1. At a Glance
Oracle Financial Services Software (OFSS) is the quiet overachiever at every tech reunion—churning 46% operating margins, throwing 3% dividend yields like Diwali sweets, and still being underwhelmingly cool. While your mutual fund manager stans TCS, this Oracle offspring is sitting pretty with a ₹76,000 Cr market cap and a 29% ROE. No flex, just FLEXCUBE.
2. Introduction with Hook
Imagine if Infosys and HDFC Bank had a secret fintech baby—and it grew up without the drama, minus the scandals, but all the cash. That’s OFSS.
- Q1 FY26 Revenue: ₹1,852 Cr (+6% YoY)
- Q1 FY26 PAT: ₹642 Cr (+4% YoY)
- OPM: A juicy 46% — tighter than your landlord’s security deposit policy
Now imagine they did all this while maintaining a 99% dividend payout. That’s not a company, that’s a passive income machine.
3. Business Model (WTF Do They Even Do?)
Let’s get this straight: They don’t make software for food delivery or dating. They make the hardcore, institutional, compliance-laced, banker-friendly enterprise tools.
Basically:
They build banking platforms that help your bank run its show—from onboarding to origination, to payments, to treasury.
Their claim to fame:
- Oracle FLEXCUBE: The banking system that’s everywhere but never in the news
- 1,800+ APIs – because bankers love acronyms more than chai
- 91% revenue from product licenses and related services
In short: They sell tech to banks that don’t want to code but still want to look “digital-first.”
4. Financials Overview
Let’s play “How Rich Are They?”:
| Metric | FY25 (TTM) | YoY Growth |
|---|---|---|
| Revenue | ₹6,958 Cr | +10.4% |
| EBITDA | ₹3,076 Cr | +10.5% |
| Net Profit | ₹2,405 Cr | +8.4% |
| EPS | ₹276.95 | Basically Netflix annual subscription |
| OPM | 44% | Not even joking |
| ROCE | 41% | Corporate CFOs envy this |
| ROE | 29% | That’s preppy IIT topper level performance |
Margins like these should come with a warning label. Probably: “Don’t compare to your own salary.”
5. Valuation
At ₹8,779/share, here’s the math no one does on Instagram:
- P/E: 31.7x
- Book Value: ₹963 → P/B: 9.12x (Expensive? Yes. Unjustified? Debatable.)
Fair Value RANGE Estimate:
- P/E Method (20–28x on FY26E EPS ₹290): ₹5,800 – ₹8,120
- EV/EBITDA Method (18–22x on FY26E EBITDA ₹3,250 Cr): ₹6,300 – ₹7,800
Verdict?
If you think paying 30x for a company that doesn’t grow sales above 7% is fine… you probably also buy popcorn at multiplexes.
6. What’s Cooking – News, Triggers, Drama
OFSS never gets into Bollywood drama. But here’s some boardroom seasoning:
- Q1 FY26 Result: Growth is slow-ish (Revenue +6%, PAT +4%) but stable
- New Client Deals: Not named (as always), but apparently multiple
- Director Change: Something something governance. Investors don’t care until someone gets indicted
- Cloud Play: 30% growth in license + cloud signings from FY22 to FY24
TL;DR: Safe. Boring. Profitable. Like your dad’s favourite bank.
7. Balance Sheet
| Metric | FY25 |
|---|---|
| Equity Capital | ₹43 Cr |
| Reserves | ₹8,319 Cr |
| Borrowings | ₹46 Cr (read: pocket change) |
| Total Assets | ₹10,067 Cr |
Key Takeaway:
Debt is so low, it should be classified as a rounding error. Balance sheet cleaner than a politician’s white kurta before elections.
8. Cash Flow – Sab Number Game Hai
| Year | CFO | CFI | CFF | Net Cash Flow |
|---|---|---|---|---|
| FY23 | ₹1,758 Cr | ₹267 Cr | ₹(1,665) Cr | ₹360 Cr |
| FY24 | ₹1,791 Cr | ₹1,611 Cr | ₹(1,958) Cr | ₹1,443 Cr |
| FY25 | ₹2,199 Cr | ₹(2,372) Cr | ₹(2,096) Cr | ₹(2,269) Cr |
Interpretation:
Operations are printing money. But investments and shareholder returns are taking it away. Classic “I made money but don’t know where it went” vibes.
9. Ratios – Sexy or Stressy?
| Ratio | Value |
|---|---|
| ROE | 29.3% |
| ROCE | 40.6% |
| P/E | 31.7x |
| PAT Margin | 34.6% |
| D/E | 0.01x |
These ratios are hotter than a startup founder on Shark Tank with no equity left.
10. P&L Breakdown – Show Me the Money
| Year | Revenue | EBITDA | PAT |
|---|---|---|---|
| FY23 | ₹5,698 Cr | ₹2,471 Cr | ₹1,806 Cr |
| FY24 | ₹6,373 Cr | ₹2,783 Cr | ₹2,219 Cr |
| FY25 | ₹6,958 Cr | ₹3,076 Cr | ₹2,405 Cr |
Commentary:
YoY PAT grew 8.4%, which is okay if you’re an FD. Not so okay when you’re priced like a startup unicorn.
11. Peer Comparison
| Company | P/E | ROE | OPM | PAT (TTM) | Rev (TTM) |
|---|---|---|---|---|---|
| OFSS | 31.7x | 29.3% | 44% | ₹2,405 Cr | ₹6,958 Cr |
| C.E. Info Systems | 77x | 17.6% | 38% | ₹127 Cr | ₹463 Cr |
| Tanla | 18x | 24.1% | 17% | ₹507 Cr | ₹4,027 Cr |
| Nucleus Software | 22x | 16.8% | 20% | ₹133 Cr | ₹832 Cr |
Verdict:
OFSS is the least drunk guest at the fintech wedding—expensive, but still standing upright.
12. Miscellaneous – Shareholding, Promoters
| Shareholder | % (Q1 FY26) |
|---|---|
| Promoters | 72.56% |
| FIIs | 8.55% |
| DIIs | 8.50% |
| Public | 10.39% |
Fun Fact:
Promoters haven’t sold, FIIs are bouncing in and out, and the public… well, mostly just reading about it in blogs like this.
Also, no buzz around acquisitions, no demergers, and absolutely zero noise—which is either comforting or boring, depending on how much masala you need.
13. EduInvesting Verdict™
Oracle Financial Services is the “Baap ka Business” of financial software. No flashy headlines, no IPO tantrums, just stable, margin-rich returns and dividend checks fatter than your IPO refund.
Final Word?
A dividend ATM wrapped inside a banking software shell. A decent pit stop. But don’t expect business class legroom.
Metadata:
Written by EduInvesting Team | 23 July 2025
Tags: Oracle Financial Services Software Ltd, OFSS, Banking IT, EduInvesting Premium, Dividend Stocks, FLEXCUBE
