% = not bad for a niche software player
- Valuation? Definitely hot sauce levels
10. P&L Breakdown – Show Me the Money
| Year | Revenue (₹ Cr) | EBITDA (₹ Cr) | PAT (₹ Cr) | EPS (₹) |
|---|---|---|---|---|
| FY23 | 74 | 10 | 4 | 2.21 |
| FY24 | 102 | 15 | 9 | 4.49 |
| FY25 | 126 | 19 | 13 | 6.34 |
- Clear progression
- Clean profits, no accounting drama
- Bottomline scaling faster than topline (finally)
11. Peer Comparison
| Company | CMP (₹) | PE | ROCE (%) | Sales (Cr) | PAT (Cr) |
|---|---|---|---|---|---|
| IRIS Business | 413 | 65.1 | 30.2 | 126 | 13 |
| Nucleus Software | 1,159 | 23.2 | 22.6 | 228 | 65 |
| Tanla Platforms | 632 | 16.8 | 29.2 | 1,024 | 117 |
| CE Info Systems | 1,795 | 76.4 | 24.1 | 463 | 128 |
Takeaway:
IRIS is micro in size, but macro in ambition and margin trajectory.
It trades at premium valuations—deserved if it executes globally.
12. Miscellaneous – Shareholding, Promoters
| Category | Mar 2024 | Jun 2024 | Mar 2025 |
|---|---|---|---|
| Promoters | 37.10% | 35.63% | 34.68% |
| FIIs | 0.08% | 1.00% | 1.42% |
| DIIs | 0.00% | 2.72% | 11.08% |
| Public | 62.82% | 60.66% | 52.82% |
| Shareholders | 7,257 | 7,893 | 9,439 |
- Promoter holding slipping, but DIIs piling in
- 9,000+ retail investors—no longer a secret stock
- Post-Sovos cash + DII demand = re-rating in motion
13. EduInvesting Verdict™
IRIS Business was the quiet librarian of the RegTech space—until it found its mojo. With strong SaaS fundamentals, a ₹151 Cr divestment in the bank, and a global roster of regulators, IRIS is shaping up to be India’s own RegTech powerhouse.
But the stock’s valuation is already anticipating global domination. That’s a lot of pressure on a 100-cr-revenue company still rebuilding its leadership.
If the new management nails capital allocation and scales the SupTech products? This could be a multi-bagger.
If not? It’ll just remain a clever footnote in the history of Indian compliance tech.
Metadata
– Written by EduInvesting Team | July 13, 2025
– Tags: IRIS Business Services, RegTech, SupTech, Sovos Deal, SaaS India, AI Compliance, XBRL, Smallcap Tech
