1. At a Glance
Magellanic Cloud Ltd, a smallcap IT and HR services firm with global dreams, is now also riding the drone-tech and AI-based surveillance wave. ROE is sweet, OPM is solid, but the balance sheet is holding more pledges than an engineering college.
2. Introduction with Hook
Imagine an IT company that does everything—staffing, DevOps, drone surveillance, and consulting—all under one roof. Now throw in 170 days of receivables and a promoter pledge just announced. Voilà, Magellanic Cloud Ltd.
- 5Y profit CAGR: 77%
- Stock Price 3Y CAGR: 68%
The question is: is the growth real, or just well-coded?
3. Business Model (WTF Do They Even Do?)
Magellanic operates across three key verticals:
- Human Capital – Basically staffing and recruitment
- IT Consulting & DevOps – “Digital transformation” and buzzword salad
- Drone + AI Surveillance – Their recent Rs 75 Cr NHAI order speaks volumes
They also offer QA, VMS (Video Management Systems), and are now venturing into AI/ML-based solutions. Think of them as a jack-of-all-startups.
4. Financials Overview
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | ₹427 Cr | ₹560 Cr | ₹597 Cr |
| Net Profit | ₹74 Cr | ₹103 Cr | ₹103 Cr |
| OPM (%) | 25% | 33% | 34% |
| EPS (₹) | 1.26 | 1.76 | 1.76 |
| ROCE (%) | 31% | 27% | 23% |
| ROE (%) | 28% | 28% | 22% |
Margins are amazing—until you read the fine print on receivables and debt.
5. Valuation
- P/E: 47.8 (no typo)
- Price/Book: 9.45
- PEG Ratio: LOL, let’s not go there
Fair Value Range Estimate: ₹48–₹65
Anything beyond that? Hope you’re flying a drone over the financials too.
6. What’s Cooking – News, Triggers, Drama
- NHAI Drone Order (Rs 32 Cr): Major validation for drone segment
- AI-VMS Order (Rs 45 Lakh): Smaller but adds credibility
- Board Meeting (July 21): Q1 results coming
- Promoter Pledge (1.923% on June 30): Yikes!
Triggers are strong, but so is the smell of overextension.
7. Balance Sheet
| Item | FY23 | FY24 | FY25 |
|---|---|---|---|
| Equity Capital | ₹117 Cr | ₹117 Cr | ₹117 Cr |
| Reserves | ₹180 Cr | ₹290 Cr | ₹401 Cr |
| Borrowings | ₹216 Cr | ₹279 Cr | ₹257 Cr |
| Total Assets | ₹720 Cr | ₹799 Cr | ₹889 Cr |
Key Take: Equity flat, reserves up, borrowings high. Classic “we’re growing” structure—just not the cleanest.
8. Cash Flow – Sab Number Game Hai
| Year | CFO (₹ Cr) | CFI (₹ Cr) | CFF (₹ Cr) | Net Cash |
|---|---|---|---|---|
| FY23 | ₹160 Cr | -₹367 Cr | ₹203 Cr | -₹5 Cr |
| FY24 | ₹32 Cr | -₹76 Cr | ₹6 Cr | -₹37 Cr |
| FY25 | ₹143 Cr | -₹64 Cr | -₹48 Cr | ₹31 Cr |
Heavy investing → higher borrowings → rollercoaster net cash. Not for the faint of heart.
9. Ratios – Sexy or Stressy?
| Ratio | FY23 | FY24 | FY25 |
|---|---|---|---|
| Debtor Days | 58 | 153 | 170 |
| ROCE (%) | 31% | 27% | 23% |
| ROE (%) | 28% | 28% | 22% |
| CCC (Days) | 58 | 153 | 170 |
High ROE but spiraling debtor days? That’s like getting a Ferrari on EMIs and not getting paid by clients.
10. P&L Breakdown – Show Me the Money
| FY | Revenue (₹ Cr) | OPM (%) | PAT (₹ Cr) | EPS (₹) |
|---|---|---|---|---|
| FY23 | ₹427 | 25% | ₹74 | 1.26 |
| FY24 | ₹560 | 33% | ₹103 | 1.76 |
| FY25 | ₹597 | 34% | ₹103 | 1.76 |
Stagnant profit in FY25 despite revenue growth = margin pressure incoming?
11. Peer Comparison
| Company | CMP (₹) | P/E | OPM % | ROE % | Mcap (Cr) |
|---|---|---|---|---|---|
| TCS | 3201 | 23 | 26% | 52% | ₹11.5L Cr |
| LTIMindtree | 5107 | 32 | 16.9% | 21.5% | ₹1.5L Cr |
| Persistent Sys | 5447 | 62 | 17.2% | 24.1% | ₹85K Cr |
| Magellanic | 83.9 | 47.8 | 34% | 22.2% | ₹4,900 Cr |
Margins are elite, valuation is spicy, scale—not quite there yet.
12. Miscellaneous – Shareholding, Promoters
| Category | Mar 23 | Mar 24 | Jun 25 |
|---|---|---|---|
| Promoter | 58.65% | 58.30% | 58.30% (with pledge) |
| FIIs | 0.00% | 0.28% | 0.44% |
| DIIs | 0.00% | 0.00% | 0.00% |
| Public | 41.35% | 41.42% | 41.26% |
| No. of SHs | 9.8K | 15.2K | 38.6K |
FIIs testing the waters. Promoter pledge raised some brows.
13. EduInvesting Verdict™
Magellanic Cloud is what happens when a B2B IT firm swipes right on all trending technologies—DevOps, drones, AI, VMS. The growth story is compelling. The numbers are juicy. But the balance sheet? The receivables? The pledges? That’s where the plot twists harder than a Christopher Nolan film.
If you’re entering at this valuation, better know how to fly that drone yourself—because landing might not be smooth.
Metadata
– Written by EduInvesting Analyst Desk | 18 July 2025
– Tags: Magellanic Cloud, Drone Tech, IT Services, Smallcap, Receivables Risk, Promoter Pledge, AI Surveillance
