🟢 At a glance:
Megasoft Ltd’s share price is up 100%+ from its 52-week low, but revenues are literally zero now. Yes, ZERO. Meanwhile, the company is trying to pivot into defence and pharma, even as its financials scream “resuscitate me”. Is this a turnaround story or just another pump before dump?
🧬 About the Company
- Founded: 1999
- Original Focus: Telecom services
- Current Pitch Deck: Pharma, Aerospace, and Defence electronics (yes, all at once!)
- Subsidiary Strategy: Plans to acquire and support multiple businesses via centralized management. Basically, become the Berkshire Hathaway of… loss-making subsidiaries?
🧑💼 Key Managerial Personnel (KMP)
| Name | Designation |
|---|---|
| G.V. Kumar | Managing Director & CEO |
| R. Venkatesh | CFO |
| Board reshuffle & corporate restructuring has been ongoing with M&A ambitions driving the agenda. |
📊 Financials (FY21–FY25)
| ₹ in Crores | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Revenue | 59 | 52 | 2 | 0 | 0 |
| EBITDA | 4 | -18 | -18 | -9 | -10 |
| Net Profit | 2 | 5 | 9 | -13 | -30 |
| Other Income | 7 | 30 | 43 | 37 | 42 |
| EPS (₹) | 0.25 | 0.63 | 1.20 | -1.73 | -4.06 |
| ROE (%) | 2% | 5% | 8% | -15% | -18% |
| Cash Flow from Ops | 20 | 16 | 15 | 42 | 37 |
📉 Revenue vanished. Profit vanished. Only “Other Income” holding things up like scaffolding on a collapsed building.
🧮 Forward-Looking Fair Value (FV) Estimate
⚠️ This is tricky because core operations are non-existent. But let’s assume:
- The company successfully pivots into defence-tech and revives ₹50 Cr annual revenue by FY27.
- EBITDA margins improve to 10% with PAT margin of 5%.
- Assign a modest P/E of 15x on ₹2.5 Cr profit.
➤ Estimated FV Range (2027): ₹45–₹60
(CMP: ₹103 — already priced beyond fundamentals, unless a miracle acquisition lands.)
📈 Stock Performance
| Period | Stock Price CAGR |
|---|---|
| 10 Years | 38% |
| 5 Years | 82% |
| 3 Years | 33% |
| 1 Year | 55% |
🤔 Impressive returns for a business with zero revenue. The power of narratives, folks!
🔍 Why It Stands Out
- Narrative Shift: From legacy telecom to defence-tech + pharma.
- Speculation-Driven Rally: Retail + operator interest seen.
- No Core Revenue: Entirely dependent on other income, not business ops.
- Massive Net Loss in FY25: ₹30 Cr loss on ₹0 sales.
🏗️ Business Strategy (Or The Lack Of It?)
- ❌ No operating revenue in FY24 or FY25.
- ✅ Heavy reliance on Other Income — ₹42 Cr in FY25, nearly equal to its market cap movement driver.
- ✅ Company exploring acquisitions in pharma and aerospace but hasn’t finalized anything.
- ❌ Promoter holding down from 43.77% → 35.07% over two years.
💥 EduInvesting Take
Let’s be honest:
- If you removed the “Other Income” column, this company would be an obituary in the SME cemetery.
- But here we are — 100%+ from 52W low, trending on operator circles, and dreaming of a defence pivot.
- This is not a value stock. This is a startup in disguise, funded by “interest income” and investor optimism.
🚨 Red Flag Bingo Card:
- No core revenue ✅
- Promoter stake falling ✅
- High “Other Income” ✅
- Loss-making subsidiaries ✅
- Story shift into buzzwords (Defence, Pharma, Aerospace) ✅
So… if Megasoft actually pulls off the pivot, it could go “from joke to juggernaut.” But right now? It’s “soft” on the mega, heavy on the hope.
🚩 Risks & Red Flags
- ❌ Revenue = ₹0 for two years.
- ❌ FY25 net loss = ₹30 Cr.
- ❌ Earnings fully propped up by non-operating income.
- ❌ No visibility on acquisition outcomes.
- ❌ Promoter holding decline is suspicious.
- ❌ Stock trades at 5.3x book value with ROE of -18%.
🏷️ Tags:
Megasoft Ltd, Megasoft share price analysis, telecom stocks India, defence tech pivot, zero revenue company, speculative stock, operator stock analysis, FY25 results Megasoft, EduInvesting review
Author: Prashant Marathe
Date: 12 June 2025
