Megasoft Ltd Q2FY26 – From Telecom Dinosaur to Pharma-Defence Phoenix: ₹400 Cr Land Sale, UK Aerospace Buy, and a 414% Profit Resurrection
1. At a Glance
Megasoft Ltd (BSE: 532408, NSE: MEGASOFT) — once known for dull telecom services — has suddenly become the Bollywood remake of a corporate thriller: old plot, new characters, and dramatic twists. Market cap stands at ₹1,550 crore, and the stock, priced around ₹210 as of November 7, 2025, has rocketed 77.9% in 3 months and 169% in a year. The company’s Return on Capital Employed (ROCE) of 8.74% looks modest, but the Profit After Tax (PAT) of ₹138 crore in FY25 makes one raise an eyebrow — especially when last year’s sales were ₹0 crore.
How did a telecom relic with zero operating income turn into a profit machine? The answer lies buried in its “other income” – a mysterious ₹216 crore that outshines its rent receipts and property sales. Its P/E of 11.2 looks sane until you realize the E in that equation is from land deals, not software.
With no debt (₹3.89 crore only) and a comically high current ratio of 8.39, Megasoft is the corporate version of a guy who sold his ancestral land, bought a drone startup in the UK, and now calls himself an aerospace entrepreneur.
So buckle up, because this quarter, Megasoft didn’t just make profits — it made headlines.
2. Introduction
Once upon a time, Megasoft was your run-of-the-mill IT and telecom player. Then came the existential crisis. Around 2022, the management decided: “Why code when we can conquer Pharma and Defence?” And thus began a bizarre yet fascinating pivot.
The company divested its software division for a grand ₹1 crore — barely enough for a mid-size Bengaluru flat — and invested over ₹1,353 million in Extrovis AG, a Swiss pharma firm dabbling in chemical R&D. In 2025, it sold 36.52% of Extrovis for $15 million (approx ₹125 crore) — because why not? That’s almost 12,000% profit on paper for a company that used to chase telecom clients.
Meanwhile, it’s been busy turning into an arms dealer of sorts. Through its subsidiary Sigma Advanced Systems, Megasoft now has ambitions in defence electronics. As of October 31, 2025, Sigma acquired the entire Nasmyth Group (UK) for GBP 17.8 million (~₹213 crore) — giving it direct access to aerospace manufacturing.
The cherry on top? It sold property worth ₹400.39 crore in April 2025, booked a profit of ₹184.6 crore, and reported a half-year PBT of ₹168.2 crore.
So yes, it’s technically a “telecom” company — just one that now sells land, rents properties, and buys British defence firms. Somewhere between those activities, it also fought the GST department, which slapped a ₹28 crore demand (under protest, ₹5 crore already paid).
From a fallen IT phoenix to a cash-rich asset flipper, Megasoft is now scripting its second act — a pharma-defence crossover that even Netflix might struggle to believe.
3. Business Model – WTF Do They Even Do?
Megasoft’s business model today can be described as “corporate buffet”: a little real estate, a bit of pharma, some aerospace, and a sprinkle of litigation.
Here’s the lineup:
Telecom Legacy – Dead, gone, buried.
Pharma Ambitions – Invested in Extrovis AG (Swiss-based R&D company) and intends to acquire drug formulation firms or distressed pharma assets.
Defence and Aerospace – Through its subsidiary Sigma Advanced Systems, it provides solutions to PSUs, armed forces, and paramilitary services. Post its Nasmyth Group UK acquisition, it’s now into aerospace component manufacturing.
Renting Real Estate – The actual revenue backbone, contributing 83% of FY23 revenue, with rental and interest income making up 93%.
Corporate Incubator Role – Management claims it will offer central technology, leadership, and finance support to subsidiaries. Think of it as a wannabe Tata Sons — if Tata Sons had just one building and a GST case.
In essence, Megasoft has become a holding company in disguise. It’s leasing out old telecom properties, redeploying that cash into foreign acquisitions, and calling it “diversification.”
Does it sound chaotic? Of course. But in a world where startups call layoffs “right-sizing,” this might just work.
4. Financials Overview
Metric (₹ Cr)
Latest Qtr (Sep 2025)
YoY Qtr (Sep 2024)
Prev Qtr (Jun 2025)
YoY %
QoQ %
Revenue
0.00
0.00
0.00
—
—
EBITDA
-1.99
-2.12
-15.96
-6.1%
87.5% improvement
PAT
0.56
-14.26
136.23
NA
-99.6%
EPS (₹)
0.08
-1.93
18.47
—
-99.6%
Commentary: Revenue? Still zero. PAT? Rollercoaster. After a blockbuster Q1FY26 (₹136 Cr profit from property sale), Q2FY26 cooled to ₹0.56 Cr. Annualizing the latest EPS (₹0.08 x 4 = ₹0.32), the “normalized” P/E shoots into irrelevance — P/E not meaningful.
Basically, it’s not an income statement — it’s a property sale disguised as one.
5. Valuation Discussion – Fair Value Range
Let’s play along and value this shape-shifting company anyway.
(a) P/E Method: EPS (TTM): ₹18.7 Industry P/E: 15 → Fair value range: ₹187 – ₹280
(b) EV/EBITDA Method: EV: ₹1,530 Cr EBITDA (TTM): ₹192 Cr (implied from EV/EBITDA 7.97) Assume fair EV/EBITDA multiple range of 6–9 (industry range). → Fair value range: ₹190 – ₹285
(c) DCF Method (Simplified): If annual cash flow (post other income normalization) = ₹40 Cr, growth 5%, discount 12%, terminal multiple 8x → → Fair value ≈ ₹160 – ₹200 per share
✅ Fair Value Range (Educational Only): ₹160 – ₹280 per share
Disclaimer: This fair value range is for educational purposes only and is not investment advice.
6. What’s Cooking – News, Triggers, Drama
Oh, plenty of masala here:
Property Bonanza (Apr 2025): Sold a Hyderabad property for ₹400.39 crore, booking ₹184.6 crore profit. If real estate flipping were an Olympic sport, Megasoft just won gold.
Extrovis Exit (Jul 2025): Sold 36.52% of Swiss subsidiary Extrovis AG for $15 million (~₹125
