🧠 At a glance:

Virtual Galaxy Infotech Ltd (NSE: VGINFOTECH), a humble SaaS IT firm from Nagpur, just pulled a Dhoni – stayed low and finished strong. After years of single-digit crores in profit, FY25 saw a breakout: ₹17 crore net profit and 49% OPM on just ₹64 crore revenue. The ROE? A nosebleed 53%. And yes, they’ve been around since 1997.

🧷 Title Tag & SEO Focus:

Virtual Galaxy Infotech FY25 Results: SaaS Profit Explosion with 49% OPM & 53% ROE

🏢 About the Company

• Incorporated: 1997
• Headquarters: Nagpur, Maharashtra
• Listing: NSE SME Platform
• CMP: ₹175 | Market Cap: ₹436 Cr

This isn’t your typical tech-IPO startup bubble. Virtual Galaxy is a 26-year-old bootstrapped SaaS firm that has quietly built deep roots in core banking software, e-Governance ERP, and customized BFSI + GovTech platforms. Clientele? A mix of:

• Public sector banks
• Cooperative credit societies
• Government departments
• SMEs in industrial ERP

👥 Key Managerial Personnel (KMP)

• Promoters: Still hold 64.72% (though it’s dropped 23% last quarter — red flag alert)
• Auditors (New): M/s RKAS & Co. appointed till FY30
• Employee Strength: 300+

📊 FY25 Financial Snapshot (₹ Cr)

🚀 EPS jumped from ₹0.65 to ₹15.04 in one year.

🏦 Balance Sheet Check (₹ Cr)

🧾 Working capital days improved sharply: From 49 to 27.
💰 Net cash flow: Neutral, indicating capital reinvestment.

🧮 Forward-Looking Fair Value (FV) Estimate

Assumptions:

• Forward EPS range: ₹14–₹18
• Fair P/E range for high-margin IT SME: 20x–30x

➡️ FV range = ₹280 – ₹540

At CMP ₹175, this gives upside potential of 60% to 200%, assuming earnings sustainability (and no more promoter dilution 🤨).

📈 Growth Outlook

🔍 What’s driving the profitability spike?

• Shift towards high-margin SaaS + licensing vs custom projects
• Reduced manpower cost-to-revenue ratio
• Improved collections + receivables (146 debtor days still bad, but payable days are 326! Net negative CCC = cash-efficient)

🧪 Growth Vectors Ahead:

• PSU & govt digital stack demand (₹20,000 Cr+ potential under Digital India 2.0)
• SaaS banking tools for cooperative banks + NBFCs
• Exports: Not present yet, but likely expansion vertical
• ERP demand from MSMEs post-GST reforms

🧠 EduInvesting Take

🎯 Nagpur just dropped a SaaS bomb.

Virtual Galaxy went from niche govtech vendor to profit-churning IT powerhouse in one fiscal year. The OPM of 49% screams SaaS profitability, and the 53% ROE makes you wonder — is this the real multibagger no one’s watching?

🚩 Yes, the promoter stake fell 23% last quarter — a massive dilution warning. That’s the elephant in the server room. But if they use that equity wisely for expansion (and not salary hikes or SUVs), this might just become the MapmyIndia of GovTech.

🤫 And the best part? No one’s tracking this yet. Not even mutual funds. They probably think Nagpur only makes oranges.

🚨 Risks & Red Flags

• 📉 Promoter dilution (-23% in just one quarter)
• 💳 High receivable cycle – debtor days at 146 is alarming
• 📈 Valuation catching up fast – P/E 26 at SME stage may price in FY26 growth
• 🏢 Customer concentration – PSU and govt clients = slow payments + red tape

📌 TL;DR

• Virtual Galaxy Infotech posted breakout FY25 results with 49% EBITDA margin and ₹17 Cr PAT.
• ROE at 53%, driven by SaaS product profitability.
• High working capital efficiency despite debtor issues.
• Valuation range: ₹280–₹540, upside possible if growth sustains.
• But yes, keep an eye on the promoter shareholding and cash flow quality.

Tags:

Virtual Galaxy Infotech FY25 Results, SME IT Stocks India, SaaS Stocks NSE, High ROE Indian Tech, EduInvesting, VGINFOTECH, Nagpur Tech Company, Multibagger IT Stocks, FY25 Profit Jump, Virtual Galaxy SaaS

Author: Prashant Marathe
Date: June 12, 2025